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July 13, 2006
Book Review--The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social, and Environmental Success--And How You Can Too
by Bill Baue
The book lays out a framework for companies to follow on the path toward integrating the triple
bottom line of economic, social, and environmental sustainability.
SocialFunds.com --
Andy Savitz, formerly of the Environmental and Sustainability Services group at
PricewaterhouseCoopers (PwC), has written
perhaps the best, most comprehensive book to date on corporate sustainability. Along with
co-author Karl Weber, he coins new terms and concepts to describe the evolving concept of corporate
sustainability, and provides a cornucopia of real examples to illustrate his points. More
importantly from a practical perspective (as the clunky subtitle suggests), he maps out how
corporations (from the CEO to the middle manager) can traverse the landscape toward the The Triple Bottom Line of
economic, social, and environmental sustainability.
 Too much commentary in the business world on
sustainability advances an emasculated version of the term, forgetting its roots in the Brundtland
Commission's 1987 definition of development that nourishes (not impoverishes) global social and
environmental health.
"[A] sustainable corporation is one that creates profit for its
shareholders while protecting the environment and improving the lives of those with whom it
interacts," writes Mr. Savitz. "It operates so that its business interests and the interests
of the environment and society intersect."
This definition raises a bit of a red flag by
not balancing social "improvement" with environmental "replenishment" (instead of "protection").
However, Mr. Savitz later reveals a deep understanding of the range of controversy surrounding the
definition of sustainability by discussing in depth leftwing cynics and rightwing skeptics of the
term. He admits many valid points of the cynics--such as progressive changes coming at the margins
instead of the core of businesses and sustainability initiatives motivated more by a desire to
avoid regulation than true commitment. He also reframes many of the skeptics objections, for
example quoting Adam Smith's social conscience from The Theory of the Moral Sentiments to
counterbalance his more famous claims of "enlightened" self-interest (the basis of free market
thinking) in The Wealth of Nations.
Mr. Savitz also importantly distinguishes
between sustainable and responsible corporate behavior, noting significant but not complete
overlap. He illustrates this distinction in developing one of the most important conceptual
coinages in the book, the sustainability "sweet spot"--namely, the locus where business interests
intersect with social and environmental interests. He displays this convergence graphically in a
four-celled matrix with two axes--one representing profitability, the other representing social and
environmental benefits--with the goal of moving into the northeast corner of maximizing financial,
social, and environmental returns.
"If it were possible for [an oil] company to shift its
business so as to eventually supply clean and renewable energy (such as wind or solar power) or
conservation services while maintaining or even increasing revenues, that would be a responsible
and profitable choice," Mr. Savitz writes. "BP has since [1998, when it
rebranded itself "Beyond Petroleum"] reduced greenhouse gas emissions from its own production
processes (saving an estimated $650 million thanks to improved efficiencies along the way) and has
invested heavily in alternative energy sources, including solar power."
"BP is not yet
sustainable by any means, but it is acting responsibly as it marches toward an ever larger sweet
spot," he adds.
This example also illustrates a much later set of concepts Mr. Savitz
introduces, minimization (or "being less bad") and optimization (or "being more good.")
"Optimization aims not just to reduce pollution, but to restore the environment; not just to
eliminate employee accidents, but to create a healthier, happier workforce; not just to decrease
harm to the community, but to revitalize it," Mr. Savitz writes.
Note the espousal of
replenishment over mere protection, suggesting a development beyond the initial definition of
sustainability. Indeed, by the end of the book, Mr. Savitz is citing Global Reporting Initiative
(GRI) co-founder Allen White's Corporation 2020 initiative to
reformulate the corporate structure. He also praises the move toward "dematerialization," whereby
companies substitute services for products (for example, VW re-envisioning itself as a
"global mobility group" to focus less on the production of cars and more on the transportation
services they provide.)
Counterbalancing these more theoretical leanings is an exceedingly
practical focus, with an appendix charting the entire course executives and managers need to
consider to move their companies toward sustainability. Suggestions include a "virtual
sustainability department" that integrates expertise and knowledge from across the entire company,
as well as strong encouragement to report sustainability policies and performance using GRI
guidelines.
Finally, the book is incredibly readable. The chapter entitled "Renewing the
Penobscot" is a page-turner. It chronicles the story of negotiations between PPL Corporation and
environmentalists, fishing enthusiasts, the Penobscot Nation, and government officials to address
problems with damming the Penobscot River in Maine. The story unfolds in a layered retelling,
revealing the drama behind what is called stakeholder engagement but really boils down to human
interactions. The episode vividly exemplifies how corporate sustainability plays itself out in
real life.
©
SRI World Group, Inc. All Rights Reserved.
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