The Triple Bottom Line: Why Sustainability is Transforming the Best-Run Companies and How It Can Work for You

The Triple Bottom Line: Why Sustainability is Transforming the Best-Run Companies and How It Can Work for You

by Andrew Savitz

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Your company's sweet spot is where its financial interests coincide with social and environmental interests.

It is called sustainability, and Fortune 100 companies like DuPont, PepsiCo, and Toyota are beginning to see it as the most transformative business concept in years. Responding to growing pressure from regulators, environmentalists, and socially concerned


Your company's sweet spot is where its financial interests coincide with social and environmental interests.

It is called sustainability, and Fortune 100 companies like DuPont, PepsiCo, and Toyota are beginning to see it as the most transformative business concept in years. Responding to growing pressure from regulators, environmentalists, and socially concerned shareholders, these and other firms are charting solutions that will reap environmental and social rewards along with financial ones. Companies that defy the principles of sustainability find themselves suffering significant setbacks to their business objectives.

The Triple Bottom Line is the groundbreaking book that charts the rise of sustainability within the business world and shows how and why financial success increasingly goes hand in hand with social and environmental achievement. Andrew Savitz chronicles both the real problems that companies face and the innovative solutions that can come from sustainability. His is a hard-line approach to bottom-line fundamentals that is re-making companies around the globe.

Savitz identifies and explains this new management concept in plain language and with good humor, showing leaders in organizations of all sizes and industries exactly how they can benefit. He provides memorable stories and simple rules of the road to help you find your company's sweet spot. In the end, he shows that sustainability is a fundamental approach to management that lets businesses protect and grow the resources they need to succeed.

Editorial Reviews

From the Publisher
Andrew Savitz recalls a conversation he had with a purchasing manager at a large telecommunications company. The man was adamant that social responsibility had nothing to do with his job, which was to buy products at the lowest price.

"Would you buy from a foreign supplier that you knew was employing 10-year-old girls and paying them 60 cents a day for their labour?" Savitz asked.

"Of course I wouldn't do that," came the reply.

"Not even if the supplier offered the lowest price, if child labour was legal in that country and if no one could possibly find out?"

"No," the manager replied. "It would not be right."

"Do you think your company would support your decision to sacrifice profit in this case?" Savitz persisted.

"Absolutely, I'm certain of it," the manager said.

Do not be deterred by the unfortunate title of this forthcoming book. In just 250 pages, rich in anecdotes, Savitz makes a lively and cogent case that no company or manager can afford any longer to ignore the world around them. Many of the reasons companies face "the age of accountability" are familiar, but it is useful to see them pulled together: our shared sense of vulnerability, fostered by climate change and natural disasters, coupled with the awesome power that global corporations have accumulated; the goldfish bowl in which companies operate; their increased exposure through networks of business partners and global supply chains; the campaigns mounted by lawyers, non-governmental organisations and shareholder activists.

But this book is not a tract admonishing business to take its responsibilities seriously. Its central argument is an upbeat one that is gaining currency: it makes financial sense for companies to anticipate and respond to society's emerging demands. In the long run, says Savitz, the sustainable company is likely to be highly profitable.

There is a flipside: companies that fail to respond, or thumb their noses at society, are likely to pay the price.

What is a sustainable company?

Savitz and Karl Weber, his co-author, spend time on their definitions-a sensible move given the confusion and spin that often surround this debate. Sustainability is not about philanthropy, which has nothing to do with the company's main purpose. Nor is it merely about ethics. The authors even prefer "sustainability" to "responsibility", arguing that the latter emphasises benefits to society rather than benefits to the company.

For Savitz, who created the environmental practice at PwC and has worked with some of America's biggest companies, it is about conducting business in a way that benefits employees, customers, business partners, communities and shareholders at the same time. It is "the art of doing business in an interdependent world". The best-run companies find "sustainability sweet spots"-areas where shareholders' long-term interests overlap with those of society. Implausible? Look at General Electric, with its revenue-boosting Ecomagination green technology, says Savitz. Or Toyota's fuel-efficient Prius. Or Unilever's Project Shakti in India, training 13,000 women to distribute its products to rural customers and thereby greatly increasing families' income while expanding its market penetration. Every company can find a sweet spot, he suggests, even if it is the minimal one of cutting costs by reducing energy use, employee accidents or the chances of a lawsuit-though some of this could just as well be called smart risk management.

In the second half of the book, he explains how to translate all this into "business as usual": how to decide what it means for the company; how to work with stakeholders, not against them; how to set enforceable goals in difficult areas such as child labour. Throughout, the arguments are driven by pragmatism, not dewy-eyed altruism. The narrative occasionally suffers from its American slant. The English Quakers, after all, pioneered decent working and community practices long before Henry Ford.

Even if you do not agree with it all, this is a thoughtful guide for managers who still harbour doubts about the point of sustainability, who are taking tentative steps towards it or who are seeking a clearer path through the maze. With luck, it should also help the anoraks in the sustainability industry to distinguish the wood from the trees.

-Financial Times, July 5, 2006

"…excellent new book… a compelling case for change." (The Marketer, January 2007)

"Important issues, well presented, that deserve a wide audience" (Long Range Planning, July 2007)

Soundview Executive Book Summaries

In a survey of 900 global corporations from PricewaterhouseCoopers in 2003, 80 percent of CEOs said they believe “sustainability” is or soon will be vital to the profitability of their company, and 71 percent said they would consider sacrificing short-term profits to move their company towards sustainability. The Triple Bottom Line takes a look at how businesses can prosper financially while protecting and renewing the social, environmental and economic resources they need - and how they can fail if they do not tend to those resources.

The Sustainability Imperative and Accountability
Practices that promote certain aspects of sustainability have been around for a long time. Some great companies have always tried to behave responsibly in terms of their resources and impacts. But the areas that make up today's sustainability movements—the environment, community relations, labor practices, social responsibility, and others—were historically seen in isolation from one another. There are scattered, disconnected anecdotes that describe pioneering efforts throughout history, but nothing worth holding up to today's standard.

And this is a standard that must be met. The spread of freedom, the growth of a worldwide economy and business interdependence are all being driven by an astounding explosion of global communications advances. It is a socially conscious world as well. Today's 25-year-olds grew up watching the televised reports about Chernobyl, Exxon Valdez and other disasters.

Accountability Backlash
Ignore the cynics. Sustainability is not just “corporate hype.” And despite the popular misconceptions, business leaders and managers do not have a legal obligation to maximize profits above all other concerns. Absent criminal conduct, fraud or negligence, if the shareholders are dissatisfied with the company's orientation toward profits, they can exercise their rights to change the board, oust management or sell their stock, but they can't sue. There is nothing illegal about managers' pursuing goals beyond profit.

Your Sustainability Strategy
To develop a sustainability program, you should examine your overall corporate strategy to identify the sweet spot where strategy and sustainability meet. For example, consider a company targeting personal care products as a growth opportunity. Because of the health benefits of soap, shampoo and toothpaste, the sweet spot is obvious.

Finally, a sustainability strategy can protect a company from unseen risk. When low rainfall in Kerala, India, caused a water shortage in 2002, political activists staged protests against both Coca-Cola and Pepsi plants in the city. These protests didn't stop, even after a Pepsi hydrogeologists proved their water draws were coming from another location. And media firms like Disney, Time Warner, Viacom and GE are currently being targeted in a campaign launch by the University of California-San Francisco Center for Tobacco Control Research and Education, endorsed by the World Health Organization. Stories like these can be told about many companies. A systematic approach to sustainability and shareholder engagement will enable forward-looking companies and managers to see beyond the horizon and recognize new forms of risks before they strike.

Launching Your Program There's no single correct starting point to launch a sustainability program, but starting with a strategy is an excellent approach. The first step is often by a division, department or plant led by a manager who sees a compelling business need and understands the potential value of sustainability earlier than others and middle managers can also play their part in the early stages.

Start by doing some of the following:

  • Look at your customers' needs
  • Work with your supply chain
  • Leverage your current position
  • Start with your current skill set
  • Anticipate an impending change
  • Empower individuals

Managing Stakeholder Engagement
Taking a fresh look at yourself and your company is one of the many concrete benefits you can derive from stakeholder engagement—provided that you enjoy real rather than sham engagement. It's not about pretending to listen to your stakeholders.

Many advocacy groups feel they are saving the world and their favored issue is of paramount importance to that salvation. When confronting these stakeholders, you should present your side of the issues frankly and nondefensively.

Stakeholder mapping allows you to identify true stakeholders, what it is that they care about and how you prioritize them.

Creating a culture of Sustainability
Becoming a sustainable enterprise isn't just a matter of placing an overlay on top of your conventional business thinking. It entails making a shift from an old way of thinking to a new one - a new mind-set that subtly or dramatically alters everything you see and do. Copyright © 2006 Soundview Executive Book Summaries

—Soundveiw Review

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What People are saying about this

From the Publisher
“Required Reading” -Fortune Magazine

“Savitz makes a lively and cogent case that no company or manager can afford any longer to ignore the world around them.”- Financial Times

“Perhaps the best, most comprehensive book to date on corporate sustainability”-Social Funds

"Whether you are a corporate manager, investor, consumer, or  public official, this book will change your view of how corporations can succeed for themselves and for society. Savitz combines vision and practical advice in an elegant presentation."
George Stephanopoulos, chief Washington correspondent, ABC News; anchor, This Week with George Stephanopoulos

"Informative, persuasive, and practical, containing valuable advice for anyone seeking a more responsible and profitable approach to business."
Steve Reinemund, chairman and chief executive officer,

"The main challenge of sustainability is how to take it from concept to action. Andy Savitz communicates in plain language what sustainability is and how everyone in the organization can help achieve it."
Charles O. Holliday, Jr., chairman and chief executive officer, DuPont

"An engaging mix of powerful ideas and practical advice. Values matter and Savitz shows how profitability and responsibility can and must go hand in hand."
Michael Morris, chairman, president, and chief executive officer, American Electric Power

"At long last a plain English, action-oriented guide to business sustainability illustrated with practical examples from world-class companies."
Richard Cavanagh, president, The Conference Board, Inc.

"Andy Savitz gets it. He also happens to be witty, sensible, and a good writer as well as a good business strategist—sort of a modern Ben Franklin. That makes this book a joy to read as well as indispensable for businessmen who wish to succeed in this new age."
Walter Isaacson, president and chief executive officer, Aspen Institute; former chairman and author, Benjamin Franklin: An American Life

"A bold and readable foray into this complex subject. Readers will come away enlightened."
Kert Davies, research director, Greenpeace US

"Some circumstantial evidence is very strong,' Savitz and Weber recall Thoreau saying, 'as when you find a trout in the milk.' The flood tide of corporations they profile provides powerful evidence that the triple bottom line is going mainstream."
John Elkington, founder and chief entrepreneur, SustainAbility

"A timely contribution to why big corporations engage in sustainable development and how managers can implement it in their companies."
Bjorn Stigson, president, World Business Council for Sustainable Development

"Must-reading for any corporate manager or investor seeking the ‘sweet spot’ where financial and stakeholder interests meet. It provides powerful arguments, cogent analysis, great stories, and dozens of real-world insights into how companies are enhancing profits through sustainability strategies."
Mindy Lubber, executive director, CERES; former regional administrator, United States Environmental Protection Agency

"Savitz and Weber’s The Triple Bottom Line offers a perspective that is already influencing the wisest and most socially responsive corporations in the world.  This well-written, insightful, and practical book will guide executives for decades to come."
Max Bazerman, Jesse Isador Straus Professor of Business Administration, Harvard Business School

"Amidst the proliferating number of books on corporate sustainability topics, Savitz's The Triple Bottom Line is a refreshing relief. Its accessible style, jargon-free language, and thematic organization avoids the tendency toward cheerleading and case study overdose characteristic of the field.  Savitz speaks with clarity, authority, and good humor."
Allen White, senior fellow, Tellus Institute; cofounder, Global Reporting Initiative

"The Triple Bottom Line is full of practical advice based on Savitz's hands- on experience working with corporate managers.  This book is a very readable guide for those who want to build a successful and sustainable business for the twenty-first century."
Arnold S. Hiatt, former chairman and CEO, the Stride Rite Corporation 

"Most executives have a superficial or misguided understanding of sustainability. The Triple Bottom Line should be required reading for business leaders who seek to enrich their shareholders, society, and themselves."
Scott Cohen, editor and publisher, Compliance Week

"Responsible leadership ensures that what we have today will be around for future generations. This book shows us both what it takes to lead responsibly and what happens when people fail to do so. An insightful book for those who seek how they can personally make a difference."
Samuel DiPiazza, global chief executive officer, PricewaterhouseCoopers LLP

"Andy Savitz puts sustainability in a clear, practical framework supported with real business examples."
Travis Engen, former president and chief executive officer, Alcan, Inc.; chair, Prince of Wales’ International Business Leaders Forum; chairman, World Business Council for Sustainable Development

“Lots of books instruct executives on the latest secrets to management success. But this one offers hands-on tips for how managers can turn corporate social responsibility into profit. Savitz. . .seeds practical advice amid compelling real-life corporate stories.” -Global Proxy Watch

Meet the Author

Andrew W. Savitz knows about sustainability from working as one of the lead partners in the Sustainability Business Services practice at PricewaterhouseCoopers, where he helped firms both large and small increase their profitability and responsiveness to environmental and social issues. Before that, he was a senior environmental enforcement official for the Commonwealth of Massachusetts. Savitz now runs Sustainable Business Strategies, an independent advisory firm based in Boston.

Karl Weber is an author specializing in business, social, and political topics. He coauthored the business best-seller The Power of We with Jonathan Tisch, CEO of Loews Hotels, as well as How to Grow When Markets Don't with acclaimed management consultant Adrian Slywotzky.

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