...Triple Bottom Line Andrea Ciuffoli Brandman University Financial Reporting and Analysis ACCU 602 Charmaine Felder, Ph.D, CPA June 5, 2015 Triple Bottom Line Introduction On October 22nd 2013, Apple unveiled thinner iPads and faster Mac computers ahead of a competitive holiday shopping season (Gupta & Chan, 2013). The invitation to this unveiling event sent to major members of the press was teasing: "We still have a lot to cover." While millions of people were tuned in to watch Apple’s press release in order to learn about the additional features of the new products that Santa could deliver this holiday season, exactly at the same time, about one million of young people were working under awful conditions such as long hours, low wages and abusive and military-style management, in order to assemble with the highest productivity rate these exciting new devices. This is happening every day at the Foxconn plant in China. Foxconn, a Taiwanese company founded in 1974, in the past decade has gone from being one of many invisible firms in the electronics supply chain to the world champion of flexible manufacturing. Foxconn, the trading name of Hon Hai Precision Industry, is the world’s largest electronics contract manufacturer with ‘annual revenue of $131.6 billion in 2013’ ("Foxconn Hon Hai Income Statement," 2015). It is most widely known as Apple’s largest supplier. Figure 1. Foxconn Hon Hai Precision Industry Co. Income Statement Although the company had an...
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...Executive Summary This report provides an analysis and evaluation of Triple Bottom Line (TBL) accounting. Many corporations adopt and follow the novel term, along with the public increasing public concern of social and environmental performances. The research pays attention to the arguments for and against the TBL accounting in corporate accounting reporting. Many companies concur with the significance of concept to reinforce their business, yet others hold the view that TBL is accompanied by diverse debates. The findings of this review show that TBL accounting: • Refers to a good tool of the measurement of accountability and transparency • Provides a beneficial opportunity to obtain the value of a corporate name and the market share in completion • Contributes to the reduction of production cost and the conservation of environment through making use of resources efficiently • Improves corporate management and employee productivity due to the measurement of accountability and transparency • Impacts on a core competency of business and a social situation • Adjusts a methodology to measure social and environmental performances TBL accounting with economic, social, environmental activities has been some negative thus far. However, the arguments against TBL accounting, which are related to core competency, poor societies and measure standard, are still doubtful and cannot address a strong persuasive in opposition to...
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...In Press, Business Ethics Quarterly Getting to the Bottom of “Triple Bottom Line”* by Wayne Norman and Chris MacDonald March 2003 Abstract: In this paper, we examine critically the notion of “Triple Bottom Line” accounting. We begin by asking just what it is that supporters of the Triple Bottom line idea advocate, and attempt to distil specific, assessable claims from the vague, diverse, and sometimes contradictory uses of the Triple Bottom Line rhetoric. We then use these claims as a basis upon which to argue (a) that what is sound about the idea of a Triple Bottom Line is not novel, and (b) that what is novel about the idea is not sound. We argue on both conceptual and practical grounds that the Triple Bottom Line is an unhelpful addition to current discussions of corporate social responsibility. Finally, we argue that the Triple Bottom Line paradigm cannot be rescued simply by attenuating its claims: the rhetoric is badly misleading, and may in fact provide a smokescreen behind which firms can avoid truly effective social and environmental reporting and performance. Introduction The notion of “Triple Bottom Line” (3BL) accounting has become increasingly fashionable in management, consulting, investing, and NGO circles over the last few years. The idea behind the 3BL paradigm is that a corporation’s ultimate success or health can and should be measured not just by the traditional financial bottom line, but also by its social/ethical and environmental performance...
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...The Triple Bottom Line: How Today’s Best-Run Companies Are Achieving Economic, Social, and Environmental Success— and How You Can Too I chose this book because the title drew my attention since the beginning. When I read the title I understood that in this book the Author’s were going to talk about how big corporations deal with sustainability. That for me was really important, as sustainability is such a hard concept to grasp. I believe that the best way to understand about sustainability is with examples and cases that happen in real life. On this book Andrew Savitz and Karl Weber, put all their vast experience and knowledge in sustainable practices and recollect big cases of the corporate world and study them. Some events are about mistakes the corporations did when they failed to understand the Triple bottom Line in their business decisions. Others are great examples of how companies found the “sustainability sweet spot” (a concept of them) and were able to achieve success not only economical, but also social and environmental. The purpose of the authors is to inform and educate the reader about how a company needs to balances social economical and environmental growth on todays world. The books starts with an important introduction, explaining what it is sustainability or at least they try as like I said before is such a hard concept to calculate. Where I believe they nail their explanation is when they start telling us what a sustainable company is and what...
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...Analysis on triple bottom line and systems theory Corporate social responsibility is one of great debate for many years. Nobel prize-winning economist Milton Friedman believes the corporate responsibility a business has is to its shareholders making a profit, while Michael E. Porter and Mark R. Kramer believes businesses and society are interwoven (Newton, 2012). The purpose of this analysis is to analyze the ways in which systems theory and triple bottom line theory support or negate each other. First, the analysis will analyze CSR. Second, it will analyze how systems theory and triple bottom line theory support each other. Third, the analysis will analyze how systems theory and triple bottom line theory negate each other. Some companies believe corporate social responsibility builds good reputation and customer loyalty. Years ago corporate social responsibility was just about making a profit and providing employment. Today corporate social responsibility is more than just the bottom line. It is being involved in the community and being a benefit to society. Corporate social responsibility is the obligations of a business to society. Two types of corporate social responsibility theories are triple bottom line and systems theory. According to Savitz and Weber (2006), triple bottom line captures sustainability by measuring the impact of an organization’s activities on the world; this includes social, environmental, and financial performance (people, profit, and planet)...
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...Triple Bottom line. Corporate sustainability involves meeting the needs of today’s stakeholders in a manner that protects the environment and resources needed for future generation. It is directed at improving a company’s triple bottom line, which covers its performance on economic environment and social metrics. Economic. Barclays demonstrated significant success in delivering much better financial results between 2002 to 2005. They improved the cost-to-income ratio by right sizing the business in terms of head-count, and stream-lined process and systems to extract economies of scale, including taking back-offices out of the branches and centralizing them. By 2005 they were operating on capital of about 250 Million pounds and delivering about 125 million profits per annum. Although the case study talks about the improvements delivered by the team between 2002 and 2005 it makes no mention of what caused the drop in financial performance between 2001 and 2002, which can be seen on exhibit 8 i.e. a drop in PBT from 116 million pounds to 83 million pounds; A drop of 28.4%. This all came from the income side of the Profit and loss summary but is not explained in the case at all. From 2002 to 2004, per exhibit 8, income grew 19% from 235 million pounds to 301 million pounds while costs were held at an 11% increase from 152 million pounds to 169 million pounds. This led to the 27.7% increase at the PBT level. Note the PBT of 106 million pounds in 2004 is still below that of...
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...Ethical Bottom Line Introduction The Ethical Bottom Line Theory is developed on the bases of the case study and CSR theories and the traditional concept of accounting system. In traditional business accounting and common usage, the "bottom line” refers to either the “profit” or “loss”, which is usually recorded at the very bottom line on a statement of revenue and expenses. The Triple Bottom Line was coined by Elkington (1994) to introduce the full cost accounting method. For example if a corporation shows a profit but their production pollutes the river, and the government ends up spending taxpayers’ money for rehabilitation programs. So the Triple Bottom Line was coined to address the issue. The triple bottom line incorporates the notion of sustainability into business decisions. The TBL is an accounting framework with three dimensions: social, environmental (or ecological) and financial. The TBL dimensions are also commonly called the three Ps: people, planet and profit and are referred to as the "three pillars of sustainability". Interest in triple bottom line accounting has been growing in both for-profit, nonprofit and government sectors. Many organizations have adopted the TBL framework to evaluate their performance in a broader context (Elkington, 1994) Ethical Bottom Line theory condenses the Triple Bottom Line of Elkington (1994) framework and integrates the Stakeholder Theory. Brief Description of the Theory The theory condenses the Triple Bottom...
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...t Malaysian-based Company (Maybank) Introduction / Objective of the term paper Company Background Maybank, a government-linked company (GLC). is the largest bank in Malaysia with more than 380 domestic and 90 international branches. In Maybank, the unionised Special Grade Clerks performs these functions: • receiving and paying of cash items within designated authority • signing of internal vouchers • checking and verifying all activities of tellers • dual control of ATM • control and release of checkbooks, PIN, bank drafts, bankers cheques etc. If one analyses the job function / authority and responsibility of the unionised Special Grade Clerk, one would note that a lot of the functions of some Unionised employees in some banks are much superior to the said officers. Non-clerical - Position hold above trainee officer, bank officers (in-charge banking hall) and etc. It was reported of estimated 4,605 or 61% of Maybank employees in the clerical and non-clerical category were NUBE members and some of them decided to form an in-house union called Maybank Non-Executive Union (Mayneu). Organizational Behavior issues identified ✓ Biasness in Performance Bonus Maybank and the National Union of Bank Employees (NUBE) had been in dispute over the alleged lack of or insufficient performance bonuses provided to lower-level employees. The dispute had been ongoing since 2009. NUBE claims that the bank did not provide a fair...
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...triple bottom line (TBL) accounting expands the criteria for measuring organizational success beyond profits and losses. Triple – bottom-line reporting firstly began in 1994 by John Elkington, the founder of a British This accounting method assesses and analyzes the financial, social and environmental effects of an organization's operations. consultancy called SustainAbility. The triple bottom line consists of three Ps: profit, people and planet. It aims to measure the financial, social and environmental performance of the corporation over a period of time. A company that produces a Triple Bottom Line Report is accounting for the full costs involved in running a business. Triple bottom line reporting demands that a company be accountable for every aspect of business.The idea enjoyed some success in the turn-of-the-century zeitgeist of corporate social responsibility, climate change and fair trade Growing awareness of corporate malpractice in these areas forced several companies, including Nike and Tesco, to re-examine their sourcing policies and to keep a closer eye on the ethical standards of their suppliers in places as far apart as Mexico and Bangladesh, where labour markets are unregulated and manufacturers are able to ride roughshod over social and environmental standards. It also encouraged the growth of the Fairtrade movement, which adds its brand to products that have been produced and traded in an environmentally and socially “fair” way (of course, that concept is...
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...Introduction Nowadays the society and stakeholders specially are demanding more results from the companies, not only related with financial aspects, but social and environmental aspects, as well. These requirements make a change about the way strategic management is being done, in order to include the triple bottom line. The triple bottom line is an accounting framework that incorporates three dimensions of performance: social, environmental and financial. These dimensions are called the three P´s: People, Planet and Profits. What is the challenge? In the past, each company had to show good financial results in order to be considered successful, no matter if that company used to not take care about the environment or, if it was affecting the society. According with the new world requirements, every single company has to have good results in the triple bottom line: financial, social and environmental. It is no longer permitted for a company having only good financial results; it has to show good results related with the social and environmental aspects, as well. Each company in the world must reveal what their commitments, effort and results related with the financial aspect (affect mainly to the shareholders), social and environmental (affect mainly to the stakeholders) are. The financial aspect is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from...
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...com/watch?v=SyvdKsZSc70&feature=youtu.be After reviewing the presentation by Melissa regarding Hasbro being named among the top ethical companies for the second year based on the WME survey, I found her presentation to be very informative. The article discussed is very appropriate for the topic at hand, ethics successes or failures, and addresses an industry and company that has received much scrutiny in the past few years for unethical practices such as child labor, excessive environmental waste, lead paint in toys, etc. By selecting an article that discussed a survey/competition among a broad variety of companies from over 100 countries companies, Melissa has shown that ethics are an important part of a business’s bottom line, as mentioned with the triple bottom line concept. In explaining the material found in the article, I felt that everything was extremely thorough, and after reading the article myself, I didn’t think that anything was left out or skipped that related to the content at hand. In fact, Melissa did a great job of going into detail with how the survey was conducted; 100 companies were reviewed on the basis of their codes of conduct, litigation and regulatory infraction practices, investment in innovation, corporate citizenship, and the nomination from peers, consumers, and activists. These facts were not immediately available in the article, but she deemed them important enough to discuss which showed her commitment to going above and beyond to give the viewer...
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...Example Reflective Journal |Date |Activity |Reflection | | |Unit 1: Introduction |This is the first time that I really have the opportunity to talk about and discover more about what is really sustainability. I have often | | | |heard this word and have probably already used it without really fully understanding the concept. | | | |I am eager to learn more about the role that corporations could play in our future world and how we could possibly reverse the trends toward | | | |over-consumption and over-population. | | | |As a business student, I have often been told that corporations should aim before all at creating financial wealth for its shareholders. I would| | | |however want to believe that a corporation can contribute to the well-being of a wider range of stakeholders...
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...This level of reporting and verification speaks to the point the Coca-Cola is looking at sustainability in the short and long term. One area in which the company could improve from an Accountability perspective is depicting additional efforts for goals that have not been achieved. …Measures Within the report, Coca-Cola speaks to the following areas of sustainability: The Coca-Cola System, Water Stewardship, Energy Efficiency, Climate Protection, Sustainable Packaging, Corporate Giving Economic Opportunity, Workplace / Human Rights, A Great Place to Work, Sustainable Agriculture, and Health / Well-Being. Overall statements around these measures are that they seem to be fairly inclusive to the industry, as well as covering the triple bottom lines three dimensions of social, environmental and economic performance. One highlight to the companies’ measures is their brief depiction of the Coca-Cola System. Through this measure, the company eludes that they are considering the products entire lifecycle; from where they get their ingredients, to the products refrigeration, and finally the community improvement. Areas in which the company could improve from a Measures perspective are energy efficiency and climate protection. Currently...
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...Environmental Issues") After reading the assigned chapters in your e-text go to the publisher companion site to review key terms and to take the interactive quizzes for the assigned chapters. Sustainable Management Review Visit this website for additional information: www.epa.gov Access MindEdge and complete the following module. Compare your work to the feedback provided. Module 3: Overview of Sustainable Management If you want additional information to supplement your learning, please review the following resources: The Story of Stuff Project AUDI's website for its 2010 Green Police Super Bowl Commercial Chapter 1 of When Principles Pay: Corporate Social Responsibility and the Bottom Line by Geoffrey Heal Overview of Triple Bottom Line Access MindEdge and complete the following...
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...Center for Language and Mathematics February 27, 2014 Home Depot Foundation's Sustainability Obama stated that “It is not a choice between our environment and our economy; it is a choice between prosperity and decline” (“Sustainable Development Strategies”, 2009). Sustainability means the balance of three things which are steady business, society and friendly environment. In other words, businesses must show crucial responsibility in terms of environmental impacts and social responsibilities. Consequently, businesses must utilize natural resources carefully, and the economic growth and employment rate of businesses must be increased (“Understanding Sustainability”, n.d.). Therefore, sustainability is an aim of businesses. The Triple Bottom Line or TBL is a significant tool advocating sustainability goals. The concept of TBL emphasizes three things, which are healthy communities (people), clean environment (planet) and stable profitability (profit) (“Slaper & Hall”, n.d.). In contrast with the past, many businesses, nonprofit organizations and government entities tend to follow this guideline. Home Depot is one of the best examples of companies which are following the TBL standard. Home Depot is the world biggest home improvement retailer (“Did You Know”, n.d.). The company was established by Bernie Marcus and Arthur Blank in 1978. The first two stores opened on June 22, 1979, in Atlanta, Georgia. Today, Home Depot has approximately 2,200 branches around the United...
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