The Quadruple bottom line – what is it and why does it matter?
Profitability or the ‘bottom line’ used to be society’s principal expectation of companies, but not anymore. In 199, Elkington introduced the ‘triple bottom line’, which extended this focus to include a business’s impact on society and the environment pushing expectations beyond mere financial performance.
This development provided the inspiration for many reporting frameworks including Social Return on Investment, Environmental, Social and Governance factors (ESG) and the Trucost approach (assessing businesses based on risks relating to climate change, natural resource constraints, and broader environmental, social, and governance factors).
In 2022 expectations have expanded again with growing societal and investor expectations for companies to focus on the ‘quadruple bottom line’ or 4 P’s.
So what are the 4P’s?
- Purpose – an affirmation of an organisation’s reason for being in existence
- People – the impact individuals that work within the organisation have on the business including contractors
- Planet – the impact the organisation has on the planet now and in the future
- Profit – the drive to generate profits for the organisation’s owners
The 4P’s are unique in every organisation in terms of their priority but also in the way they each integrate into the culture of the organisation.
Why should they matter?
They future proof an organisation for the medium to long term and create a number of additional benefits.
Organisations that address the 4 P’s authentically:
- Grow sustainably;
- Retain employees;
- Boost stakeholder support;
- Retain/obtain a social license to operate;
- Generate value for all stakeholders; and
- Create exceptional value – they amplify resources rather than consume them.
How can the 4P’s become muscle memory for organisations?
They need to be:
- Rooted in an organisation’s ethos;
- Distinctive and aligned to the organisation’s brand;
- Meaningful to all stakeholders;
- Consistent with the organisation’s values; and
- Embraced continually and critical feedback welcomed so as to continually improve alignment to the 4 P’s.
In conclusion, the 4P’s are often a means of retaining a market leading position, supporting good stakeholder relations and embedding sustainable growth in an organisation. As such this is not an area to be overlooked as it will affect your organisation’s bottom line.
If you need assistance figuring out how to implement the 4P’s in your organisation or you want to verify that you’re adopting the right approach, get in touch with us today!