What does the triple bottom line measure for a firm's success?

The triple bottom line is a framework used to evaluate a firm's commitment to sustainability and its overall success beyond just financial performance. It encompasses three key dimensions: people, planet, and profit.

Focusing on "people," the measure assesses how a company's operations impact social responsibility and relationships with stakeholders, including employees, customers, and the community. The "planet" aspect evaluates environmental stewardship, looking at a firm’s efforts to minimize its ecological footprint and contribute positively to the natural environment. Lastly, the "profit" dimension considers the traditional financial performance metrics but places them alongside the social and environmental impacts, emphasizing that long-term success involves balancing economic viability with social and environmental responsibility.

In summary, the concept of the triple bottom line reflects a holistic approach to measuring a company's overall performance, which includes not just financial outcomes but also its effects on society and the environment.