What is meant by "triple bottom line" in sustainability accounting?

The concept of "triple bottom line" refers to a framework that evaluates an organization's performance across three critical dimensions: social, environmental, and financial. This approach extends beyond traditional financial reporting by incorporating social equity and environmental responsibility into the evaluation of performance.

In sustainability accounting, the triple bottom line underscores the importance of balancing these three areas to achieve sustainable business practices. This holistic perspective encourages organizations to consider their impact not just on profits, but also on people (social implications) and the planet (environmental impacts). By adopting this framework, businesses can better understand their overall sustainability and make more informed decisions that align with broader societal goals.

This understanding is especially relevant in today's context, where stakeholders, including investors, customers, and regulators, demand greater transparency and accountability regarding the social and environmental consequences of business operations, alongside financial outcomes.