From the essence of sustainability to the entrepreneurial spirit, these terms have been the talk of the town. But here comes an amalgamation of the two: Sustainable Entrepreneurship.

Official Definition

At present, there is still no clear definition of sustainable entrepreneurship. However, many of those that have been put out see a blend between the definitions of the two terms: “sustainability” and “entrepreneurship”. It generally involves creating and managing innovative models and practices that prioritise environmental and social responsibility while generating profits.

While traditional reporting frameworks for businesses only included financial performance, the popularisation of the concept of “sustainable development” by the 1983 UN Commission on Environment and Development Brundtland Report has now extended these frameworks to also take into account social and environmental performance.

As a result, many scholars have started to pay attention to a business concept known as the triple bottom line, defining sustainable entrepreneurs as ones that prioritise it.

Measuring Sustainability: Triple bottom line

The triple bottom line posits that firms should not only prioritise their profit generation but also measure their social and environmental impact. It can be broken down into 3 “P’s”: Profit, People and the Planet, to distinctly measure the sustainability efforts of sustainable entrepreneurs and businesses (Figure 1).

Figure 1: Triple Bottom Line

Profit: Often interpreted to simply mean the internal profit made by the company itself, “Profit” – in this case – is intended to encompass the overall positive or negative impacts the company has on the local, national and global economies. Take, for instance, a company that maintains unsafe working conditions results in a negative economic impact. Conversely, a company that provides valuable employment opportunities to the local community positively influences the economy.

People: Traditionally, businesses have strived to generate value for shareholders, or those who own shares in the company. But as firms have increasingly embraced sustainability, the “People” aspect has grown to encompass all possible stakeholders including employees, shareholders, customers, affected communities, individuals along the supply chain and even future generations impacted by the company’s actions.

Planet: The “Planet” component of the triple bottom line focuses on creating a positive impact on the planet through sustainable environmental practices and policies. Such efforts often see companies commit to net-zero emissions, embrace regenerative impact or adopt any actions that reduce their carbon footprint.

Conclusion

In a world that often emphasises profit over purpose, embracing a triple bottom line approach may seem idealistic. However, it is important to recognise that this approach does not inherently devalue financial profitability in favour of societal and environmental impact. Just as a sturdy foundation relies on multiple pillars, each component – profit, people and planet – is equally important and necessary for sustainable entrepreneurship.