The Organizational Strategist

October 20, 2009

Triple Bottom Line Sustainability and Value Chain Analysis


Sustainability is a topic that has become more popular and compelling in recent years. However, there does not seem to be a single definition for the term. Many times sustainability is associated exclusively with environmental concerns, health, and standards. The green movement for environmental safety, climate control, preserving threatened or endangered species and so on is also often considered to be synonymous with sustainability. However, I will use the term sustainability as it relates to stakeholders and shareholders of whatever the product, service, or organization the term is being used to describe. Stakeholders and shareholders are included because sustainability relates to the triple bottom line. This triple bottom line is also known as the three P’s, which are People, Planet, and Profit. Other terms that are often used with triple bottom line sustainability are social, environmental, and economic. A truly sustainably acting organization would operate in such a way that it only creates value through its initiatives. The organization would not destroy value in any way for any of its inputs or outputs.

I grew up and am now back in the “Evergreen State” aka Washington State. Seattle is well known for being a “greener” area. Thus, looking out for ways of reducing, reusing, and recycling waste has become commonplace. Going for my graduate education broadened my understanding though. I was first introduced to organizational sustainability through the Business as an Agent of World Benefit and Organizational Behavior department in the Weatherhead School of Management at Case. There I learned how corporate social responsibility, taking proactive environmental measures and other helpful efforts where organizations, for profit and not for profit, can thrive through acting sustainably.

A helpful way to model where and how an organization’s influence, as well as what important factors there are to understand where sustainability concerns can arise, would be to map out a sustainability value chain. The value chain mapping shows the impact areas before, during and after the involvement of products and services from an organization. There are three segments to the value chain that relate to the organization: Upstream, Operations, and Downstream. Upstream refers to the activities and impacts that take place before the direct involvement of the organization. The Operations segment refers to the activities and impacts where and when the organization is taking direct involvement. Downstream refers to activities and impacts that take place after the direct involvement of the organization. Those segments address the economic, societal, and environmental impact areas.

As a hypothetical example, take a manufacturing company as the context. I put together a PowerPoint slide to identify the areas should be addressed in order for the manufacturing company to act in a sustainable manner.

Value Chain Example 

 With a more specific example, the economic, environmental, and societal activities and impacts become clearer. In order for a company to be more sustainable, it would need to partner with upstream and downstream organizations to make the entire value chain more sustainable.

In future posts, I plan to use the triple bottom line as a frame of reference to use and help explain how organizations, products, and/or services are or potentially are not sustainable.

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10 Comments »

  1. Excellent post. You should check out the “Sustainability Assessment Model” SIG at the Object Management Group.

    Comment by Probal — October 21, 2009 @ 3:23 am

    • Thanks Probal! I plan to look into the SAG SIG at the OMG as you suggested. :)

      Comment by Whit — October 24, 2009 @ 1:23 am

  2. Hi Whit, this is interesting, I like the way you have thought about, and depicted the sustainable value chain in your diagram. In case you and your readers are interested, I offer up two practical examples of sustainability in action that I was privileged to deliver. The first focusses on the supply chain and knowledge/best practice share.

    http://stopdoingdumbthingstocustomers.wordpress.com/2009/06/23/how-do-you-turn-good-into-excellent/

    The second is about employee and customer engagement to solve agreed societal concerns.

    http://www.davidzinger.com/employee-engagement-and-customer-service-stories-4083/

    I look forward to reading more from you on this subject.

    Comment by snoopdougydoug — October 22, 2009 @ 12:40 am

    • Hi snoopdougydoug, thanks for reading, commenting and sharing. You’ve got quite the interesting name. More will be coming as I have time so stay tuned.

      Comment by Whit — October 25, 2009 @ 4:01 pm

  3. Good information Whit. Here’s a current example of the need to look up and down the value chain. Greenpeace’s research of deforestation in the Brazilian Amazon led to tracing leather to shoe companies such as Nike, Adidas, Timberland and others. Links to the story and a response from Timberland’s CEO Jeff Swartz can be found on my blog http://www.strategic-imperatives.com dated 10/22/09. Jeff Swartz elaborated on this situation on Earthkeepers 10/22/09 http://www.earthkeeper.com/blog/uncategorized/update-from-the-amazon/#comment-10407 His letter illustrates some of the complexity of managing the transparency and traceability of the supply chain. Kudos to Timberland for being part of the solution once they were made aware of the situation.

    Comment by Diana Rivenburgh — October 23, 2009 @ 1:22 pm

    • Hi there Diana, thanks for reading and adding to the content. That example does fit in very well to the triple bottom line and how supply chain actions can/should involve a more systemic response.

      Comment by Whit — October 25, 2009 @ 4:03 pm

  4. Good overarching framework. Very helpful.

    Where does “resource depletion” fit in this framework? I would expect to see it explicitly mentioned in both upstream and operations as it is for almost every organisation a key impact and issue that needs to be addressed, if only via the Carbon Reduction Commitment.

    This framework also shows that CSR is only a small (but important!) aspect of an organisation’s strategic and operational responsibilities. Becoming a Sustainable organisation requires this systemic view of these three areas need to consider. Unfortunately today a lot of CSR departments in too many organisations are not involved enough in the whole strategic renewal process, nor are they always equiped to do so.

    Do you think CSR departments will be replaced by individuals who are more closely linked/embedded in the organisation’s management at every level? Or will they stay as a more objective resource, responsible for introducing new initiatives from the side-lines?

    Comment by Gwyn — October 25, 2009 @ 4:51 am

    • Hi Gwyn, thanks for reading and continuing the conversation. Resource depletion and potentially repletion are good points that I could’ve included. They would fit into the environmental parts for all three segments in the value chain.
      CSR is a valuable pursuit. I imagine that CSR, whether they be occasional or devoted resources, in some companies will become part of a greater pursuit as an organization wide sustainability initiative. If CSR were to be given the same if not increased importance and then pushed to be linked with every level of management, then that would be a stronger outcome because the direct application of the CSR intention would be realized. However, the organizational situation would likely change from company to company because of the situation each organization is in.

      Comment by Whit — October 25, 2009 @ 5:49 pm

  5. Ah!!! at last I found what I was looking for. Somtimes it takes so much effort to find even tiny useful piece of information.
    Nice post. Thanks

    Comment by Car Insurance Guy — November 11, 2009 @ 3:41 am

    • I’m happy to have helped Car Insurance Guy!

      Comment by Whit — December 3, 2009 @ 1:55 pm


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