Measuring Profitability, Social Impact and Sustainability
Many companies have extended their traditional focus on profits, the 'bottom line', into a wider perspective which measures
three aspects of the corporation's activities. These are:
1. Financial. Measures profitability and other financial measures such as turnover, growth, and market share.
2. Social. Measures impact on people's lives, particularly stakeholders such as employees, the local community, suppliers etc.
3. Environmental. Measures the effects of the company's activities on the environment with a focus on sustainable development.
In contrast to commercial sector businesses, organisations operating in the public sector and the nonprofit 'third sector' have
always operated with a focus on social impact, ie delivering services to the general public or a specific client group. Measures
of success in these areas are clearly not just about profit.
Companies in the commercial sector which are committed to Corporate Social Responsibility increasingly
express their results in terms of a 'Triple Bottom Line'.
Unlike financial measures, which have been developed using accounting standards, there are no universally accepted measuring
systems for social impact or environmental sustainability. These measures are currently being researched by various organisations
and provides an opportunity for corporations to pioneer new measures of their corporate social responsibility.
Note: This web page is not intended to provide comprehensive coverage of the subject, merely a brief introduction to provoke thought and to lead to a more in depth understanding and application of the topic, either through further reading - or from me as your management consultant, executive trainer or personal coach in a consultancy project, training course, workshop or seminar.