John Elkington strove to measure sustainability during the mid-1990s by encompassing a new framework to measure performance in corporate America. This accounting framework, called the triple bottom line (TBL), went beyond the traditional measures of profits, return on investment, and shareholder value to include environmental and social dimensions. Companies today are actively integrating sustainability into their business practices, practicing “conscientious business” methods due to a growing belief from leaders about the benefits of sustainability. Ritchie Capital Management includes all this plus more industry shifts and trends seen throughout 21st century business models.

1. Sustainable StridesToward Meeting the
Triple Bottom Line
Presentation by Thane Ritchie

2. “TheTriple
Bottom Line”
✤ John Elkington strove to measure
sustainability during the
mid-1990s by encompassing a
new framework to measure
performance in corporate
America. This accounting
framework, called the triple
bottom line (TBL), went beyond
the traditional measures of
profits, return on investment,
and shareholder value to include
environmental and social
dimensions.

3. 21st Century
BusinessTrends
Companies today are actively integrating
sustainability into their business practices,
practicing “conscientious business”
methods due to a growing belief from
leaders about the benefits of sustainability.

4. Changing
Customer
Expectations
Today, people increasingly want to know
that companies are sustainable and that
they are attending not only to their
economic success, but also to their
environmental and social impacts. Doing
things in those realms and
communicating about them effectively
helps an organization’s reputation.

5. Global
Sustainability
Trends
✤ On a global scale, large
corporate powerhouses are
disclosing greenhouse gas
emissions and 71 percent of
those companies are opting for
external audits.

6. Environmental
Protection
✤ Last year, the Obama
Administration enacted the
Clean Power Plan, a landmark
action to reduce energy bills for
households and businesses,
protect the future of the nation,
and create jobs in the energy
sectors. The U.S. isn’t the only
advocate of sustainability.

7. Reporting Corporate
Social Responsibility
(CSR)
In the EU, the Directive 2014/95/EU
required large companies with over 500
employees to report environmental and
sustainability issues by the end of this
year. While the debate has been years in
the making, a Newsweek article reported
that companies with lower greenhouse
gas emissions performed better which
sounds attractive to modern shareholders.

8. Social
Responsibility
& Millennials
Large companies that want to stay
competitive must keep up with the
‘millennial Joneses’ who have chosen
social responsibility as a place to put their
faith according to a recent Crain’s article
by Andrew Swinand.

9. “If you want to understand the magnitude of opportunities
available to organizations that align with charities, consider
this: For millennials — who, at 86 million strong, make up
the largest population group the U.S. has ever seen — social
responsibility is the new religion.”
–Andrew Swinand

10. CSR Performance
Indicators
✤ Most importantly, there are
benefits to a company’s bottom
line if they take the
environmental route, so even if a
corporation follows the trend as
a PR exercise, profiting from it
may be an added bonus. In the
United States, solar panels are
becoming the new normal and
though expensive to install, the
move towards solar provides
jobs and pay for themselves
within a decade or two.

11. Sustainability
leads to
Longevity
Major companies are starting to see the
long-term bottom line benefits of
sustainable investments. Case in point:
when Puma became one of the first
companies to publish the cost of carbon
emitted water, it set a standard for how
future companies could reduce energy and
water consumption by sixty percent. For
Puma, the savings amounted to millions of
dollars.

12. Changing Public
Perception
✤ Now in its seventh year, the
BSR/GlobeScan State of
Sustainable Business Survey,
has been tracking the growing
popularity of sustainability in
mainstream U.S. business.
Based on responses from its 250
corporate members, the survey
reports how attitudes have
changed towards issues of
climate change, human rights,
and company supply chains.

13. The BSR survey via FastCoexist
reports the following stats:

14. 14% of respondents say, “sustainability
is increasingly a part of [their] core
business, and can no longer be divorced
from overall strategy.”

15. A total of “40% say their own
sustainability programs are the primary
drivers for their efforts”, (not necessarily
regulation or investor pressure).

16. And, “42% see sustainability playing an
increasingly vital role in business, while
18% are uncertain…” (somehow)

17. Measuring
Sustainability
Measuring your business using the Triple
Bottom Line is one of the best markers of
how sustainable your business is, and
how profitable it really is.

18. References:
http://ec.europa.eu/finance/company-reporting/non-financial_reporting/
index_en.htm
http://www.newsweek.com/understanding-newsweeks-2014-green-
rankings-253545
http://www.fastcoexist.com/1679371/do-you-like-money-if-so-solar-panels-may-
be-for-you
http://www.bsr.org/en/our-insights/report-view/bsr-globescan-survey-2015
http://www.fastcoexist.com/3051750/this-is-how-far-companies-have-moved-
toward-sustainable-business-not-far-enough
http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

19. If you liked this piece,
please visit:
RitchieCapital.management
For nearly two decades, Ritchie
Capital Management has invested
in a broad spectrum of innovative
companies in the United States and
overseas. Whether taking an
investment fund into the next phase
of growth or choosing undervalued
opportunities with overlooked
potential, the team at Ritchie
Capital Management understands
the global marketplace. When the
wind changes course, they’re the
first to feel it.