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How To Measure Your Triple Bottom Line

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Are you able to measure your organization’s ‘triple bottom line’? If you’re not already familiar with the business lexicon, it’s a term coined by Cranfield University’s visiting professor John Elkington. Elkington, a world authority on corporate responsibility and sustainable development, suggests that only by considering three critical factors – economic, social and environmental – can an organization take full account of the cost of doing business.

In my experience, companies want to do the right thing environmentally, but more importantly, they want to know if they can afford to do the right thing. And that leaves them with a fundamental dilemma: Is sustainability profitable? It’s a question that’s always eluded organizations at any sort of meaningful level. In the past, it’s been difficult to make an accurate link between sustainability and profitability and almost impossible to allocate it down to the granular product level. But not anymore.

Thanks to technology and innovation, it’s now easy to execute complex calculations, rules, and simulations with minimal IT involvement. Organizations globally can now accurately allocate their CO2 data from the bottom up, showing each step of the carbon backpack of specific products, as well as the cost allocation against both profit margin and sustainability.

It’s all possible thanks to the SAP Profitability and Performance Management engine, which leverages predefined models to simplify huge complex volumes of data down to any level of granularity with detailed traceability and unique simulation models for better profitability and sustainability outcomes.

It’s not just easy, it’s fast. We have many customers who have already dramatically accelerated their cost allocation calculations from days down to minutes.

At SAP, we are one of the world’s most experienced organizations in putting this into action for ourselves. In fact, it’s our CEO’s stated intention to make sustainability profitable and profitability sustainable.

If you’re wondering why you should bother measuring your own triple bottom line (or even how to go about doing it), you may be pleasantly surprised to learn that sustainability can not only lead to lower costs, but also greater long-term shareholder value and better economic, social, and environmental risk management. We even have a webinar dedicated to showing you how. The Link Between Cost Allocation and Sustainability shows you how to put profitability, sustainability, and cost allocation at your fingertips by defining the data sources and dimensions you require.  You can register to attend here.

As the old adage goes, it’s never too late to start, and it’s always too late to wait. With growing levels of public focus around climate change, global disruption and rising levels of consumer pressure, organizations are shifting their mindset from short-term profit to the longer-term public interest (one that’s both sustainable and profitable).

If you look around, you’ll see this shift already reflected in both corporate aspirations and actions globally, including here at SAP. Many companies are no longer simply about being the best in the world, but also the best for the world.  As you work towards your organization’s own triple helix of value creation, it’s important to ensure you can accurately capture both the granularity and traceability of your efforts and balance them effectively in the context of your own triple bottom line. Only then will you be able to measure the true value of your business.

Join me on the webinar on September 17th The Link Between Cost Allocation and Sustainability to find out more .  You can register to attend here.

Antonio Giannelli is Finance Solutions Business Development Expert at SAP.

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