The 3 Ps of Sustainability
The 3 Ps are regularly discussed. Sometimes it is about the Triple Bottom line. But what do 3 Ps have to do with sustainability? And how can you use the 3 Ps as an organization to conduct corporate social responsibility? Move to Impact explains.
The basis of corporate social responsibility is a strategy that seeks a balance between the social, environmental and economic aspects. These three aspects provide the basis for the 3 Ps: People, Planet & Profit. It is an art to ensure that the 3 Ps in daily business activities are and remain in balance. The so-called Triple bottom line is a situation in which the organization balances economic susceptibility, environmental friendliness and social responsibility.
The three dimensions only come into their own when all three are clearly important in business operations. When all three dimensions are included in business operations, management will not only be based on the financial aspect, but also on the impact of the organization on society and the environment. But what does that mean?
The First P stands for People
The P for People stands for care for the whole of society: people within, but also outside the organization. A sustainable organization offers a livable environment by means of good labor relations, attention to the employee’s development and the division of responsibility. The sustainable organization does this not only for its own employees, but also with respect for the rights of the employees in the supply chain.
The second P stands for Planet
The P for Planet stands for the responsibility that the organization takes with regard to the environment. A future-proof organization has a proactive attitude towards the pursuit of a healthy natural living environment and solving environmental problems. This can be reflected, for example, in the policy on recycling waste, choice of suppliers (regional versus international) and the mode of mobility.
The third P stands for Profit/Prosperity
To be a viable organization it is important to maintain a healthy financial position. Profitability is the foundation of the company, so adding economic value is a prerequisite for improving the second other dimensions.
Why would an organization make the 3 Ps important?
For years, the priority of organizations has been to maximize the dividend for shareholders. However, acting purely on this motivation is harmful to both society and the economy. By focusing only on the added economic value and excluding the impact on society and the environment, shareholders steer purely in the short term.
Climate change and inequality are driven by the organization’s motivation to cut costs, regardless of social or environmental disadvantages. Short-term profit management creates long-term unforeseen costs. It is difficult to express the direct costs of damage to the ozone layer, destruction of the rainforest or exploitation of children in developing countries. However, organizations should also include these costs in their business operations.
A business strategy focused on the short term harms its own business model in the long term. Not only reputation damage could lead to a business risk in the future. Doing business in a world that is slowly going down is not good for the continuity of the company.
Loss-making targeting the environment
An example of the danger of focusing on short-term goals only is the American company Peobody Energy. Peabody Energy is the largest private sector coal company in the world. In 2018, Peabody had sales of $ 5.6 billion transporting 187.7 million kilograms of coal. However, the climate and health costs of burning that coal were about $ 30 billion.
Peabody’s impact costs the earth five times as much as the turnover they make with it. Looking at impact instead of focusing purely on financial profit, would Peabody still claim to be a successful company?
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