In recent times, the concept of sustainability has grown in discussions around the organization of production and consumption activities in society. A Forbes article published in March 2022, which cited research from First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania, argued that “consumers across all generations—from Baby Boomers to Gen Z—are now willing to spend more for sustainable products.”
Although the article reported that almost all the senior retail executives surveyed agreed that consumers demand better sustainability practices, only a few retailers were noted to be innovative and supportive of conscious consumerism.
This divergence between consumer expectations and actions of corporates, despite growing awareness of sustainability demand, as shown in the Forbes article, highlights the wider paradox confronting society today. That is, the growing awareness of the need for sustainability that is not matched by action, especially on the part of corporations.
In my opinion, some of the challenges in achieving real gains in the sustainability drive can be linked to the failure to appreciate the frameworks, principles and pillars of sustainability which address problems that emerge in balancing profit goals with social and environmental aspirations in a capitalistic setting.
Therefore, the 3Ps of sustainability (People, Planet and Profit) is an important and relevant concept that needs to be revisited to understand how the different objectives of businesses can be managed to achieve meaningful progress in promoting sustainable practices.
The 3Ps of People, Planet and Profit, otherwise referred to as the 3Ps of the Triple Bottom Line, was conceptualised in 1994 by British management consultant John Elkington. At its core, the 3Ps suggest that measuring the success of a business should not be dependent on accounting metrics alone. Instead, there should be a paradigm shift of business focus beyond profits to the creation of meaningful impact for people and the planet.
In essence, it proposes an improvement from shareholders’ capitalism to stakeholders’ capitalism as Elkington argues that the 3Ps are “supposed to provoke deeper thinking about capitalism and its future.”
“People” in the 3Ps refer to the different groups of people that are affected directly or indirectly by the decisions and actions of a business. Consequently, businesses are expected to take into consideration their employees, customers, communities, and suppliers and not just shareholders when making business decisions. In practice, this means if a business’ operation is harming any of its stakeholders (such as reinforcing negative stereotypes of a marginalised community) then the business is not truly successful.
The “Planet” P emphasises the need for businesses to create economic value without harming or degrading the environment. The “Tragedy of the common” is the idea that when a resource is commonly owned and accessible to all, people tend to act in their individual best interest and, in doing so, create a sub-optimal outcome for the group, e.g., overfishing a lake. Capitalism incentivises individuals to maximise their welfare and take up as many resources as they want. It is therefore important that in such an economic setting, there should be a conscious effort by everyone to ensure that resources are not wasted or depleted. More importantly, our actions do not lead to the climate crisis that threatens the future of life on our planet.
The third P, “Profit”, is a very important consideration because, at the end of the day, businesses exist to make a profit as a reward for industriousness. Profit, where not abnormal or exploitative, is a great incentive for promoting innovation and allocation of resources to value-creation.
The three Ps are interlinked, and they must form the basis for any action or plan to promote sustainable living. For example, if care for the planet takes a backseat in the quest to promote profit and people’s objectives, then the long-term continuity of people and profit would be jeopardised. After all, what gains would there be to make in a world where people are sick, displaced or killed by environmental disasters?
Similarly, if the welfare of only a few stakeholders is considered, even when the planet and profit goals are successful, the outcome will be less desirable. A good example to highlight this point is the systemic gender-based discrimination that women still face even in “advanced” societies like Denmark and Sweden, where green initiatives have gained wider acceptance.
Also, without profit, it would not be possible to maintain a people and planet focus. An organisation that is structured as profit-based but neglects that objective entirely to pursue planet and people causes might eventually run out of business. It is necessary, therefore, that there is a fine balance of all the economic, social, and environmental goals for sustainability to move beyond mere aspirations to concrete actions and gains for society.
One of the criticisms of the 3Ps has bordered on the belief that adhering to such a framework limits the profit potential of businesses and the ability of societies to grow wealth. Another popular argument against the 3Ps is that it could lead to virtue-signalling because of the lack of specific guidelines on what companies should do or avoid being sustainable. More so, some experts have argued that rather than 3Ps, there should be four, with “Purpose” as the motivating factor to drive the other Ps.
The counterpoints have been that the 3Ps, rather than stifle profit, have led to innovations that have unlocked the entrepreneurial spirit and created new jobs without putting the planet’s future at risk. At the same time, the 3Ps encouraged a more equitable distribution of wealth in society than when businesses were overly focused on shareholders.
Also, 3Ps proponents argue that each company should be allowed to develop specific plans suitable to their peculiar conditions and structure. Still, at the end of the day, the 3Ps should be the basis for assessing progress. This way, firms of different sizes and structures can be accommodated in the drive to push capitalism on a more sustainable path.
Despite the limitations of the 3Ps, it is widely accepted as a good foundation for understanding and defining what it truly means to be sustainable. It is my firm belief that when firms approach sustainability from the prism of the 3Ps, the chasm between expectations of the growing environmentally conscious consumer base and the actions of corporations will be bridged.