Is it reasonable to expect that managers can measure their social and environmental performance on the same level as they measure their financial performance with a triple bottom line?

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As social and environmental performance can be harder to measure than financial performance, one can argue that it’s not reasonable to expect managers to measure all three on the same level. Gauging financial performance is a relatively straightforward task. One can calculate gross profit margin, leverage, or working capital, assess the numbers, then issue a clear verdict about financial performance.

Social and environmental performance is more difficult to calculate in such a conclusive manner. For example, some might measure Amazon’s social performance in a positive light by pointing toward its public support of Black Lives Matter and its $10 million worth of donations to social justice groups. Others might point toward Amazon’s partnerships with police and ICE, its treatment of its BIPOC employees, and its adverse impact on small businesses and conclude that Amazon’s social performance is negative.

Determining environmental performance can be equally complex. For example, one could say that H&M’s goal to use only “sustainable fabrics” by 2030 and be “climate positive” by 2040 means that its environmental performance is laudable. Then again, one could say that its business model of producing billions of clothes per year hampers its environmental performance.

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