Introduction
The ever-changing societal expectations on the relationship between business and society have spawned diversity in attempts to define and redefine this relationship. Consequently, business leaders keep track on its ongoing sustainability, which is often expected to involve a simultaneous focus on three areas of performance: economic, social, and environmental (Colbert & Kurucz, 2007). As of 2004, KPMG (2005) reported that more than half (68%) of the top 250 multinationals on the Fortune 500 embraced the triple bottom line (TBL) public reporting framework.
The concept of TBL appeared in business performance literature when John Elkington (1994) proposed it as a method for measuring sustainability, an endeavor, which had been elusive in the implementation side of corporate social responsibility (CSR) or the latter conception of corporate sustainability (CS). As early as 2012, the concern about measuring corporate performance based on CSR parameters achieved attention among academics and business leaders alike. However, the inherent difficulty in translating CSR concepts into workable corporate performance measures remained elusive. In fact, Kaufman and Olaru (2012) observed that such measurement can only be implemented indirectly. The emergency of TBL, therefore, as an accounting technique at measuring corporate performance offers a promise that finally CSR can be measured directly. The central purpose of this work is to explore the relevant propositions in TBL in relation to its capability to measure CSR in multinational companies’ fulfillment of their obligations to its stakeholders.
Differences between CSR and TBL
There are fundamental differences between CSR and TBL. The most central differences can be observed in three areas, such as scope, attitude towards profit, and implementation framework. First concerns Scope. While CSR focuses primarily on social and environmental issues (Kaufman & Olaru, 2012), TBL covers a broad range of issues summarized into three dimensions of people, planet, and profit (Elkington, 1998; Colbert & Kurucz, 2007).
Second concerns attitude towards profit. CSR tends to be narrowly focused on the corporate responsibility and even obligation often to the minimization of corporate profitability (Fauzi, Svensson, & Rahman, 2011); while TBL blends a practical perspective of profitability and considers it as of equal importance to social issues (Elkington, 1998).
Third involves the implementation framework: CSR proponents are unanimous in demanding for legal implementation of CSR as a corporate legal obligation (Fauzi, Svensson, & Rahman, 2011); while TBL is concerned more upon providing business leaders with a framework of measuring their broad triple P obligations (Elkington, 1998).
In effect, TBL provides a wider and more objective framework at treating the broader but more fundamental concerns of people, planet, and profit without neglecting either.
Persuasive discussion
The concept of distributive justice is currently at a state of flux as is the concept of justice itself. So far, there seems to be consensus yet (Konow, 2001). Robert Nozick defined it as just distribution as the point when everyone is fairly entitled to the holdings they possess (Konow, 2001) or they ought to have (Van Parijs, 2007). However, distributive justice does not merely concern itself with final allocation of rewards and of responsibilities as well. In effect, entitlement implies both rewards and responsibilities.
Moreover, Konow’s accountability principle calls for the allocations of goods proportionate to concrete contribution (Konow, 2001); thus, a twice productive worker should justly receive twice the payment. Conversely, the efficiency principle calls for maximal allocations while needs principle merely those sufficient to meet a person’s basic survival needs. This restrained list of the diversity of perspectives over distributive justice leads us to a fundamental question: How much allocation is just and unjust? Moreover, distributive justice is not necessarily about economic definitions (e.g. equal income or equal wealth), Van Parijs also described it as also of interest over equal access to non-economic goods (e.g. equal opportunity) or the so-called public goods (e.g. national peace, protection from damaging climate change, guarantee of mutual aid in emergency events, etc.).
This issue on consensus becomes more complicated when we introduce the special contexts of global trade and social responsibility. Peripheral global justice, for instance, is facing natural constraints in the global distribution of economic resources between nations. Which particular society deserves more allocations than other societies? How should the three principles of accountability, efficiency, and need be applied with objective equity and fairness? Who and how should entitlement be defined as basis for allocation?
If we disregard other objects of allocation and focus on the economic distribution of wealth, it will be clear that wealth allocation is disparaged even in the United States. In 2010, for instance, the average household have a net worth of $498,800; while the median household only has $77,300 in net worth (Levine, 2012). Another study (Norton & Ariely, 2011) noted that more than 80 percent of the American wealth are owned by 20 percent of the American households. This indicates that most of the American households were economically below national average in net worth.
The stark gap between people in the current societies are real. Certainly, at a certain point, serious distributive injustice occurs as far as the principle of need is concerned. At the bottom of the economic quintiles in the American society, like any other society globally, people in dire need exists, which distributive justice should demand attention and solution at least at the need level. And, yet, the principle of accountability will dispute even the generous initiative of the need-based distributive justice. Equity, too, is a central issue, particularly the line of: Do those at the bottom quintile deserves or entitled for greater allocation of the national wealth? The conflicting state of philosophical thoughts with regards to distributive justice inevitably impacts on the relationship of current wealth distribution with both CSR and TBL. Have multinational corporations the obligation to distribute more wealth to the segment of societies at the bottom of the economic quintiles? Should doing so, will fulfilling the principle of need, satisfy the requirements of the principle of accountability? Should the principle of efficiency be justifiable as a focus of CSR and TBL?
The same unresolved conflict in the understanding of distributive justice will visit the deliberation of multinational companies in devising their CSR and TBL strategies. In fact, in the issue of wealth distribution, there is an inherent conflict of interest involved between the need to follow the need principle of distributive justice and the managers’ fiduciary obligation to their shareholders, even to their direct stakeholders, such as their customers and employees. This conflict of interest can be illustrated in two simple questions that address basic issues on wealth transfer or allocation: Is it fair for the customers to pay more for a company’s product in order to support its social obligations? Is it fair to employees not to receive their share of wage increase corresponding to the expenditures allocated for social obligations? Does society, including the bottom economic quintile of society, have the priority in wealth allocation over direct stakeholders: investors, employees, and customers? Will it be insufficient to consider that these stakeholders, too, are members of that society?
Conclusion
The most objective stand that can be taken in this argument will be to disagree that society responsibility be made a legal obligation for multinational corporations because that will counter primarily to their fiduciary obligations with their shareholders. However, generosity flowing from the hearts of the primary stakeholders whose economic interests will be directly affected by CSR and TBL initiatives should be encourage; but not obligated. When that condition exists, going for TBL beyond CSR will become a work of corporate generosity to the society where its businesses operate.
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