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TOOLS OF THE TRADE The Triple Bottom Line Tool

Optimizing and Communicating Investment Performance JANET HAMMER*

Abstract: A new measurement tool helps optimize development investment for economic, environmental and social performance—what is referred to as the triple bottom line. This article introduces the concept, and explores the value of it for the shopping-center industry.

The Need For Triple-Bottom Line Measurement Triple-bottom line (TBL) refers to economic,

environmental and social value of investment.1 Attention to this concept has been growing, with key drivers ranging from improved financial performance (e.g., cost savings, better returns) to demand for stronger risk management, accountability and transparency. Whatever the drivers, recent research indicates that TBL is on the agenda of many corporate executives.2 The TBL concept is also referred to as the 3Ps (planet, people, profit), triple value adding, blended value, or sustainability. In response to this increased salience, a number of

sectors have developed tools or frameworks to assess and communicate TBL or sustainability performance. Examples include:

 GIIRS (Global Impact Investing Ratings System)— third-party ratings for the social and environmental impact of a company or fund;

 LEED (Leadership in Energy and Environmental Design)—third-party certification for buildings and neighborhoods;

 Envision—third-party certification for infrastructure;

 BREEAM (BRE Environmental Assessment Method)—a design and assessment method for buildings and communities started in the United Kingdom by the Building Research Establishment; and

 The Property Efficiency Scorecard—currently being developed by ICSC to help members assess the

environmental performance of shopping-center common areas.4

While TBL assessment tools exist for business and the

built environment, no tools have been created specifically for economic development investment. Responding to this gap, the U.S. Economic Development Administration (EDA) invested in development of the TBL Tool.

Value of the TBL Tool The TBL Tool can be used to optimize, assess and

describe triple bottom line performance of economic development and redevelopment projects, including shopping centers. It is designed to meet the needs of developers, investors and decision-makers in the private, public and non-profit sectors and can accommodate a range of community and project types. The TBL Tool may be useful to the shopping-center

industry to configure a project for stronger outcomes or describe alignment with sustainability goals. Developers may identify ways to improve performance or better communicate benefits of a project when seeking funding or approvals.

How The TBL Tool Works The process for developing the TBL Tool was rigorous,

pragmatic, inclusive and transparent. (See Box 9-1.)5 The tool’s goals for economic development were defined as follows:

* Ph.D.; Program Director, Initiative on Triple Bottom Line Development, Portland State University 1 The term was first coined by business consultant John Elkington in 1994. See John Elkington, “Enter the Triple Bottom Line,” in The Triple Bottom

Line: Does it All Add Up?, edited by Adrian Henriques and Julie Richardson, Earthscan, Sterling, Va., 2004, pp. 1-17. The concept of sustainable development emerged with the recognition that existing development patterns jeopardize the environmental systems necessary to sustain life and

economies, and do not meet the needs of the current generation in ways that maintain opportunities for future generations to do the same. 2 Knut Haanaes, Martin Reeves, Ingrid von Streng Velken, Michael Audretsch, David Kiron, and Nina Kruschwitz, “Sustainability Nears a Tipping Point,” Sloan Management Review (Research Report), Winter 2012. MIT Sloan Management Review and the Boston Consulting Group, Hollywood,

Calif., 2012, retrieved April 9, 2013. 3 The terms “tool,” “framework” and “process” are used interchangeably in the literature and here. 4 Steve McLinden, “Measuring Green,” Shopping Centers Today, Vol. 33 (No. 8), August 2012, pp. 42-44. 5 Further details about the TBL Tool development process can be found on the website:


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