Triple Bottom Line Impact of
Micro,
Small and Medium Enterprises
With
the world moving towards sustainability, many organisations have adopted
various measures to shift towards green practices. The Triple Bottom
line is one such approach. Triple Bottom Line (TBL) is an accounting
framework that measures the three dimensions of performance of an
organisation: economic, social
and
environmental, combining the traditional matrix of finance with
measurements of environmental impacts and social justice. It
systematically ensures that companies look at their lifecycle impacts to
reduce carbon emissions and ways to improve the impact of people
involved, also ensuring efficiency of the workforce.
There is a crucial need for designing the
TBL framework for both growing start-up enterprises and the existing
enterprises, both in big corporations and the MSME space. MSMEs play a
key role in increasing competitiveness and promoting rural and global
value chain development, thereby achieving inclusive growth and poverty
reduction. Large businesses and national economies are dependent on
micro, small and medium enterprises. The MSME sector in India
contributes significantly to India’s economic and social development.
Therefore, specific indicators devised to track environmental and
societal impact can help in minimising the negative effect of the firms
on the people and the planet.
Many organisations have embedded
sustainability into their system through utilising the reporting tool,
Sustainable Reporting by GRI. However, apart from reporting, a proper
TBL framework for MSMEs is not
in place. Many big businesses perceive sustainability as an added
expense and a distraction from their main targets. This fundamental
misunderstanding acts as an impediment for a paradigm shift in the
operation and management of the system. There is a need for the
businesses to identify the overlap between profit and sustainability.
The portrayal of a business as eco-friendly and sustainable has a
positive reception by the public over its unsustainable competition.
Companies like PepsiCo and H&M have reported increased sales by
advertising their push towards sustainability.
In the MSME space, TBL framework is
perceived to be resource and cost extensive and without the availability
of subsidies and incentives, the long-term benefits of this framework
will not be realised. The challenges with respect to the lack of
availability of consistent data and a uniform framework for assessing
the credit worthiness of diverse MSMEs poses a problem to financial
institutions to lend money in order for the MSMEs to design their
infrastructure around the Triple Bottom Line framework. The systematic
shift in existing MSMEs can only realised through perception shift
towards sustainability, capacity building of the current workforce and
access to finance. ■
Isha Sen
isen@devalt.org
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