The Pit - IMI Trust

Macquarie Bank is down 20% from it’s all time highs a fortnight ago.  This was mainly caused by concerns on the creditworthiness of consumers taking out Sub Prime loans in the US.  However, you shouldn’t cry for the bank here.  This is the reaction from Jim Cramer on CNBC about the market in the US at the moment.  Armageddon!

The traditional benchmark companies use for success is financial. Money talks. Now, there seems to be a trend towards ‘Triple Bottom Line’ values. Triple bottom line is to achieve success on three levels - Economic, Social and Environmental.

The more cynical of us would think that it is a ploy from marketers to exploit fears over climate change and the lack of community currently pervading society. However, members of Generation X and Generation Y inherantly have a ‘greener’ social compass and a Triple Bottom Line agenda is effective in speaking directly to these groups.

Investors and consumers alike are actively looking for companies, products and opportunities with that fit within a Triple Bottom Line agenda. The focus is no longer just on achieving solid to spectacular earnings from quarter to quarter, just to keep shareholders and employees happy.

Government, and shadow government, are both using Triple Bottom Line metrics to shape policy. Corporates, such as Westpac Bank, are spending millions on advertising to align their brands with consumers who are socially and environmentally minded.

Countries are looking at carbon offsets, people are looking to be carbon neutral, businesses are looking at sustainable practices. And seemingly, for the first time, profit can be generated too from these scenarios. This is why Triple Bottom Line is an important change to the corporate landscape. Historically, companies have looked at social and environmental initiatives to occur at the expense of profits. Today, there can be success on all three fronts: economic, social and environmental.

For instance, governments are allocating resouces and grants to ideas with a triple bottom line bent, corporates are willing to sponsor these initiatives and investors are passionately seeking companies with triple bottom lines to invest in.

In the last few weeks we have come across two powerful companies with solid triple bottom line structures. Companies from isolated rural areas in Australia, in areas that have had it tough because of drought and natural disasters, in recent years. They have now captured the interests of companies and governments worldwide.

This will be interesting space to watch in the coming months as we lead up to a federal election and over the next few years as the impact of triple bottom line companies is felt by society.