Investors understand the emphasis on the bottom line from traditional rules of business. However, measuring the impact a company has on the world is another thing.
Are a company's practices sustainable? Does a business treat all its stakeholders well? Do they have equitable hiring practices? What is its strategy for dealing with climate change? This second set of metrics may become as important to investors and consumers as the first.
Companies with a double bottom line seek to do well and do good. While the first bottom line shows how revenue minus expenses leads to profit, the second is how a company measures its effect on society. As people and organizations look to create greater racial equity, fight climate change, and enable a more environmentally sustainable global economy, consumers and investors expect more from businesses.
Investors and consumers are looking at the double bottom line to measure progress on social and environmental priorities. The pathways to profit and purpose are converging, and it’s vital to understand where this trend is headed next.