Mo' money, Mo' Money. Mo' Money.

A difficulty of the triple bottom line is the entrenched position that only profit matters. So justifying sustainability expenditures must occur in the context of return on investment (ROI). Redrawing the sustainability system diagram in terms of the profit aspect shows that not much actually changes:

Most of the considerations and feedback loops are still included because they all affect profitability in one way or another. However, since the focus is now on ROI, the message changes slightly to focus on comparing what each aspect costs vs what it brings. At a high level:

Contingency expenses vs Materials Cost

• Does it add more in materials or procurement costs than it saves in insurance, continuity plans, taxes / cap & trade costs, relocation costs and opportunity costs (business disruptions)? 
• Admittedly, the impact of one company on the overall environment is probably small which is why pricing the externalities helps (e.g. carbon pricing) as it focuses everyone on those externalized costs in a consistent, material way.

Utilities Costs vs Building Cost

• Does it cost more to add energy and water efficiency capabilities than it saves in operating costs? Studies say that the payoff is positive (3% - 7% increase in building costs for 10% - 50% decrease in energy usage)
• Not shown here but important for builders is the question of whether green buildings demand a premium in rental rates or have higher occupancy rates (they do by ~13% in $ and 3.5% in vacancy rate).

Productivity Gains & Decreased Training Costs vs Building Costs

• Does it cost more to add indoor environmental quality improvements (e.g. daylighting, thermal controls, exterior views, higher ventilation rates) than you gain through improved worker productivity and retention?
• It helps to consider that payroll costs are generally a much larger fraction of business costs than facilities + real estate costs. So if you can spend 7% in building cost to improve productivity of payroll by 2%, you will still come out very much ahead. Something like:
• For 1000 employees @ 250 sq. ft /ea in office space built in San Francisco is ~ $50M. Amortize over 30 years = $1.6M/yr. A 7% increase is ~$117k/yr.
• For the same 1000 employees @ $150k/yr in payroll costs = $150M/yr. If you can improve productivity by 2%, that is ~$3M/yr.
• ROI ~ 24.

So Mo'Money, Mo'Money, Mo'Money and sustainability really do get along.

To be a good member of society, you must first break the law.

NPR had an interesting story this morning about some of the challenges facing "socially responsible" companies. Top among them being "shareholder primacy." That is, the law governing corporations actually requires the CEO to pursue shareholder profit even at the expense of other corporate goals or values.

In short: the law does not recognize two of the three pillars of the triple bottom line: People, Planet, Profit.

Joel Bakan wrote a book touching on this topic: The Corporation: The Pathological Pursuit of Profit and Power.
Two relevant takeaways being:

• The current definition of cost in the profit = income - cost equation encourages externalization of as many costs as possible. The costs don't go away, they are just borne by someone else. In effect, you could say, the corporation is stealing from the parties who end up paying the cost.
• The corporate structure encourages this behavior but the structure was put in place by people. Therefore people can change it... though it won't be easy.

There is also an organization trying to change this: B-Corporation.net
They have put together a legal and support framework to put the other pillars back into the articles of incorporation and thereby allow officers to address all stakeholders', not just shareholders', interests.
In their own words:

Objective: 

Expand the responsibilities of the corporation to include the interests of employees, consumers, the community, and the environment.

A. Give legal permission and protection to officers and directors to consider all stakeholders, not just shareholders

B. Create additional rights for shareholders to hold directors and officers accountable to consider the interests of employees, consumers, the community, and the environment, while also serving the best interests of shareholders.

C. Limit these expanded rights to shareholders exclusively; non-shareholders are not empowered with a new right of action.

It's a little bit crazy to need the law to be amended to allow a corporation to act like you or I as private citizens are required to act.

An alternative is to go private (or stay private) and remove the legal pressure of shareholder primacy. But I suspect that is another topic altogether. Building a business model around this requires some deep thinking, planning and a different idea of what "exit strategy" means from the outset.