Skip to content

ACCA Applied Knowledge · Business and Technology · Environmental and sustainability factors

A critic argues that the triple bottom line has a major practical weakness compared with traditional financial reporting. Which of the following is the most valid criticism?

The most valid criticism is that social and environmental outcomes lack a common unit of measurement. Unlike profit, which is in money terms, people and planet impacts are measured differently, so they are hard to combine into one comparable bottom line.

  1. AProfit cannot be measured under the framework
  2. BSocial and environmental outcomes have no common unit of measurement, making the three elements hard to combine or compareCorrect
  3. CThe framework forbids organisations from paying dividends
  4. DThe framework applies only to public sector bodies

Explanation

Profit is measured in money, whereas social and environmental impacts use varied, often non-monetary measures, so no single bottom line can be calculated. The framework does retain profit, does not prohibit dividends, and applies to any organisation.

Did you get it right without looking?

One question tells you little. A timed set on Environmental and sustainability factors shows your real accuracy, how long you take and where you lose marks.

Practise Environmental and sustainability factorsFree diagnostic mock

More Environmental and sustainability factors questions