ACCA Applied Knowledge · Business and Technology · Environmental and sustainability factors
Which of the following best describes the 'triple bottom line' approach to reporting a business's performance?
The triple bottom line measures and reports performance across three dimensions: economic (profit), social (people) and environmental (planet). It widens reporting beyond financial results alone, so that an organisation is judged on its overall impact, not only on the profit it earns for owners.
- AReporting financial results using three separate statements: profit or loss, financial position and cash flows
- BMeasuring and reporting performance across economic, social and environmental dimensionsCorrect
- CReporting performance to the three main stakeholder groups: shareholders, employees and customers
- DSetting short-term, medium-term and long-term financial targets for the business
Explanation
The triple bottom line, often summarised as people, planet and profit, extends performance measurement beyond financial profit to include social and environmental outcomes. The first option describes the main financial statements, not this concept. The stakeholder option is wrong because the three lines are dimensions of performance, not three audiences.
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