Double bottom line is a relatively silly name for a simple concept: businesses can be about more than just profit. Double bottom line usually means “profit and social good” and triple bottom line usually means “profit and social good and environmental sustainability”. God knows what a quadruple bottom line would be, since environmental sustainability seems to fall under social good. Really, double is the sweet spot: profit and “not sucking”.
Despite the name, the concept is fairly important. Most folks aren’t aware that CEOs have a fiduciary duty: one of which is that they are legally obligated to maximize profit for their shareholders (and can actually be sued for not doing so). By formally introducing a second bottom line and writing it into the company mission, they are then allowed to use that second bottom line as a justification for taking actions that aren’t explicitly profit-oriented. Which, in turn, prevents them from being sued for not doing terrible things in the name of profit. Pretty nifty.
So explaining this over dinner to a friend, I used the restaurant we were sitting in as an example. It might be more profitable, I posited, to swap out our green salad for some fries and if this restaurant was publicly traded, shareholders could conceivably try to force that that move. If it was a double bottom line restaurant, however, the manager could argue that it would make people fat and that would be a legitimate defense.
Which got me thinking: what if more restaurants, private or public, were double bottom line? That is, what if they were concerned with reducing the calorie count of the food that they served? Large chains already are, because in NYC and some other markets, they are required to put the calories on the menu. But when I go to any of New York City’s wonderful restaurants, there is literally no reason for them to pay attention to my health – taste/value ratio is literally the only bottom line.
The idea behind double bottom line is not only that it protects companies who choose to pursue “not sucking” but that it sets another goal for employees to strive for and in turn differentiates that company. It is the most authentic form of marketing: saying something and doing it. We all want to be healthier – is it really impossible to compete as a restaurant willing to help us do it? For those that say yes, consider that twenty years ago, there were almost no double bottom line companies. And now Tom’s Shoes. Chobani. Seventh Generation. Warby Parker. Ben & Jerry’s. Patagonia. It is a very long list.
Restaurateurs – you need to step up your game.
Also published on Medium.