Sustainable Procurement: Triple Bottom Line (TBL) concerning purchasing decisions

Date: 30/11/2019

Prepared by: Majed Abdeen

Traditional Project Managers stressed what is termed the “iron triangle - Triple Constraints” performance criteria, in that projects were meant to deliver on a project brief to the established cost and resource budget, to the planned time and to the level of quality and functionality specified in the brief (PMI, 2017, p. 34). However, as many thought leaders have pointed out, the iron triangle is insufficient to provide the value expectation of a project. It should also deliver on strategy, and projects also have a wider social context to be sustainable in financial, environmental, and societal terms: the triple bottom line (TBL) (Walker & Lloyd-Walker, 2015, p. 37). Sustainability today is about the triple bottom line of people, prosperity, and the planet. (GPM, 2019) Global adds into the mix the need to focus on product and process. In other words, sustainability is not limited to environmental matters but must also consider the impact of the project on society, workers, human rights, the environment, and other such elements (Ajam, 2018, p. 118).

References

Ajam, M. A., 2018. Project Management beyond Waterfall and Agile. 6000 Broken Sound Parkway NW, Suite 300: Taylor & Francis Group, LLC.

GPM, 2019. The GPM P5™ Standard for Sustainability in Project Management. 2nd ed. USA: GPM Global.

PMI, 2017. A Guide to the Project Management Body of Knowledge. 6th ed. Pennsylvania: Project Management Institute, Inc.

Walker, D. H. & Lloyd-Walker, B. M., 2015. Collaborative Project Procurement Arrangements. 1st ed. Newtown Square, Pennsylvania: Project Management Institute (PMI), Inc.

Introduction

Sustainable Procurement refers to benefitting organisations, society, and the environment during procurement (Islam et al., 2017, p. 2). Companies must focus on the Triple Bottom Line (TBL), economic prosperity (Islam et al., 2017), environmental quality and protection, and social justice (Elkington, 1997, p. 70). There are several varying descriptions and names (3BL (Norman & MacDonald, 2004), Sustainability (Marnewick, 2017), 3Ps (People, Profit, and Planet) (Gachie, 2019)) but the concept is the same.

Sustainability Principles in the IT/IS sector

Projects in the IT and IS sector tend to have a minor environmental impact compared to construction projects (Marnewick, 2017, p. 1151), but organisations must still consider TBL, including it project design. TBL must be implemented across the supply chain (Meehan & Bryde, 2011, p. 95), especially relevant in my organisation as service acquisition through suppliers is the primary purchasing focus. Literature indicates a five-fold focus is required: People; Environment; Society; Human Rights; Economic (Marnewick, 2017, p. 1163). Consideration of these allows IT and IS projects to implement TBL. My organisation must focus on developing relationships with suppliers who already apply TBL, and encouraging and requiring existing suppliers to implement the TBL. Green IT encourages firms to benefit the environment through energy efficiency, reuse, and recycling and by considering materials, energy, water, waste, and travel usage (Melis et al., 2009, p. 32). In IT/IS projects, the focus is usually on financial benefits; the TBL must be integrated by ensuring product efficiency and longevity and ensuring strong business cases for projects (Marnewick, 2017, p. 1158). Social impacts are achieved by ensuring suppliers use local firms and talent, and product suppliers incorporate human rights and ethical practices in manufacturing. New developments in AI, robotics and cloud-based computing can support TBL implementation (Rauch, 2018; Agnos, 2018). A new framework for TBL metrics, the Sustainability Compliance Index (Gachie, 2019, p. 318), is valuable for measuring TBL: this can be used by my company to assist in implementation by ensuring TBL is included at a strategic level across all IT and IS projects and throughout the company.

Challenges in applying TBL

In applying TBL in the IT/IS sector, challenges are encountered. Immediately, for those seeking best-practice or implementation suggestions, it is clear research focuses on engineering and construction; there is a dearth of knowledge for IT/IS (Marnewick, 2017, p. 1155). Literature indicates that generally there is little focus on the Social and Environmental aspects of TBL, in favour of the economic aspect in IT/IS firms. In my experience, sustainability and TBL are thought about on an ad-hoc basis or only as benefits my organisation, as managers recognise TBL but are inactive, limiting application and implementation due to focus on profit, which can be remedied through integrating TBL into core functions to ensure actions incorporate the full TBL spectrum. Ethical issues link to this: the Social and Environmental aspects of TBL often bring additional costs and work, thus managers are challenged: act ethically, or in the company’s economic interests (Marnewick, 2017, p. 1155).

TBL itself presents difficulties from the three distinct categories, resulting in separate actions and indicators catering to each, thus a lack of overall integration of TBL-enhancing activities (Meehan & Bryde, 2011, p. 103). Within my organisation, while there is a focus on the Economic aspect, any further actions focus on Environmental, not Social sustainability. This is also identified in the literature (Meehan & Bryde, 2011, p. 103).

Conclusion

The increase in knowledge of TBL and Sustainability has resulted in societal pressure on many organisations, including mine, to become more socially responsible. Purchasing enables organisations implementing TBL to pass requirements to suppliers (Islam et al., 2017, p. 2), an action undertaken in my company. In future, companies including mine should ensure TBL is implemented at a strategic level (Hoejmose et al., 2013, p. 589). This can be achieved via indicators such as the Sustainability Compliance Index (Gachie, 2019, p. 318), or those outlined for Economic and Social purposes (Melis et al., 2009, pp. 25,30-32), or the Global Reporting Initiative (GRI) indicators (Ogbodo, 2015, p. 145). Greater use of AI and Robotics may assist companies in integrating TBL (Rauch, 2018).

References

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Elkington, J., 1997. Cannibals With Forks: The Triple Bottom Line of 21st Century Business. 1st ed. Oxford, UK: Capstone Publishing Limited.

Gachie, W., 2019. Project sustainability management: risks, problems and perspective. Problems and Perspectives in Management, 17(1), pp. 313-325.

Hoejmose, S., Brammer, S. & Millington, A., 2013. An empirical examination of the relationship between business strategy and socially responsible. International Journal of Operations & Production Management, 33(5), pp. 589-621.

Islam, M. M., Turki, A., Murad, M. W. & Karim, A., 2017. Do Sustainable Procurement Practices Improve Organizational Performance?. MDPI journals: Sustainability, 9(12), pp. 1-17.

Marnewick, C., 2017. Information system project's sustainability capabality levels. International Journal of Project Management, 35(1), p. 1151–1166.

Meehan, J. & Bryde, D., 2011. Sustainable Procurement Practice. Business Strategy and the Environment, 20(2), pp. 94-106.

Melis, A., Carta, S. & Rio, S. D., 2009. CSR and integrated triple bottom line reporting in Italy: case study evidence. In: C. A. Mallin, ed. Corporate social responsibility: A Case Study Approach. Cheltenham, UK: Edward Elgar Publishing, Inc, pp. 9-39.

Norman, W. & MacDonald, C., 2004. Getting to the bottom of "triple bottom line". Business Ethics Quarterly, 14(2), pp. 243-262.

Ogbodo, O., 2015. A Stakeholder Approach to Triple Bottom Line Accounting: Nigerian Experience. International Journal of Academic Research in Business and Social Sciences, 5(6), pp. 142-160.

Rauch, C., 2018. AI for Good — How Artificial Intelligence can Help Sustainable Development. [Online]

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