The TRIPLE BOTTOM LINE TOOL is designed to help optimize and communicate the impact of economic development investment on economic vitality, natural resource stewardship, and community well-being. Click below to get quick facts, or download the User's Guide to dig into details.
The triple bottom line (TBL) concept originated in the business sector as a way to capture important investment value that is not reflected in conventional balance sheets. The concept – also referred to as people, planet, profit – aims to better account for environmental, social, and economic value of investment so that resources are more efficiently and effectively employed.
In economic development, traditional measures such as jobs created and dollars leveraged are important, but do not provide a complete view of investment impact. Triple bottom line economic development considers a broader array of economic, environmental, and social factors. We define triple bottom line economic development as programs, policies, or activities that create or retain jobs and wealth in ways that contribute to individual and community well-being over time. This type of economic development is distinct from economic growth, which may or may not promote community goals such as quality of life, access and opportunity, environmental stewardship, and fiscal health.
It is important to note that economic, environmental, and social dimensions of the triple bottom line are interrelated. For example, investments in green building may result in energy cost savings (economic), increased building value (economic), higher occupant satisfaction and productivity (economic and social), and lower natural resource and human health impacts (environmental, social, and economic). Ideally, a triple bottom line approach can provide a way to consider these connections and configure investments for strong performance.
The Triple Bottom Line Tool (TBL Tool) is designed to serve investors, economic development professionals, and decision-makers in the private, public, and non-profit sectors. The TBL Tool can be applied in a number of ways. As a design tool, you can configure development investments for strong results. As a decision tool, you can winnow, compare, or rank projects. As a communication tool, you can describe how an investment aligns with TBL goals and community priorities. As an educational tool, the documentation and case illustrations can help build understanding about economic development processes and impacts.
The TBL Tool can be used to review and improve a proposed project, prepare bid documents, or communicate with stakeholders. It can be used to compare one project on multiple sites, multiple projects on one site, or many different projects. Whatever the application, the TBL Tool supports strategic investment that contributes to quality of life and sustainability.
Development of the TBL Tool was led by Dr. Janet Hammer from Portland State University, in collaboration with Maggie McCullough from PolicyMap, Dr. Gary Pivo from the University of Arizona, and Dr. Ira Goldstein from The Reinvestment Fund. Dr. Hammer has more than twenty years experience working in private, public, and non-profit settings to help create high performance communities, and currently serves as director of Portland State University's Initiative on Triple Bottom Line Development. Ms. McCullough is the director of PolicyMap, an award-winning on-line platform whose value is captured in their tag line – "Good Data, Smart Decisions." Dr. Goldstein has decades of experience analyzing neighborhood investment strategies and serves as Director of Policy Solutions at The Reinvestment Fund – one of the country's oldest and most successful Community Development Financial Institutions. Dr. Pivo has an extensive record of research, consulting and public service, including developing industry-responsive triple bottom line metrics for the built environment and serving as Co-Director of the Responsible Property Investing Center.
Practitioners have provided input throughout the development process in order to ensure that the TBL Tool is relevant and user-friendly. This includes input from a survey of nearly 400 economic development professionals as well as focus groups with members of the International Economic Development Council (IEDC) and the National Association of Development Organizations (NADO). During key phases of the TBL Tool development, input was provided by a group of national advisors representing diversity of geography, area of expertise, and type of jurisdiction. You can learn more about our national advisors and input process in the TBL Tool User's Guide. We are grateful to the hundreds of people who have provided input to the TBL Tool development.
The process for developing the TBL Tool was rigorous, inclusive, transparent, and pragmatic. The TBL Tool is informed by community priorities, current research, leading edge practice, and practitioner input. This effort included the following:
Synthesizing these findings, we identified areas of convergence and defined performance areas and measures to support the triple bottom line goals of economic vitality, natural resource stewardship, and community well-being. Working with our national advisors and topic experts we then identified appropriate data sources to operationalize the measures. In developing measures, availability and quality of data was considered, as well as responsiveness to the unique features of particular communities and projects. Further, to ensure that the TBL Tool is relevant and user-friendly, there have been many points of feedback with end users including interviews, focus groups, a national survey of economic development professionals, and usability testing. Details about the TBL Tool development process and measures can be found in the TBL Tool User's Guide. Despite the rigorous development process, we fully expect the TBL Tool to evolve with use.
The TBL Tool considers how well a project seems to align with triple bottom line goals of economic vitality, natural resource stewardship, and community well-being. The TBL Tool uses a type of scoring called multi-criteria decision analysis – a procedure that allows items of interest that are measured in different ways to be considered together. For example, imagine you would like to select a product based on purchase price, maintenance costs, user interface, and environmental impact. Each of these criteria is measured in different ways: multi-criteria decision analysis provides a way to sum up these "apples and oranges."
The TBL Tool generates a score for each of the three triple bottom line goals: economic vitality, natural resource stewardship, and community well-being. Each goal is comprised of performance areas (outcomes that help us achieve our goal), and each performance area is comprised of measures (items that help deliver those outcomes). The score for a goal is computed by taking the average of its performance area scores, and each performance area score is computed by taking the average of its measure scores. Measures were selected based on their contribution to the concept of triple bottom line economic development and availability of data. Scores are based on a scale of 0 - 100, indicating the investment's degree of alignment or accomplishment. The tool does not explicitly weight measures; however, implicit weighting occurs because the relative weight of each measure varies depending upon how many measures are grouped in a performance area (e.g., a measure carries more "weight" if a performance area score is the average of three measures rather than ten measures). Users may wish to look more deeply at measures that are particularly important to their community or context.
In order to account for contextual issues such as differences in project type, size, location, and community characteristics a measure score may appear as NA, FYI or bonus: NA scores ensure that overall scores are not affected if data is unavailable or a measure is not relevant (e.g., affordable housing questions are not applied to a manufacturing facility that has no housing component); FYI scores present summary information that may be useful to reviewers but is not linked to project impact (e.g., leveraged dollars); bonus scores provide credit for specific areas of leadership. Detailed information about measures and scoring can be found in the TBL Tool User's Guide.
The TBL Tool generates a project report that includes both the project information and the project scores. This is helpful both for confirming that information was accurately entered and for considering potential areas for improvement. The TBL Tool also generates a "Due Diligence" report that provides a list of items that have been identified as completed, due to be completed, or warranting further attention.
When reviewing project reports it is important to keep in mind that scores speak to a project's alignment with TBL goals. Scores provide a general indication of how well a project aligns with TBL goals; two projects with the same score may differ in the type or magnitude of impact.
National advisors representing diversity of geography, expertise, and organizational size and type provided detailed input and review of the measures during development of the TBL Tool. The TBL Tool was pilot-tested to assess functionality (e.g., correct calculations, ease of navigation). The beta test phase for the TBL Tool ran from August 30, 2012 to May 31, 2013. Users represented diverse geographies, organization types, and levels of management. Feedback on the beta version of the TBL Tool was collected via a user-friendly on-line survey, as well as through more extensive testing and collaborative discussion with testing partners. Overall, users found that the tool provides meaningful information and is easy to use. We expect to continue improving the tool over time by responding to changes in data availability and user needs.
A list of project information that was needed to complete the most current version of the TBL Tool can be found here. Users were advised to print a copy of this data document to facilitate the process of collecting and entering data into the tool. Please note, the TBL Tool scoring function is currently on hiatus; questions and scoring in this document will likely be modified in future versions. As noted below, a companion document is available to assist organizations in applying the TBL Tool approach to their work.
The TBL Tool was created with funding by the U.S. Economic Development Administration and was publicly available between August 2012 and January 2015. A cost recovery model is required to sustain operations including fees for data and user support. Moving forward, we are considering making enhancements to the tool and offering services that support use of the tool and achievement of strong outcomes. Services may include trainings, TBL report verifications, and project certifications. The TBL Tool is on hiatus while we explore options for self-sustaining operations. If you are interested in using the TBL Tool, incorporating components into your work, or collaborating on its further development and dissemination, please contact: info[at]tbltool.org.
This companion document introduces the TBL Tool framework and suggests how the approach can be applied to your economic development efforts.
You can send questions or comments to info[at]tbltool.org.
The TBL Tool was developed with an eye toward continuous improvement based on changing data availability and end user feedback. Strong interest has been expressed in creating a version of the tool that can be applied to economic development investments that do not have a specific location or address (e.g., a citywide conservation program) as well as in version that can be used outside of the U.S. There is also interest in developing content that provides information on "how to," best practice, and verification services. Inquiries regarding modification of the TBL Tool to your context can be directed to info[at]tbltool.org.