Certified Supply Chain Professional (CSCP) Practice Exam

In terms of economics, the triple bottom line looks at what?

1. Short-term profits only

2. Plans for short and long-term needs

3. Maximizing shareholder value

4. Expanding market share

The correct answer is: Plans for short and long-term needs

The triple bottom line is a sustainability framework that evaluates a company's commitment to social, environmental, and economic responsibilities. This concept goes beyond traditional financial metrics by incorporating a broader view of value creation. It takes into consideration the long-term impact of business practices on people, the planet, and profits. Focusing on plans for both short and long-term needs aligns perfectly with this approach, as it emphasizes a balance between immediate financial performance and sustainable practices that support the well-being of society and the environment over time. Companies that utilize the triple bottom line are encouraged to look ahead and develop strategies that not only yield profits now but also promote enduring success and responsibility for future generations. In contrast, focusing solely on short-term profits ignores the broader implications of business practices, while maximizing shareholder value tends to prioritize immediate financial returns at the expense of other stakeholders. Similarly, expanding market share might not necessarily align with sustainable practices, as it could lead to practices that harm social or environmental factors. Hence, taking a holistic approach that considers both short and long-term needs is vital in the context of the triple bottom line.