The economic component of the Triple Bottom Line is often assumed to be the same as the company’s financial performance. But economic performance is not the same as financial performance. Finance concerns the market valuation of transactions that pass through company books. Economics, on the other hand, is the means by which society uses human and natural resources in the pursuit of human welfare.

In the past few years, Novo Nordisk has been working towards building a more systematic approach to accounting for economic performance. It is our aim to be part of the international business community’s efforts to develop standards or guidelines for economic reporting. That is why we support the development of reporting guidelines under the Global Reporting Initiative (GRI).

In this section we look at the development of our economic stakeholder model as well as indicators of economic performance, all of which can be considered a work in progress as
economic impact is a relatively new area of reporting for most companies.

Economics extends beyond the boundaries of a single organisation and is linked to both the environmental and social elements of sustainable development. This makes measurement of a company’s economic impact much more challenging.

From this perspective, our business decisions certainly have an impact on our company’s profitability and its attractiveness for employees, investors and the communities in which we operate. But those decisions also reverberate throughout the economy, affecting economic growth, employment, and the health and well-being of people who depend on our products.

We are aware that there is a downside as well as an upside to a company’s economic impact. Investments in a community can serve as an engine of growth in the economy, by  boosting local supply chains and developing a new skills base. The goods and services that a company produces can also contribute to a higher quality of life. On the other hand, growth in economic activity does not in itself reduce poverty, provide a cleaner environment, or achieve greater equality or better quality of life.

By attempting to understand, manage and communicate our economic impact we hope to identify the type of economic growth that supports sustainable development. Analysing our socio-economic performance makes clear the trajectory from decision to impact. It allows us to capitalise on our commitment to sustainable development. It is also an important stepping stone towards fully integrating Triple Bottom Line thinking.