Triple Bottom Line
The triple bottom line analysis is defined by the AWWAAmerican Water Works Association Asset Management Definitions Guidebook as “a method of assigning financial values to financial, social, and environmental factors that do not have an assigned market value, such as service interruptions to customers, noise, pollution, traffic delays, community aesthetics, consumer confidence, and public health and safety risks.” Use a triple bottom line analysis when evaluating the costs for each phase of the asset’s life cycle. The table below presents each life cycle phase and the financial, environmental, and social factors to consider when completing a triple bottom line analysis.
Table 1 – Factors to consider when completing a Triple Bottom Line analysis
Life Cycle Phase
Planning
Design
Construction
O&M
Repair
Rehabilitation
Replacement
Disposal
Financial
Personnel time
Personnel time
Capital Budget
Annual Budget
Parts and labor (annual budget), unbudgeted expenses, legal fees, loss of revenue
Parts and labor, capital project planning
Parts and labor, capital project planning
Fees, labor, capital project planning
Environmental
Expanded habitat, additional vegetation, heat island reduction, reduced energy consumption, wildlife protection
Environmental damage, habitat loss, contamination, loss of vegetation, impact on wildlife, legal fees, or fines
Social
Improving Level of Service, benefits to community, improvements to public health, increased property values
Decreased Level of Service, inconvenience to customer, legal fees, public recreation impacts, decreased property values, loss of confidence in the system