Strategy for a triple-bottom-line currency


Understanding that negative externalities from today’s business practices have erosive effects on our communities, our health and our environment, people have proposed Triple-Bottom-Line (TBL) accounting to help keep these externalities in check. However, there is an inherent conflict of interest about the accuracy of metrics that arises from attempting to locate the feedback loops INSIDE a business for consequences EXTERNAL to the operations of the business (which is why they’re called externalities in the first place).

The only way to ensure the integrity of the additional bottom-lines is to get that feedback from OUTSIDE the business. If you want to know the company’s impact on people, ask the people in its community. If you need to determine their impact on the environment, measure their impact on the environment according to the continually evolving best practices of groups committed to caring for the environment. TBL accounting is also tends to exclude small business because it forces businesses to internalize complexities beyond the grasp of most entrepreneurs struggling to manage the accounting, tax and legal processes involved in just one bottom line.

If we build these additional feedback loops into the cost of money for a business, then they quickly have financial reasons to reverse negative externalities and actually create positive ones.

How a TBL Currency Works

First, let’s consider a perspective on how dollars currently work. US Dollars are an exchange currency which operates in parallel with a reputation currency called a Credit Rating. Your Credit Rating determines your cost and availability of money. It determines whether you can borrow dollars, your interest rates, origination fees, transaction fees, and credit limits.

For our local business network in Denver, we are building a variation on this theme which uses THREE ratings (correlated to the three bottom-lines) to establish your cost of money instead of only the traditional ONE. The People Rating of a business determines the interest and demurrage rates that a business receives on negative and positive balances. The Planet Rating determines transaction fees. Credit limits (availability of borrowing funds) are still tied to more traditional financial performance (like a normal Credit Rating). However, special loans in our currency may also be available from community-directed funds for businesses which are filling desired niches but have not yet established a strong financial history.

A few weeks ago, we launched the first phase involved in building toward our TBL currency: a comprehensive business directory which collects information and feedback about the socially-responsible and environmentally-sustainable practices of local businesses ( Our directory has over 400,000 locally-owned Colorado businesses, but so far only has business practice data for a few dozen of these businesses. Reviews and ratings (which comprise the People Rating) can be posted by anyone in the community (customers, owners, employees, neighbors, vendors, contractors, investors, etc.). At this stage, environmental information is reported by the businesses themselves, but we are working toward relationships with environmental watchdog groups to be able to provide independent assessments (which will comprise the Planet Rating).

Currency Mistakes to Avoid

Learning from Successes and Failures

Mutual-credit (“complementary”) currencies have failed to gain significant market penetration and useful trading volumes. Some have compared this to commercial barter figures and concluded that brokers (and fees high enough to pay them) are necessary for currency adoption and changing spending behaviors. However, this conclusion rests on the (faulty) assumption that the currency offering was relevant and credible enough to be widely adopted in the first place. Commercial barter exchanges need an aggressive sales force to compete in a highly monopolized market (banker’s dollars control the market of general-purpose exchange). Applying some business sense about markets tells us that is the HARDEST place to compete and to do so you need some significant differentiating factors that don’t require people to be monetary theorists to understand.

Note that brokers aren’t needed for people to use the alternative currencies of frequent flier miles, movie tickets, eBay reputation ratings, bus passes, postage stamps, or to get athletes to compete for Olympic Gold Medals, because these are well-targeted currencies filling different niches and serving a recognizable purpose. Even the best examples of success in complementary currencies are ones that have been well-targeted like Trash Token in Curitiba, or for time-dollars, Chicago Schools peer-tutoring or the D.C Youth Court, not neighborly-exchanges.

Still applying basic marketing principles, we know that positioning a product to “be everything for everyone” is as good as having it be nothing and serve no one. You can’t sell a product without identifying what market you’re serving, who the early adopters are and what message will speak to them. Currency ideologues approach the problem from the “build it and they will come” school of naiveté, failing to target anybody by thinking that a geographic locale defines their target community. They end up in the unfortunate position of competing in the exact same market space with the monopoly of banker’s money and resorting to ideological conversations about why their currency is “better for the community” – obvious and complete disaster.

Imagine reviewing this business plan… EmployComm will go up against the big telecom companies with inferior technology, a weak management team, no business track record, no marketing plan, and an inadequate revenue model. Their only differentiating factor is that this new company is going to be employee-owned so obviously everyone will want to use them instead. How much would you invest? That’s what typical currency projects look like and we act surprised when they fail. Better sales people (brokers) won’t solve their problems for long.

I’ve written elsewhere about the effective currency targeting process, but here’s a short version.

  • Identify Your Community: Geographical boundaries do not a community make. Who are your early adopters and core participants and what message speaks to them?
  • Establish Relevance: In very tangible (not theoretical) terms, solve a visible problem, address a well-known need, or accomplish a burning goal for that community. All participation revolves around this point, NOT around how good your currency design is theoretically.
  • Establish Credibility: Have trusted and well-known entities as the flag-bearers of the project.
  • Integrity of System Design: Only in service to the goals above, be sure you have a solid design to preserve the trust you earn and easy enough usage methods for your audience to adopt.

Leveraging an Effective Adoption Strategy:

Our Triple-Bottom-Line Currency is part of a larger plan for preparing for the impending economic collapse by rebuilding local capacities, strengthening relationships among local businesses and their communities, and establishing new forms of community capital.

Step One – Redefine “Local” and Enable Local Intraprise

We’ve founded the Mile High Business Alliance (a BALLE network focused on local business), published neighborhood walking guides for high-density neighborhoods of local businesses, launched an online business directory, instituted a highly visible five-mountain Localness Rating (to distinguish “local” from “nearby”), published indicators of responsible (or lack thereof ) practices, and introduced technology infrastructure which establishes the baseline data needed for People and Planet ratings. Our new Colorado Local First media campaign promotes this site, and gives people the means to connect with local businesses.

Step Two – Break out of the Banking Box

In conjunction with our Local Flavor Guides we plan to launch Local Flavor Gift Certificates / Cards. We will also expand our business directory to support listing of products and services and establish a shared e-commerce marketplace for goods from local businesses (many local brick & mortar shops don’t have the technical means nor web traffic to justify doing it on their own, but a shared marketplace makes it worthwhile). These two channels introduce shared transaction infrastructure independent of traditional banking channels. We’ll probably also introduce a transaction clearinghouse to optimize cash flow management of receivables with other local businesses.

Step Three – Introduce Local TBL Currency

Harnessing the momentum of the green and sustainability movements, we launch our Triple Bottom Line Currency after we have businesses using our financial tools, and we’ve already been collecting reputation information for the People and Planet ratings. We will introduce business loans and lines of credit as part of our Community Capital program. Depending on dollar volatility at this time, it can initially be tied to the dollar as a valuation reference or it can change to a different value reference at any time.

Our Larger Vision

People are hungry for sustainability approaches which don’t simply vilify business, but create new accountability and better choices. A TBL currency accomplishes both of these ends by making ratings and indicators of business practices transparent and having undesirable behaviors have hard “dollar” costs. One axiom of this approach is that the only kind of business which is accountable is business rooted in a community. This also makes it possible to have a trading network of TBL currencies knowing that everyone is held to account by built-in feedback mechanisms in their own community, and yet enable trade across networks.

Creating a TBL currency allows us to leverage allies from the sustainability movement who would otherwise be ambivalent about a complementary currency: BALLE networks, relocalization networks, IBAs (Independent Business Associations), Slow Food/Slow Money, environmental groups, NPOs in social justice, municipalities, Micro-Business/Micro-Lending organizations, Community Development Corps, progressive Chambers of Commerce, local-focused Foundations, Bioneers, etc.


In Denver, we have just completed step one, but we have a nascent organization still acquiring membership and establishing credibility. This puts a governor on the pace that we can move because we’re still earning the trust required to get launch our own currency. We do have some of the critical partnerships established, but we’re working on others too. It’s probably feasible to launch local gift certificates/cards in conjunction with the Christmas shopping season and the Mayor’s declaration of “Buy Local Week” and Q2-09 before we can launch electronic marketplace tools. Unless things accelerate more rapidly than we’re currently expecting, I think Q1-10 is the soonest it makes sense to launch our TBL currency.

There are other communities that may be able to move faster than Denver, where we may be able to use a different strategy for adoption based on the allies, partnerships, culture and opportunities that exist in that community. For example, I’d bet that the BALLE network in Bellingham, Washington (Sustainable Connections) could implement this on a faster timeline than we could in Denver since they’ve already established mind and market share. I’d be happy to discuss strategies for deploying TBL currencies in 3 to 5 communities within the next 18 months.

Some candidate communities where I’m aware of their readiness and of strategic partnerships:

  • Denver, CO
  • Bellingham, WA
  • Boulder, CO
  • Santa Fe / Taos, NM
  • Burlington, VT
  • Great Barrington, MA
  • Halifax, NS,
  • Ann Arbor, MI
  • Portland, OR
  • Willits, CA
  • Carrboro, NC
  • Gloucester, MA ?? (Cape Anne)
  • Philadelphia, PA ??

Budgetary Considerations:

We can leverage the existing platform I’ve built as an interactive business directory for collecting People and Planet data and for Step One for communities following that trajectory. It is built on open source platforms (PHP/Drupal) and would take minimal customization for each additional installation. $5K to $13K per community? (Many of these communities could/would foot this bill, and are considering doing so now. The prospect of financial support for later phases would only sweeten the deal.)

I don’t know of many other existing tools to help with the later phases. Tools like Cyclos or GETS are on a completely different track and don’t enable almost any of this functionality (like transaction clearing in dollars, or reputation currencies to affect the cost of money). I’m currently developing tools like these as a back-burner project. $60K to $85K.

Each additional community we bring on board will probably need some sort of support budget for marketing their launch as well as staffing to support initial adoption by businesses and data collection. It would take more detailed discussion to get very specific about these figures.