Managing Sustainably: Shocking times, great opportunities

The best of business came out at the worst of times. As Canterbury and the country shook off the shock of the $16 billion February 22 earthquake, business immediately showed the vital role it can play in society, and society for business.
Companies donated millions of dollars, trucked in water, and worked around the clock to secure power and water supplies, restore services, and re-establish supermarket and fuel supply lines. They trucked hundreds of thousands of tonnes of rubble and sand to landfill. They took care of the sick and accommodated those displaced in city which may lose 10,000 of 190,000 damaged homes. To keep staff in work some firms relocated them to centres as far north as Auckland.
The not-for-profit sector helped thousands to cope and is passing out millions of dollars in donations and other services, caring for both body and soul.
Meantime, the Government, by week two, was topping up salaries for more than 6500 firms to keep alive the vital connection between employers and employees.
These extreme circumstances gave us stunning view of how central and local government, the community and business can work together.
Some would argue they must work together: that here is massive potential in having the three sectors work together to overcome, and prevent, the suffering and costs that stem from social failure.
Recently, the New Zealand Business Council for Sustainable Development published three reports arising from its two-year research project into the social role of business.
Since then the Minister for Social Development Paula Bennett has agreed with one of its main findings: there can be better way to ensure business plays greater role in setting social investment priorities, and to coordinate the efforts of Government, business and the not-for-profit sectors.
As the reports said, the cost to taxpayers of single chronic adolescent male is $3 million over his working life.
As the minister told Business Council members at March breakfast, about 12,000 of the 65,000 five year-olds who went excitedly to their first day at school this year will emerge, still illiterate, as teenagers.
The cost of poverty and deprivation is high: the Government is spending about 75 percent of its $43 billion year in social sector spending on “social protection”, providing income support and services for those unable to look after themselves.
The number of people of working age on benefit has risen from two percent in 1960 to 13 percent in 2010. New Zealand ranks 29th of 30 OECD countries for youth unemployment and almost 30 percent of the jobless here are aged 15 to 19, compared with 12 percent in OECD countries. Yet people moving from benefits to work enjoy real earnings growth over time.
New Zealand ranks bottom in the OECD on child poverty.
While New Zealanders’ health and life expectancy are good, males in the least deprived areas could expect to live 8.9 years longer than those in the most deprived areas and the single most important determinant of health is income. child growing up in poverty is three times more likely to get sick.
It would be far better that some of this spending goes to “social investment” to tackle these issues and that way is found to allow more businesses to, as the minister says, “do no harm, do good and take part in society”.
While firms might be uneasy about getting directly involved in helping organisations deal with tough social issues like child abuse and family violence, clearing house service which allowed them and their staff to be more hands-on in providing time, skills and management experience might be worth considering.
So the Business Council has secured funding from the Tindall Foundation which will now be used to scope what form such coordinating service or organisation might take. Paula Bennett says she doesn’t think the Government should run it or legislate for it. That would send the wrong signals.
But join it, support it and work with it? She says yes.
We may indeed unleash the power of business to do even more good in our society. M

Peter Neilson is chief executive of the New Zealand Business Council for Sustainable Development.

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