SUSTAINABILITY : A Business Responsibility

Earlier this year worker tragically lost both legs in an accident at New Plymouth business involving mechanical shredder. The incident sparked nationwide investigation of similar equipment by the Department of Labour (DoL) which brought its officers in contact with Living Earth’s composting operations in Auckland and Wellington. In revelation that shocked me and our management team, the DoL investigators discovered electrical safety devices on our plant – including on one of our shredders – had been over-ridden.
For Living Earth, which has tried to promote high standards of staff wellbeing as part of sustainable development ethic, the finding was reminder of how vulnerable we are to oversights in process and how disastrous the consequences of this can be.
While DoL chose not to take further enforcement action against Living Earth, it was timely wake-up call to review our overall health and safety policies, our approach to staff and management training and the need for workplace leadership in mentoring individual and co-worker responsibility for workplace safety. It focused my attention on whether the board was adequately governing this critical part of our business.
Staff welfare is key aspect of the social component of corporate responsibility and sustainable development in business: balancing the effects of commercial business on people, resources and the environment.
For some business owners I talk to about sustainable development, the value proposition remains elusive. After all, the simplicity of single focus on shareholder return is very seductive.
Recently the NZ Business Council for Sustainable Development surveyed its members with this value question. Sixty-seven percent of member companies reported enhanced brand value as result of their sustainable business practices. Another major benefit is attracting and retaining staff (reported by 58 percent), major factor as the country experiences low unemployment and skills shortages.
Other benefits include reducing risks (42 percent), reducing costs (42 percent), identifying new business opportunities (50 percent) and enhancing stakeholder relationships (42 percent).
Another survey conducted by the Business Council this year helped illuminate the New Zealand public’s indifference to sustainable development. The nationwide survey showed that most people don’t understand what it means, which should probably come as no surprise as there are so many definitions of the term. However, when New Zealanders are asked about what they value most about living in this country and what their concerns are about its future, their responses are far more revealing.
Three principal concerns of the average New Zealander, according to the survey, are how we are going to sustain our energy and water and what we are going to do about our waste mountain.
Of these issues the reduction of waste is about to become especially topical as new Bill aimed at minimising New Zealand’s waste mountain is to be debated in Parliament. At the heart of the Bill lies waste levy – price mechanism that attempts, on the one hand, to motivate less wasteful behaviour by waste generators (that means you and me) and on the other hand, to establish fund to develop projects to recycle and re-use resources.
The truth of the matter is New Zealand lags behind the western world in the quest to reduce waste. An OECD report of the country’s performance in waste minimisation due to be released shortly is expected to be less than complimentary, particularly over the country’s apparent reluctance to date to use price indicators to influence behaviour. National Waste Strategy, adopted by the Government in 2002 and which sets clear national targets for reducing waste streams to landfill, has been ineffective without empowering legislation or economic teeth.
The Business Council has advocated the use of price indicators as useful tool to influence behaviour and has taken position in support of the levy within the Bill. Whether to minimise production of waste or carbon, or whether to secure water or energy, price indicators when applied universally offer business some investment certainty around cost and supply.
Enclosed in next issue of Management magazine will be copy of the Business Council’s annual report. Its members employ more than 50,000 people and generate more than $40 billion in revenue, equivalent to about 30 percent of our gross domestic product. Membership is growing. The Business Council’s projects also are broadening to reflect wider view of sustainability in New Zealand business context from resource allocation to, importantly, staff welfare.

Rob Fenwick is founding director of Living Earth and outgoing chairman of the NZ Business Council for Sustainable Development.

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