Hard times hit green practices

Jarrod Haar (left), Juliet Roper and Eva Collins. Photo / Ted Baghurst

Two sets of stories are told about sustainability during an economic downturn; one supportive of the business case and one not.

One version is that sustainability is considered by business as "nice to do" and social and environmental considerations will be jettisoned during difficult financial times.

Another version is that sustainability will be adopted by even more businesses during a recession because, for example, cutting energy use or waste disposal is good for the financial bottom-line.

In a recession businesses need to run a lean, efficient organisation.

In late 2009 and early 2010, a national survey of managing directors in New Zealand was conducted to find out what happened to sustainability practices during the global economic recession.

The survey went to Sustainability Business Network (SBN) members and non-members so comparisons could be made between the two groups.

Out of the 736 respondents, 15 per cent had responded to a similar surveys in 2003 and in 2006. This allowed a tracking of individual companies over a seven-year period.

Before the recession, the national trend was an increase in adoption of sustainability practices by SBN members and non-members.

The results from the 2003 and 2006 surveys showed an overall increase in the number of companies in New Zealand adopting environmental practices and social practices.

In 2010, members and non-members are moving in opposite directions.

The impact of the recession has been that the non-SBN companies surveyed have reduced most environmental practices, while the SBN companies showed an increase in uptake of most environmental practices.

The recession's biggest impact was on social sustainability practices. These include initiatives such as family-friendly policies for workers, or contributing to the local community.

SBN members decreased these practices by an average of 5 per cent, while non-SBN members decreased these practices by as much as 20 per cent, with some dropping to below 2003 levels.

There are many possible reasons for this, including growth in unemployment levels. Most reasons, however, link back to the recession. Beyond the direct effects of reduced capital the recession has meant a change in managers' values.

The number of managers citing personal values and beliefs as a positive influence in adopting social practices declined from a high of 46 per cent in 2006 to 29 per cent in 2010.

Comments included statements such as, "we are just trying to survive." It seems when managers are fighting for the survival of their business the values shift from treating their workers and community well to trying to keep the business afloat.

With our economy being so dependent on New Zealand's strong clean, green international brand, the nation, as a whole, stands to suffer from being on the wrong side of the global sustainability divide.

* Eva Collins, Stewart Lawrence, Juliet Roper and Jarrod Haar are with the Waikato Management School at the University of Waikato.