Gill South: Now is not the time for companies to stop walking the walk

Did your company donate something to the local school fair this year - or did you dip out because you didn't feel you could afford it in the current circumstances?

How do company managers keep up all the good things they were doing before the recession now that things are tight? Whether it is continuing to develop and engage staff, operating sustainably, or doing something as simple as donating meat patties for the school fair burger stall, companies should be very careful about going back on their word.

According to research conducted in February by Sustainable Advantage, the pressure is on for management to keep up moves towards taking corporate responsibility for their actions. Among 500 New Zealand consumers aged 18 and over, 80 per cent of respondents agreed that businesses needed to take responsibility for their social and environmental impacts and 71 per cent agreed that they think more highly of businesses that are taking steps to be socially and environmentally sustainable.

"The new agenda on trust now includes how the business is taking responsibility for its role in a healthy society and environment," says Nick Jones, director of Sustainable Advantage, a subsidiary of chartered accountancy practice Hayes Knight which helps corporates with sustainability. "It would be a very brave board or management that walks away from what the business is doing in these areas for a short-term gain in sales or cost savings, as once trust goes out the door, it takes a long long time to get it back."

The research also found that 75 per cent of respondents don't buy from businesses they don't trust and more than half said they had stopped buying from a business they didn't trust in the past six months.

The consultant tells companies that nobody expects them to be perfect. Companies evolve to become more responsible corporate citizens, typically in five stages.

"Consumers recognise businesses are not perfect," he says. Companies should look at collaboration to ease the way, recommends Jones, and not expect to make progress in isolation. Working together with not-for-profits and academic institutions is a good idea, to "pool the thinking and knowledge", he says.

US retail giant Wal-Mart was canny. It hired a sustainability activist to run its sustainability programme and in doing so "saved them hundreds of millions of dollars", says Jones. Businesses should start to see the strategic value of the knowledge in the community sector, he adds.

DairyNZ, the company which represents dairy farmers, has always worked collaboratively to help it do business, says chief executive Tim Mackle. "It's how we work," he says.

He has just completed the strategy for the dairy sector's future, and the key words were "collaborate, sustainability and people", he says.

Working collaboratively is particularly important at times like this, Mackle agrees. As well as working closely with government, and with sheep and beef farmers, he is also working with the Pastoral Greenhouse Gas Research Consortium.

While some companies are cutting back on research at the moment, Mackle says he is not taking his foot off the pedal on this. DairyNZ is taking two main approaches to its research - investing in monitoring tools so dairy farmers can understand what is going on in waterways and with nutrient levels; and investing in mitigation tools and reducing the environmental footprint. It's about best management practice, he says.

DairyNZ has put its money where its mouth is with a high-profile television ad campaign playing at the moment, targeting new farmers and sending messages about its bid for sustainability.

Mackle says that although the campaign was planned in better times, he has no regrets. Recruitment, one of the messages in the ads, remains key and so does sustainability, he says.

"We do obviously want to connect with the people. Good-quality people are going to drive sustainability and productivity. The ads also talk about resources use and efficiencies. Efficiencies will lead to less impact on our footprint and more profitability.

"Recruitment is a long-term issue ensuring that we have got the capability to drive productivity and sustainability for our dairy industry going forward," he says. No sooner do you turn the tap off, than you need to turn it back on again, he adds.

"Our advice to farmers is to think very carefully before they make decisions about people that work for them. It will be your best people who drive productivity."

As for environmental management, it made good economic sense, he says. Fencing off waterways, planting, investing in infrastructure such as bridges over streams - these are all investments DairyNZ is discussing with farmers.

For many businesses, sustainability is about sustaining revenues and financial robustness, says Mark Lowndes, partner at Lowndes Associates, the first law firm in New Zealand to become carboNZero certified two years ago.

Lowndes, who was hoping other firms would ride the wave with him, found that sustainability had dropped down the priority list as the recession has hit.

"It has diminished in terms of allocation," he says. But he argues that it is not at all sensible to let it go because there is a trust issue.

"We became carboNZero because we wanted to demonstrate that it was important. We wanted to show that for SMEs it's doable, it's a shame more people are not doing it," he says.

"Our reasoning at the time was that it's something that helps brand, revenue, and it's good for HR. When applying for jobs, people notice that issue."

The main improvements the law firm has made are in travel, power use and paper. "In a law office it's not massive. It's not as if we are running a fleet of trucks but we're still appreciating it."

Gill South is a freelance business writer based in Auckland