Do well, and do good too

By ESTELLE SARNEY

You're a busy manager with the bottom line foremost in your mind, when someone asks what the term "business ethics" means to you.

If your first response is "Who cares?", you could be bypassing a course of action that advocates say improves profitability as well as makes you and your colleagues feel a whole lot better about going to work.

For example, who would have thought a paper mill would be judged the most ethical company in New Zealand?

Yet last month Norske Skog Tasman won the Brookfields Business Ethics Award at the Deloitte/Management magazine Top 200 Awards for taking steps it assessed as simply good business.

They happened to be ethical as well - aiming for a "triple bottom line" of financial, social and environmental performance.

Over the past eight years the mill's on-site learning centre, Te Whare Ako, has developed from teaching basic literacy skills to helping employees cope with a raft of changes on site, including introducing computers.

"In 1994 we realised that people we had recruited from one generation did not have the skills to perform in the new era," says mill manager Peter Chrisp. " Our challenge was to get them back into learning, and learning how to learn."

The company asked the Workbase centre for workplace literacy and language to help design a service that treated adult students with dignity and respect.

Te Whare Ako was set up on site so employees could easily access it. They can now study for nationally-recognised qualifications for free.

"There were strong commercial reasons for doing it," says Chrisp.

"It helped reduce the fear of a new age, and people's fear of learning was an inhibitor of change.

"At the same time we were aware of the spin-off effects in the community.

"I remember one guy who started out unable to read or write. He went through a programme over a couple of years and came out able to read graphs and make a much better contribution to the workplace.

"He also said he had read a story to his daughter for the first time."

It is this kind of "double bottom line approach" - or triple once the environment is added - that justifies taking the time and trouble to make your business more ethical.

So says Dr Rodger Spiller, executive director of the Centre for Business Ethics and Sustainable Development, one of the awards' two judges.

"There are a lot of relatively simple things that companies can do that yield rapid results, and organisations that will come in and help," says Spiller.

"Waste Not will show you how to minimise and recycle your waste, United Way will facilitate employee volunteer work, and the Energy Efficiency and Conservation Authority [EECA] will show you how to reduce your energy consumption.

"The Warehouse won an EECA award in 2001 for controlling the amount of electricity used by its stores, to the extent that it saved the company $3 million a year."

Subtle gains include attracting and keeping quality staff who want to work for, and new customers who want to buy from, a company seen as more ethical than its competitors.

This has worked for clothing company Untouched World, joint runner-up in the awards, which markets itself as producing clothes in an environmentally sensitive way.

It seeks to minimise the use of man-made fibres, toxic chemicals, waste materials and emissions, energy, packaging, transportation and adverse impacts on biodiversity.

Part of its profits run the Untouched World Foundation, which, among other things, is helping to rid Blue Mine Island in the Marlborough Sounds of feral plants and animals.

It exports to nine countries and former US President Bill Clinton was famously photographed shopping at its Auckland store during his last visit.

Founder and CEO Peri Drysdale had earlier designed the polo shirt that went to all Apec leaders who were in New Zealand in 1999.

"We're tapping into a market that's interested in sustainable values," says Drysdale, who was named 2002 Business Woman of the Year by Her Business magazine.

"The added value our customers get is knowing that the dollar they spend is having multiple benefits down the line."

Getting your staff on board not only propels your ethical ambitions, but is also great for morale. Transpower, the other runner-up, has run a community relations programmehe for the past three years.

One of its features is an annual volunteer day staff can use individually or as a group.

"Recently we had a group of 12 people go and build paths and clear scrub for a wildlife sanctuary," says communications manager Wayne Eagleson.

"It becomes a team-building exercise which doesn't cost the company anything, while at the same time building relationships with the community in which we operate."

Transpower has 13,000km of lines to maintain and upgrade, so forming good relationships with stakeholders such as farmers and environmental groups is crucial.

Donations to groups such as the Landcare Trust and sponsoring seminars at the Mystery Creek Fieldays have improved communication and co-operation.

"Environment Court delays, resource and planning consent objections ... they're expensive and have the ability to compromise the reliability of the power system over time," says Eagleson.

Small business is not exempt from the demands of an increasingly ethical environment, says Spiller. They are suppliers to big companies, and if big companies are taking an ethical approach, they want to know the goods and services they buy are also produced ethically.

There are a range of ways companies can show they are ethical:

* By advertising it on packaging, websites and through marketing.

* Involving employees, who spread the word inside and outside the company.

* Surveying how stakeholders see how your company is doing, then producing a report each year, in the same way as a financial report. People know you treasure what you measure.

* Offer incentives to managers to reach ethical targets, such as waste reduction. They let it be known what you're trying to achieve.

Use a triple bottom line as a management tool to improve your business, says Spiller.

"Of 50 academic studies I've looked at worldwide, 33 showed a positive relationship between ethics and financial performance. Thirteen were neutral and only four showed a negative relationship. It is possible to do well by doing good."