Social, environmental aims pay off

By VICKI JAYNE

Is "doing good" good business or, as international economist David Henderson suggests, a case of "Misguided Virtue?"

In a book of that title recently published by the NZ Business Roundtable, Mr Henderson criticises what he describes as the "false notions of corporate social responsibility" that are gaining currency worldwide.

They are false because, in his view, the notion of sustainable development, let alone the means of achieving it, has been poorly defined and its worth unproven.

The increasing number of companies who choose to chase broader social and economic objectives risk distraction from traditional bottomline preoccupation, damaging enterprise performance and, in the long run, doing more harm than good, Mr Henderson suggests.

The scarier bigger picture involves these do-gooders promoting global standards of corporate behaviour that, in failing to take into account differing local conditions, will hold back developing countries by limiting their job opportunities, he says.

An opposing standpoint articulated by recent New Zealand visitor Naomi Klein suggests that any big-brand company which thinks it is acceptable to have its products made in Third World sweatshops should watch out for a market backlash. If the popularity of her book No Logo is anything to go by, it could be big.

All of which highlights the fact that business does not function in a political or moral vacuum. Behind the day-to-day realities of company operations, one can hear the dull clunk of ideologies clashing as the former white knights of Roundtable tilt at today's whiter knights on the NZ Business Council for Sustainable Development.

The latter's growing membership certainly do not see themselves as misguided in adopting "triple bottomline" - economic, environmental and social - objectives.

Their view is that it is better for business to take a leadership role on social and environmental issues than to hand that responsibility to the Government. Besides, it is proving to be good business sense.

For instance, Auckland firm Urgent Couriers is pioneering a reporting process that encompasses all three objectives and has found it a good structure around which to run a business.

"Far from being a distraction, triple bottomline [TBL] is a serious business reporting model - something you can use to more fully measure the company's performance," says managing director Steve Bonnici.

Urgent Couriers has had an environmental management policy in place for more than three years and uses "Balanced Scorecard" as an internal management tool.

"I find that a useful structure to put around individual performance reviews because it measures such areas as learning and growth, plus external and internal customer satisfaction, which do have social aspects. But the TBL model covers financial, environment and social performance measures."

In the past, determining the company's social commitments has been a rather ad-hoc process, says Mr Bonnici.

"Getting a policy around that in terms of what organisations we like to support and why has been helpful. I don't have to feel mean in rejecting requests that come to me almost weekly from various groups - it sets the parameters of our social commitment."

The company supports Westpac Helicopters (its couriers may need their help one day), the Auckland City Mission (they work in "our backyard"), and Presbyterian Support Service's Friends of the James Family (its life skills programmes help to prevent social problems).

None of this is philanthropy, says Mr Bonnici. The needs of running a successful business must be balanced with those of the community in which its success is based.

"The fact that our contractors are doing things in a more environment-friendly manner is good business for them - they service cars more regularly, use alternative fuels that are cheaper.

"So there is a direct payoff, with the added benefit that we are decreasing our impact on the environment."

Another benefit of a more socially responsible approach shows up in internal satisfaction surveys. The feelgood factor is already helping to retain staff, with "green" and social initiatives earning a top spot in employee feedback.

There are also very pragmatic market considerations - companies may implement buying policies that exclude those which do not have socially responsible policies in place.

"That's starting to happen. While a lot of buying decisions are still made on bottomline considerations, some tenders now have occupational health and safety and environmental requirements.

"So, it's not just a matter of running your business effectively and efficiently - though if you have other TBL measures in place, it boosts efficiency anyway.

"Looking at it as a distraction from the real business of getting on and making cash, I think, is short-sighted. Ultimately you have to take into account what is happening in the wider world."

Business council executive director Rodger Spiller says elevating the debate to an ideological level is a bit of a distraction, although the theory of socially responsible business is well-proven.

"Our view is that corporate social responsibility both increases general welfare and enhances the market economy."

As one instance, the council recently published a booklet outlining "successful business and school partnerships."

While these take several forms, they all basically recognise there is no artificial line segregating business from community.

Today's employees are also parents; today's students are customers as well as being tomorrow's employees.

So it makes sense to find points of mutual benefit and understanding. I will explore a few of those next week.

* vjayne@iconz.co.nz