By Celsias Team
Posted on Aug. 31, 2010. Listed in:
The economic downturn has created a growing sustainability divide, separating New Zealand businesses which “get” sustainability from those which see it as “nice to do”. That’s the key finding from a new survey on business sustainability practices conducted by researchers at the University of Waikato Management School. Although whether “nice to do” remains an option heading into the future is another matter entirely.
The survey of more than 700 firms is the third in a series, with previous surveys conducted in 2003 and 2006. These earlier survey’s showed increasing uptake of sustainability practices, but the 2010 survey reveals a general decline — particularly among small businesses which make up the overwhelming majority of New Zealand firms.
“Firm size was one of the best predictors of uptake of environmental practices,” says Dr Eva Collins, who co-wrote the report “Business Sustainability Practices During The Recession: The Growing Sustainability Divide” with colleagues Professor Stewart Lawrence, Professor Juliet Roper and Associate Professor Jarrod Haar.
“In a recession, small businesses are hardest hit by the upfront costs of sustainability practices, and our survey shows they cut back the most.”
However, a small but significant group of firms have actually increased their uptake of environmental sustainability practices, such as recycling, reducing energy and water use, and environmental awareness.
“The recession shook out firms which had sustainability as an ‘add-on’,” says Collins. “For those firms, sustainability wasn’t aligned with their core business, so when things got tough they let it go.”
Collins says the major concern is that New Zealand could risk losing its competitive edge by being on the wrong side of the global sustainable divide.
“We're increasingly marketing our products and services on a clean, green ticket, but the majority of firms are actually reducing uptake of sustainability practices. So while we recognise the market advantages of sustainability, it's not supported by substance.”
The 2010 survey reveals that social sustainability practices have taken the biggest hit in the recession, with most falling below 2003 levels.
“Comments written on the survey included statements like ‘We are just trying to survive’,” says Dr Collins. “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.”
Correspond these findings with the recent Fairfax Media-Shape NZ survey, which found that 75 percent of business decision makers think companies should balance making a profit with contributing to the broader public good, and you have quite the dichotomy.
The Waikato University survey also proves interesting when compared with a global survey completed earlier this year by the United Nations Global Compact and Accenture. In the survey, 766 of the world’s top chief executives were probed and key findings from the resulting report show that within a decade, a tipping point could be reached that fully integrates sustainability with core business – its capabilities, processes and systems, and throughout global supply chains and subsidiaries.
In fact, 80 percent of the chief executives surveyed say last years economic downturn has raised the importance of sustainability in their business. In a similar survey conducted in 2007, 50 percent of the chief executive respondents said that sustainability issues had become part of their company’s strategy and operation. That number jumped to 81 percent in the 2010 survey.
Indeed the belief by some that sustainability practices actually save businesses money in the long-run adds another dimension to sustainability simply being seen as a “nice to do”. Mike Pratt, professor at Waikato University’s Management School, made these key points when he recently appeared on NZI Business:
- Sustainability provides a lens in which you can discover lessons for value creation (through doing things more economically, avoiding risk for example).
- Attracting and retaining top talent by creating a business environment where people feel great about the business that they are working for because of what it stands for and what it’s aiming to achieve.
- Sustainability can strengthen the brand identity in the minds of consumers.
So while the survey shows a separation between New Zealand businesses which “get” sustainability from those which see it as “nice to do”, sustainability is likely to become a “must do”.
Image: Flickr - HikingArtist.com
