Sustainable Business/Sustainable business practice

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This booklet aims to help you approach the question of how to develop sustainable practices in your business. It focuses on practical steps from understanding sustainability in terms of business, looking at examples and scenarios, defining a set of guiding principles, and applying them into a business plan. We have avoided overly theoretical discussion about sustainability, recognising that it is a young and developing area in its own right, focusing instead on the practical steps a business person can consider and take now.

What is Sustainability?

Sustainability does not have an agreed definition. Specifically when used in business, the term is either:

1. Weak sustainability: an expansion over the financial bottom line where the business considers environmental and social sustainability as well. Many people refer to this as the triple bottom line. Other times, the term is used simply for environmental responsibility.
2. Strong sustainability: a whole new approach to doing business, with every consideration made in the business is to contribute toward a sustainable society.

In general, sustainability means the capacity to endure. However, for the purposes of this book, and the practical considerations of the business planner, we have brought together a set of principles for sustainability. Every time the term sustainability is used in this book, it refers to these principles, NOT simply the capacity to endure. The principles can be applied using the strong or weak models of sustainability.

It should be noted that these principles have been identified solely for the purposes of defining and applying sustainability. They do not necessarily cover all the principles you would be using for planning your business. See the What's important to you for further information about identifying other principles and values for your business.

Some sustainability myths

i) Sustainability is about being an environmental activist or about philanthropy and I can’t afford to give away all the profit of my business

Some businesses have a misconception about what sustainability actually is, if they believe it is about being a staunch environmentalist who gets on their high horse and tells other people how they should live their life; then they are mistaken. Or if the business thinks that sustainability is about philanthropy and they must give away all of their profits in order to be seen as being sustainable, then, once again, they are mistaken. A focus on philanthropy leads to ineffective business programs that fail to achieve very dramatic benefits for the community or the company. The fact is that a company has far greater resources to tap for the sake of social good than its earnings before income tax. Philanthropy can be an effective component of the sustainability puzzle, but it is just one piece.

ii) The sustainable option is going to be more expensive than the alternatives

Some businesses hesitate to consider environmental policies because they assume sustainability is going to cost an arm and a leg and be way more expensive than other options. While this is true in some cases (renewable energy, for example, can sometimes be very pricey), there are plenty of examples where making responsible business decisions can cost little or nothing. In many cases, an initial cost increase is followed by a substantial and ongoing cost saving. The best initiatives to drive employee engagement and happiness don't cost a cent; they're just about treating people differently. The same goes for customer service. Community involvement can often be costless as well. And sometimes, even philanthropy can be free, for example, if you work to encourage and facilitate donations by others (such as, at the point of sale), all of these people focused actions are important considerations of a holistic sustainable business practice. Also, many initiatives can even create savings, such as a reduction in the overall energy and resources that you consume. This can cause you to reduce your expenses. Examples of this include going paperless, finding ways to reduce/ reuse/ recycle materials in operations and production, facilitating green commuting options for your workforce (car-sharing, public transport, telecommuting). Sustainability is ultimately about making more efficient use of resources, and cutting waste not only for the good of the earth and society, but it is good business practice. So, if you are strategic about how you do it, your business can save money.

iii) Sustainability is about re-cycling materials, therefore other than installing recycling bins into our offices, sustainability doesn’t affect my business

Some businesses think that because they are not manufacturing aluminium/ plastic/ steel products (which can be recycled or made from recyclable materials) that sustainability does not affect them. Yes, recycling is part of the sustainability puzzle, but it could be considered as the ‘ambulance at the bottom of the cliff scenario’ (i.e., it is a step too late). There is so much more to sustainability that affects every company. Consider, for example: employee engagement; your suppliers and supply chain; operational efficiency; resource consumption and waste; packaging and facility design; volunteerism? Governance? Ethics codes? Customer service? The list goes on… sustainability is ultimately about ‘adding value’ to your businesses with people, planet and good business decisions in mind.

iv) If we use green-coloured packaging and the words ‘eco’ or ‘organic’ in our product, then we can sell our product as being ‘green’

Do not underestimate your customers’ critical thinking skills and ability to smell “Greenwash”. Just because your new product comes in fancy re-cycled packaging or uses the latest buzzwords, it doesn't make it environmentally or socially responsible and your customers will know this. Expect them to read labels, ask questions about materials and use the Internet to compare your product with competitors. If you don't have anything substantially environmentally or socially responsible to say, don't bother trying to greenwash. (A good example of greenwash could be the latest ‘fad’ of ‘eco’ bottled-water companies!)

v) We are already doing as much as we can in our company, but it is not making a difference to sales

Although your customer can smell greenwash, do not overestimate how much time and energy they have to research and understand your sustainable initiatives. Your customers are not stupid, but they also have lives and they don't have the time and energy to spend hours analyzing your carbon footprint and your products’ lifecycle. If you don’t actively market and thoughtfully explain your company’s legitimate initiatives, then no one is going to know about them. Don’t assume that because your business is adding value, people are just going to naturally find out about it.

vi) Sustainability seems so complex and hard to measure, how can we hope to manage it

There is an old saying in business that goes “You can't manage what you can't measure”, this is correct but measuring sustainability is becoming more and more possible (see section Measuring sustainable business practice). Many businesses, especially smaller companies, overestimate the cost and difficulty involved in measuring their performance. But it's often easier than they think. A few simple processes and habits can routinely provide a great deal of useful information. A lot of the data is already right at their fingertips. So the old saying is correct, collecting this information will help a company to manage its sustainable practice. The real issue, however, is not measurement, but comparability. How do we compare a company that reduces pollution with a company that provides community education opportunities? That issue will never be solved; it is a moral issue that individuals must judge for themselves. But it hardly hinders, and certainly encourages, the measurement and reporting of sustainability performance. Please note: These myth busters are adapted from two Internet sites: www.openforum.com and www.provictus.ca.

Why develop sustainable business practice?

There are two main reasons why businesses adopt sustainable business practice:

1. because the business owner believes it is a responsible and ethical thing to do, or
2. because there is a perceived business advantage.

The New Zealand Business Council for Sustainable Development (NZBCSD) suggests that the following are advantages of applying sustainable business practice:

• Be more efficient and competitive
• Engage in responsible entrepreneurship
• Increase their financial return and reduce risk for shareholders
• Attract and retain employees
• Improve customer sales and loyalty
• Grow supplier commitment
• Strengthen community relations
• Contribute to environmental sustainability

The market

Consider the rapidly growing group of consumers looking to buy sustainable solutions. Many businesses are now looking to see how they can include this group in their target market by providing environmentally or socially superior products to their competitors. This can be seen in almost every industry. For example most banks have been through an advertising campaign in recent years showing how they contribute positively toward the environment or their local community.

This group are changing other consumers behaviors as well - and quickly. Look how rapidly plastic bags have become an optional item, when only recently almost every retail outlet didn't question the use of a plastic bag to package a customer's shopping.

For more information about this trend, look into LOHAS (people wanting to live a life of health and sustainability), or see http://www.moxie.co.nz/_site/insight.php

Stakeholder engagement

The reason this is important to sustainable business practice is that trust, which is a critical element for any business, requires mutual understanding. If your stakeholders understand what you are trying to do and you understand what is important to them, then your ability to ensure both your needs and expectations are met increases. Without this understanding, mistakes can be made which can have negative consequences on the business.

Example: A new printing shop opens in a neighbouring suburb and starts to offer recycled paper as the standard printing paper. They are able to offer their printing at the same price. They are advertising the recycled paper option as a point of difference in their business. Their advertising appears to be working. As the owner of the existing printing shop, you have noticed your sales starting to drop and you are surprised that your customers were interested in using recycled paper. If you had a better understanding of what was important to the local market, you may also have been offering the recycled paper option. For more information about what a stakeholder is, see http://en.wikipedia.org/wiki/Stakeholder_(corporate)

Examples of sustainable business practices

Return to Sender eco coffins

Return to Sender eco-coffins manufactures coffins for the New Zealand funeral industry. In designing the coffins (the product), the owner considered:

• how to minimise materials used (through the use of light materials such as plywood)
• how to minimise toxicity used in the coffins (through the use of natural materials where possible such as sheepskin mattresses, non toxic glue and no metals that could produce toxins when burnt)
• how to minimise waste (considering raw material dimensions in the design of the product such as the size of a sheet of plywood)
• how to offset carbon emissions (through contributing to tree planting schemes)
• how to make it easy for others to make sustainable choices (such as offering a Foundation that accepts bequeaths for social and environmental product design)
• how to ensure as many jobs as possible were created in New Zealand
• how to donate to the local community
• how to influence others (such as through raising awareness in media campaigns about toxins in caskets)

Formway Furniture

The following case study was conducted by the New Zealand Ministry for the Environment.

Formway Furniture represents an important example of how corporate commitment, strategic planning and phased practical implementation can deliver sustainable design solutions in the office furniture sector.

The Wellington-based company – which exports to the world – has been proactively evolving its sustainable design methods for several years and has recently begun a more comprehensive sustainability program.

Formway has come a long way since its modest beginnings as an engineering company making steel furniture for the New Zealand market in the 1950s. Today, it is an international company with over 200 employees, showrooms in Auckland, Wellington, Sydney and Melbourne, and manufacturing plants in both New Zealand and Australia.

All production of goods has an environmental impact and office furniture is no exception. The production process is materials intensive drawing on both natural and synthetic resources from wood-based products and metals through to plastics and textiles. Through the smarter and more responsible specification of all material types, Formway is striving to cut emissions, reduce solid wastes as well as eliminate and/or significantly minimise the presence of potentially hazardous substances in products and processes.

At Formway environmental performance and sustainability are important issues from the top down:

"At Formway we continually look for ways we fulfil our mission to be a leading company in environmental performance. Formway is a design-led company and we firmly believe that excellent design and making sustainable decisions go hand in hand." Alan Buckner – CEO, Formway

In particular, the company has a reputation for innovative, people focused, elegant design solutions. For more than 10 years Formway has enjoyed strong growth in both products and distribution. This has included significant expansion into Australia, vertical development of its distribution channels and entry into new markets through the design and launch of ranges of work stations, high performance seating, and soft seating and storage products.

A five-pronged approach

Formway’s environmental strategy is being implemented in five environmental management programs:

1. Product Design – Eco Innovation. Formway design teams are constantly searching for new materials and technologies to ensure future products are at the leading edge of commercial environmental product design.
2. Supply Chain Management. Formway recognises that its suppliers’ efforts are vital to deliver a sustainable production system, accordingly supplier environmental requirements and continuous improvement actions are part of routine supplier dialog.
3. Operations – Environmental Management Systems. Formway has joined the Landcare Research EnviroSmart scheme to achieve EnviroMark certification for its EMS system.
4. Product Stewardship – End-of-life focus. Formway’s first priority is to ensure its furniture is designed to give many years of service without being made redundant through obsolescence or fashion change. However, work is also ongoing to develop a robust and practical end-of-life management approach that maximises environmental and economic value.
5. Stakeholder Communications. Sustainability communications are undertaken both within the company and with all other environmental stakeholders, particularly architects and designers.

Formway has employed Jake McLaren, a former UK EcoDesign specialist, to develop and implement the new program.

"The first necessity for making ‘green’ products a commercial reality is a real desire and enthusiasm from the management level to make products and services more sustainable. Marketers, designers and engineers need to be encouraged to look for opportunities that add value to a company and benefit the environment simultaneously." Jake McLaren - Environmental Manager, Formway

The programme includes a range of associated measures and services such as:

• evidence for GreenStar tool rating for specific Formway products
• product eco-declarations and third party environmental product certifications
• peer review of Life Cycle Assessment studies completed by a sponsored PhD studentship
• product stewardship services available on request for interested clients and projects.

"Our environmental management program are owned and implemented by teams in design, production, supply chain management and end-of-life. Collectively these people share their environmental learning, develop new tools, techniques and best practice." Keith Hilligan - Chief Financial Officer, Formway

The environmental improvements Formway has made across its major product ranges are mostly available at standard cost not ‘optioned-up’ premium cost add-ons. For example, in Australia, it uses MDF board rated EO for reduced formaldehyde content and sourced from certified sustainable forests in Victoria. This is now the standard material for all Formway workstations in Australia. The Life Chair – exemplary and influential

The Life Chair is one of Formway’s most influential and commercially successful products in recent years. Formway personnel collaborated with Royal Melbourne Institute of Technology and Product Ecology to develop a detailed EcoDesign brief which aimed to eliminate and/or minimise a range of life-cycle environmental impacts. Specific design considerations covered areas such as:

1. environmentally oriented materials selection
2. design to facilitate cleaner production
3. design for durability and extended product life
4. design for reupholstery, refurbishment and reuse
5. design for disassembly and recycling.

The following summary outlines several key Design for Sustainability outcomes related to the Life Chair.

• the Life Chair is designed for reupholstery – the seat and back sub-assemblies and upholstery toppers can both be easily removed and replaced
• the chair contains 30 percent recycled content (combined post-consumer and post-industrial) and is over 90 percent recyclable
• user instructions are integrated into the chair’s physical design ie, under the seat
• the Life Chair is approximately 23 percent and 65 percent lighter than its two main competitors, reflecting advanced material efficiencies and high strength to weight ratios
• it has approximately 18 percent fewer components than its primary competitor
• materials-efficient ‘3D knit-back suspension fabric’ eliminates the need for a ‘materials-intensive’ upholstered foam back or solid plastic frame
• most of the chair’s adhesives have been replaced with snap fits, hinge pins or spring clips
• plastic parts have in-mould labels to help quickly identify material types and enable easier/faster sorting, separation and recycling. No PVC is specified
• the Life Chair is Greenguard certified to verify low off-gassing during use.

Getting the balance right

The ongoing and future challenge for Formway as it bolsters its sustainability program is to get the balance right between qualitative and quantitative aims, objectives and outcomes. In other words, the need to create products and services that are ecologically responsible, economically necessary, socially desirable and culturally acceptable. Getting such a balance right is what makes a company and its products ‘sustainable’ as opposed to merely ‘environmentally-improved ’.

"Our designers are always looking for ways to make environmental product breakthroughs, for example really exciting progress is being made in the development of biopolymers. These materials are getting close to the stage of replacing petrochemical polymers in high performance applications." Bob Stewart – Design Manager, Formway

The journey for Formway is likely to become more interesting and positive over the next few years as major external pressures and drivers demand much higher levels of environmental performance from the commercial furniture sector. Formway sees ahead several specific opportunities that will help focus further attention on sustainable design and ‘greener’ furniture over the next five years, for example the development of the New Zealand Building Council GreenStar Interiors tool and publication of the Environmental Choice New Zealand ecolabel for furniture. Formway has experience working with Australian clients and the existing Australian GreenStar tool, and looks forward to the development of similar tools in New Zealand to assist the local architecture and design community.

There is little doubt that opportunities will continue to emerge, and Formway will continue to use them as a catalyst for innovation and good design, now and into the near future:

"Everything we do at Formway has an environmental consideration, from product design and right through the supply chain. Creating a sustainable future is a key component of our design philosophy and company values." Alan Buckner – CEO, Formway

Formway is grateful for the support of the Foundation for Research Science and Technology, in assisting with the development of the Formway environmental program.

Scenarios of sustainable business practice

A local hairdressing salon is looking for a new accounting firm to prepare their tax return. There are three chartered accountants and the salon has asked each of them to provide:

• A quote for completing the tax return
• A description of how the accountant contributes positively toward the local community and environment, and
• What makes them a good employer

The salon is going to choose their accountant once they have considered their responses to these points.

Making sustainable choices easy

The tile company that supplies many of the plumbers in town is trying to discourage paper use and so is providing an incentive for its customers to receive their accounts electronically. A prompt payment/electronic bill discount is being offered for those customers who both pay on time and opt for their bills to be sent electronically. It also reduces the costs of the tile company by significantly reducing postage and paper use.

The wider community

The local cafe sources local organic produce where possible. However, bananas can't be sourced locally and the cafe has found a company called All Good Bananas that import bananas that have been grown under fair trade conditions, guaranteeing the grower and their family a fair deal.

Managing sustainability risk

A breakfast food manufacturer is wanting to expand its market share with children's cereals. Some of the most popular breakfast cereals in the children's market contain synthetic food colouring. Although it is allowed to be used in food in New Zealand, in other countries it has been banned because of a possible link to cancer. The breakfast food manufacturer has decided to leave out the synthetic colouring and where necessary use natural food colours just in case the link is ever proven.

A plumber's commitment

The new plumber has decided he will not be spending any money on sustainability (environmental or social) initiatives until he is turning over $1100 per week. At that point he has decided to donate half a day per month to the local Woman's Refuge for plumbing related work they need doing. Although this has no cash cost, he has decided to match his time with a $30 donation per month. And when he takes on his first employee, he will double the businesses time and financial commitment.

The impact of this decision on his financial documents, is nil until month 6, when he expects to be at $1100 turnover. At this point $30 per month will be included as donations in his expenses column. As he expects to employ his first plumber during year 2, the $30 will double to $60 at the same time.

Principles for sustainable business

There are two types of principles; operational and strategic. Operational principles are practical – they address the question of what we do and how we do business on a day to day basis. The strategic principles tend to be used as guidance in setting the direction of the business. They will be used to help decide how things are done within the business.

Operational Principles

• Good Employer – the organisation is committed to employee satisfaction, development and well-being. The organisation, from the most senior management level display and model fairness and equity in all aspects of employee relations and show no tolerance for discrimination, bullying or harassment. Workplaces are safe and healthy and employees are encouraged to provide input and participate.

• Environmental responsibility – the organisation is respectful of environmental limits and operates in an environmentally efficient way in the design and delivery of its products/services. For example material/resource use is minimised, products are designed and manufactured considering the full life cycle of the materials and waste products. Environmental technology is invested in and/or used for example using solar panels to generate electricity.

• Community contribution and fairness – the organisation contributes to making the communities in which it operates better places to live and do business (for example, sourcing materials locally) and employees are encouraged to become involved in achieving this goal. Often this will be at a local level, but there may also be opportunities to apply this at the national and/or global level. All employees demonstrate honesty and fairness when dealing with stakeholders. Although not often applicable in small business, where relevant, working in partnership with Maori to empower Maori in decisions that affect them.

• Influencing others – the organisation actively encourages others such as suppliers, customers and its employees to improve their own sustainability performance. For instance making it easy for customers to recycle the product or foreign material manufacturers implement internationally accepted labour standards to ensure forced or child labour is not used in the manufacture of materials or parts.

Strategic Principles

• Integration of sustainability into the organisation – sustainability is a business priority and is reflected in all aspects of the organisation, including business processes (such as decision making, vision, performance management) to ensure that decisions are made with their sustainability effects in mind. There is clear evidence of management commitment to sustainability.

• Minimising risk and maximising opportunity – Addressing risks and uncertainty when making choices and taking a precautionary approach when making decisions that may cause serious or irreversible damage. Applying this principle using the strong sustainability lense would go further to propose that lack of full scientific certainty is not a reason for postponing measures to prevent environmental degradation.

• Transparency and accountability – the organisation is transparent and accountable about its performance in matters that are important to others.

• Meeting tomorrows needs with innovation (Integrated and long term thinking) – Considering the long term (inter generational) implications of all decisions. Seeking solutions that are mutually reinforcing rather than accepting that a gain in one area will necessarily be achieved at the expense of another. For instance recycling waste material, saves dollars by reducing rubbish levies.

Applying principles and practices

As you follow the business plan template included in this book, you will see references to these principles. That is the way sustainability has been integrated into the business plan. In addition, examples are offered as to how the principles could be applied (using the weak model of sustainability unless otherwise stated).

As a small business owner, you may not want to know anything more about how a definition of sustainability has been arrived at. However, for those that are interested, it would be wrong to not point out that there are some strong areas of disagreement about whether approaches to sustainability should be strong or weak. Proponents of weak sustainability tend to argue that strong sustainability is not a practical option - that it would be too hard for an individual business to take a strong approach.

Proponents of strong sustainability argue that taking a weak approach can in fact be detrimental to a sustainable future and that there are some significant conflicts between how we organise ourselves as a society and what is valued vs what is required to have a sustainable future for future generations. For example the conflict between sustainable development and continued economic growth. The basis of this argument is that the ecosystem cannot support continued economic growth with its associated pressures on the natural environment. This position has not been reflected explicitly in the principles, however, is its considered in the strong examples of sustainability.

Integration of sustainability is a principle and is discussed in the principle section above. But it is so important that we thought we would add a little more about it here. If sustainability is a business priority then it is reflected in all aspects of the organisation, to ensure that decisions are made with their sustainability effects in mind.

In addition, there should be clear evidence of management commitment to sustainability.

Below are some prompts to help you check whether sustainability is integrated into your business. Not all of these need to be considered, but as the business grows, this can serve as a reminder for additional processes to consider:

• What norms or policies exist to ensure integration? For instance a volunteering policy (providing employees with a certain amount of time off work to volunteer), environmental policy/goals, fair trade policy etc
• What certification systems are available for your business (such as an environmental management system such as Enviro-mark, an industry specific standard such as Forest Stewardship Council
• What membership organisations are available to join to increase our business' learning and profile in sustainability (eg The Sustainable Business Network, or the New Zealand Business Council for Sustainable Development - see "Further links and resources" section)
• How do your staff know sustainability is important to the business and how are they rewarded for integrating it into their roles?
• What are the sustainability goals of the organisation? Do the stakeholders know what the goals are? Is the actual performance being measured? How does the actual performance compare with the goals and how is the business communicating its performance to its stakeholders?
• How does the business encourage its supply chain (eg suppliers, customers) to make sustainable choices and/or improve their sustainability performance?

Applying strong sustainable business practice

Strong sustainability can best be defined by comparing it to weak (incremental) sustainability. Incremental sustainability is used as an expansion (over the financial bottom line) to the breadth of what business considers important. Sometimes this includes ethical, environmental and community responsibility as well as being a good employer. Other times, it includes just environmental responsibility. Strong sustainability is a whole new approach to doing business, where every consideration is made for the business to contribute toward a sustainable society.

This book is designed as a starting point for any business, to provide a structure and to initiate ideas on a wide range of important issues. What this book hopes to promote is that sustainability is not just about the environment, it is not ‘just’ about anything, but it also doesn’t have to be everything. But the more things it can be for your business, the more parts of your business should experience the benefit of the examination undertaken for that qualification. It is about adding value of the kind your familiar with and value of the kind you are not yet familiar with. Your business can benefit but people are right to be suspicious of those who, without knowing you or your business, presume they know exactly how. Lots of people want to help though, if you’ll give them an opportunity and an open ear. But make it a discerning ear and avoid the extremely negative views of “stop what you are doing you are damaging the planet” and engage those who ask: “what can you do that adds value to your business within our society and our eco-systems?"

Around the world businesses are leading the way in creating positive environmental and social change through their business. InterfaceFLOR company http://www.interfaceflor.com/ is often heralded as being one of those, but with an R&D team of 16 or so people it is not surprising, a better (smaller) example is Patagonia clothing http://www.patagonia.com/international but better still are the two businesses showcased in this book [see above) both of which are New Zealand based. For some businesses it’s easier to know how and when to reconcile these ideas with the value and priority procedures they apply to deciding what is best, for others it is less clear. However for those who see big changes in the future and want to be prepared, then this book and these ideas should prove useful in helping you locate the place for your business in a more sustainable future.

Applying the strong sustainability lens there will also be many new business opportunities. For instance the car share company, Cityhop http://www.cityhop.co.nz/ where cars are parked all over the city and available to be used an hour at a time, or All Good Bananas (http://allgoodbananas.co.nz/), capitalising on consumers desire to purchase ethically - the banana growers receive a fair price for their bananas.

But it is not just whether the business would exist that is of interest to strong sustainability but if it did, how would it operate differently from now? What would your business do differently if its very existence contributed toward a more sustainable future for the planet and future generations?

For more about strong sustainability, refer to Sustainable Aotearoa New Zealand's (SANZ) paper "Strong Sustainability for New Zealand; Principles and Scenarios"[1].

Measuring sustainable business practice

Developing a system of measuring a business' financial results took many many years. The development of a non-financial measurement for sustainability is in its infancy. However, many large organisations (and some small) have been measuring and reporting on their sustainability performance for a number of years now.

The sustainability reporting standard is the [www.globalreporting.org]. It can however, be a little daunting for a new-comer to sustainability. There are some more common areas for measurement included below:

Environmental Results

Reduction in Carbon Emissions: One of the primary effects of companies going green is a reduction in carbon emissions and environmental impact. By adopting sustainable practices, businesses can reduce their carbon footprint and minimize their impact on the environment. This can help protect natural resources, reduce pollution, and combat climate change.

Stakeholders' Relationship: companies that go green can benefit from improved stakeholder relationships. By adopting sustainable practices, businesses can build trust with customers, employees, and investors. This can improve brand reputation, increase customer loyalty, and attract new investors. In addition, employees are often more engaged and motivated when working for companies that prioritize sustainability.

Economic Results

Another significant effect of companies sustainable reporting is the financial benefits. Sustainable business practices can help reduce costs, increase profitability, and attract investors. For example, companies can save money by using renewable energy sources, reducing waste, and improving energy efficiency. These savings can then be reinvested in the business or used to provide value to customers.

Social Results (including ethical and cultural)

• employee time donated to voluntary causes,
• donations and in-kind support to community groups,
• breaches of ethical behaviour,
• breaches of regulatory and/or legal compliance,
• customer labeling,
• customer health and safety,
• stakeholder trust,
• staff perception of the organisation as a good citizen (referring to its environmental and social responsibility and ethical behavior),
• specific engagement with Tangata Whenua about matters of cultural significance to Maori,
• results of initiatives to mitigate negative social impacts
• partnerships within your supply chain that are designed to improve industry environmental and/or social outcomes.

Identifying sustainability impacts

In some businesses, the main sustainability impacts are obvious. For instance, the key impact of a courier driver are carbon emissions from his vehicle and the key impact of a $2 shop would be natural resource use and waste to landfill due to the short life of the products. However, not all businesses have such obvious impacts. To help you work out your key impacts (in order to know where to concentrate your sustainability initiatives), the following prompts may help:

• significance to stakeholders (include representatives of future generations)
• technical information such as environmental reviews, and social impact reports
• Review of current and potential sustainable development issues that are of importance or potential importance to civil society – both from a risk and opportunity perspective. When considering risks, consider changing factors as well as current factors. For instance responses to climate change and accounting for carbon emissions were not considered by many businesses in the recent past. Now many are having to prepare for new taxes and other costs if a carbon based economy develops.
• Review of international good practice and consideration of issues that are being addressed by industry leaders in sustainable development and the organisation’s peers
• Impacts and issues that are identified in standards such as the Global Reporting Initiative, SA8000, UN Global Compact

Background to the principles of sustainability

These principles are an amalgamation of common themes represented in a number of more commonly known and accepted sustainability frameworks (included in the table below).

It could be argued that the summarising of the themes into principles is somewhat arbitrary. That potential criticism is accepted although the best job has been done to accurately capture common themes into a usable framework for small business planning. Given the breadth of frameworks available, some more extreme (either weak or strong) interpretations are not used. However, these frameworks are used where examples are provided of weak and strong applications of the principles of sustainability.

Good employer

Good employer
Framework	Quote
Sustainable Business Network	People are invested in and staff behaviours reinforcing sustainability are supported
NZ principles from the Programme of Action
The UN Global Compact	Principle 6: the elimination of discrimination in respect of employment and occupation.
Ceres
International Chamber of Commerce
Global Reporting Initiative	*Labour/management relations *Occupational health and safety *Training and education *Diversity and equal opportunity *Investment and procurement practices *Non-discrimination *Freedom of association and collective bargaining *Child Labour *Forced and compulsory labour *Security practices
Charter for Sustainable Development (Danish)	Diversity and integration We will ensure diversity in the workplace by attracting, developing and retaining skilled employees, irrespective of gender, ethnicity, age, disability, sexual orientation or religion. Employee involvement We will make sure that the employees are continuously involved in the company’s sustainability activities and that they are trained and motivated to do their job in an environmentally, socially and ethically responsible way
Strong sustainability for New Zealand (SANZ)
The Natural Step
Statistics New Zealand
Good Corporation	The organisation provides clear and fair terms of employment
Permaculture Principles	*People care *Observe and interact *Apply self-regulation and accept feedback *Integrate rather than segregate *Use and value diversity

Environmental responsibility

Environmental responsibility
Framework	Quote
Sustainable Business Network	All resources used by the business have been assessed for their need, are the most sustainable option available, are being used efficiently and where possible are reused or recycled Sustainability is incorporated into the design of products or services, their manufacture or delivery, and the business takes responsibility for the whole of the life cycle
NZ principles from the Programme of Action	Respecting environmental limits, protecting ecosystems and promoting the integrated management of land, water and living resources
The UN Global Compact	Principle 9: encourage the development and diffusion of environmentally friendly technologies
Ceres	*Protection of the biosphere *Sustainable use of natural resources *Reduction and disposal of waste *Energy conservation
International Chamber of Commerce	*Prior assessment (environmental impacts before starting a new activity or project) *Products and services (environmental impact/safety) *Facilities and operations (environmental consideration) *Research (environmental impacts) *Transfer of environmental technology
Global Reporting Initiative	*Materials (weight and recycled material input) *Energy *Water *Biodiversity *Emissions, effluents and waste *Products and services (packaging and impact mitigation) *Compliance *Transport
Charter for Sustainable Development (Danish)	Products and services We will aim for the development, production and the sale of our products and services to take place in a sustainable manner and for products and services to have the least possible effect on the environment. We will ensure that the products and services, which we negotiate, give customers a good chance to select in favour of sustainability. We will incorporate sustainability principles into the company’s investment conduct. Climate change and other global challenges We will aim to have adequate knowledge of the climate and the environmental impact caused by the supply chain and to apply a life-cycle perspective on the improvements which will be implemented. If necessary, we will contribute with technologies, products and services which can reduce the emission of greenhouse gases. And we will seek to ensure that suppliers and customers reduce their emission of greenhouse gases.
Strong sustainability for New Zealand (SANZ)	*Valuing nature intrinsically through knowing that human society and its political economy are integral and interdependent components of nature and the biosphere. Humans have reverence for nature and know that they are responsible for their impact on the integrity of all ecosystems in the biosphere.
The Natural Step	*Eliminate our contribution to the progressive buildup of substances extracted from the Earth's crust (for example, heavy metals and fossil fuels) *Eliminate our contribution to the progressive buildup of chemicals and compounds produced by society (for example, dioxins, PCBs, and DDT ) *Eliminate our contribution to the progressive physical degradation and destruction of nature and natural processes (for example, over harvesting forests and paving over critical wildlife habitat)
Statistics New Zealand	Ecosystems and biodiversity *Environmental limits for hazardous and polluting substances Prevention of non-degradable pollutants *Rate of change *Access to and value of the environment including Maori values
Good Corporation	The organisation protects the environment in terms of its use of resources and minimisation of waste and pollution
Permaculture Principles	*Earth care *Use and value renewable resources and services *Produce no waste *Use small and slow solutions *Creatively use and respond to change

Community contribution

Community contribution
Framework	Quote
Sustainable Business Network	Communities the business is located within or has influence upon are invested in financially and through time and skills
NZ principles from the Programme of Action	Respecting human rights, the rule of law and cultural diversity. Considering the implication of decisions from a global as well as a New Zealand perspective
The UN Global Compact	Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses. Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour;
Ceres	Safe products and services *Environmental restoration
International Chamber of Commerce
Global Reporting Initiative	Community – managing impact *Corruption *Anti-competitive behaviour *Compliance core (fines etc)
Charter for Sustainable Development (Danish)
Strong sustainability for New Zealand (SANZ)	Affirming the deep interdependence of all people. The associated community values include a robust sense of mutual respect, fairness, cooperation, gratitude, compassion, forgiveness, humility, courage, mutual aid, charity, confidence, trust, courtesy, integrity, loyalty, and respectful use of resources. Affirming the value of local community, with associated benefits of reduced environmental footprints and increased cooperation between people.
The Natural Step	Eliminate our contribution to conditions that undermine people’s capacity to meet their basic human needs (for example, unsafe working conditions and not enough pay to live on).
Statistics New Zealand	*Economic activity meets needs of individuals and society (including future generations) *Ensuring one nations are met without compromising the needs of other nations *Living conditions *Equality of opportunity (including to knowledge and skills) and access to resources *Strong governance *International assistance *Culture and identity *Promoting social participation
Good Corporation	The organisation is honest and fair in its relationship with its customers and suppliers and contractors. The organisation contributes to making the communities in which it operates better places to live and do business.
Permaculture Principles	*Fair Share *Observe and interact *Apply self-regulation and accept feedback *Produce no waste *

Influencing others

Influencing others
Framework	Quote
Sustainable Business Network
NZ principles from the Programme of Action
The UN Global Compact	Principle 8: undertake initiatives to promote greater environmental responsibility;
Ceres
International Chamber of Commerce	*Contractors and suppliers (adoption of these principles) *Contributing to the common effort (advocacy) *Employee education
Global Reporting Initiative
Charter for Sustainable Development (Danish)	Suppliers We will encourage our suppliers to aim for sustainable conduct. If necessary, we will demand sustainable conduct. The market We will encourage customers, suppliers and authorities to require sustainability.
Strong sustainability for New Zealand (SANZ)
The Natural Step
Statistics New Zealand
Good Corporation
Permaculture Principles	*People Care *Fair Share *Observe and interact *Apply self-regulation and accept feedback *Integrate rather than segregate *Use edges and value the marginal

Minimising risk and maximising opportunity

Minimising risk and maximising opportunity
Framework	Quote
Sustainable Business Network
NZ principles from the Programme of Action	Addressing risks and uncertainty when making choices and taking a precautionary approach when making decisions that may cause serious or irreversible damage Using the best information available to support decision making
The UN Global Compact	Principle 7: Businesses should support a precautionary approach to environmental challenges
Ceres	Risk reduction
International Chamber of Commerce	*Precautionary approach *Emergency preparedness *Customer advice (safe use, transportation, storage and disposal of products)
Global Reporting Initiative	*Customer health and safety *Product and service labeling
Charter for Sustainable Development (Danish)
Strong sustainability for New Zealand (SANZ)
The Natural Step
Statistics New Zealand	*Ensure protection of population, unique national resources, and plants and animals *Avoiding irreversible adverse effects of human activities on ecosystems and the services they provide *Lack of full scientific certainty is not a reason for postponing measures to prevent environmental degradation
Good Corporation
Permaculture Principles	*Observe and interact *Catch and store energy *Obtain a yield *Apply self-regulation and accept feedback *Use and value renewable resources and services *Produce no waste *Integrate rather than segregate *Use small and slow solutions *Use edges and value the marginal *Creatively use and respond to change

Meeting tomorrows needs with innovation

Meeting tomorrows needs with innovation
Framework	Quote
Sustainable Business Network	The business is profitable and efficient with a long-term horizon; and invests strategically in its sustainable future and innovation.
NZ principles from the Programme of Action	Seeking innovative solutions that are mutually reinforcing, rather than accepting that gain in one area will necessarily be achieved at the expense of another *Considering the long term implication of decisions *Decoupling economic growth from pressures on the environment
The UN Global Compact
Ceres
International Chamber of Commerce
Global Reporting Initiative
Charter for Sustainable Development (Danish)	Ongoing improvements We will continuously improve the company’s sustainability in consideration of technological and financial opportunities, the customers’ and the users’ needs and the expectations of society. Research and development We will contribute to the development of knowledge about sustainability and contribute to research in methods and tools which can promote the development of sustainable products and services.
Strong sustainability for New Zealand (SANZ)	Placing great importance on non-material sources of happiness. Removing the perceived linkage between economic growth, material possessions, and success.
The Natural Step
Statistics New Zealand	Responsible consumption of resources *Using resources efficiently (including through investment in research and development) *Sustainable responses by taking a long term outlook
Good Corporation
Permaculture Principles	*Observe and interact *Catch and store energy *Apply self-regulation and accept feedback *Design from patterns to details *Creatively use and respond to change

Transparency and accountability

Transparency and accountability
Framework	Quote
Sustainable Business Network	Where possible external sustainability / social / environmental accreditation has been achieved to verify business practices and operations Opportunities are taken to publicly communicate sustainability successes and ongoing challenges, increasing transparency and accountability
NZ principles from the Programme of Action
The UN Global Compact	Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
Ceres	*Informing the public *Audits and reports
International Chamber of Commerce	*Openness to concerns *Compliance and reporting
Global Reporting Initiative	Purpose of the GRI is to increase transparency
Charter for Sustainable Development (Danish)	Openness We will assess the company’s impact on society according to sustainability and submit annual reports about the company’s activities, targets and results. We will communicate openly with the employees and other stakeholders about the company’s sustainability. We will ensure that the sustainability inherent in our products and services is visible to our customers and the public. We will take part in the development and communication of credible criteria which make sustainability measurable. Consultation We will instruct and advise customers and users about the application of our products and make sure that they are provided with the necessary information about sustainable use.
Strong sustainability for New Zealand (SANZ)
The Natural Step
Statistics New Zealand
Good Corporation	The organisation is accountable to its shareholders (or equivalent) and communicates to them all matters material to the organisation.
Permaculture Principles	*Observe and interact *Apply self-regulation and accept feedback

Integration of sustainability into the organisation

Integration of sustainability into the organisation
Framework	Quote
Sustainable Business Network	Business leaders are committed to applying sustainability principles. Sustainability is central to the organisation’s vision
NZ principles from the Programme of Action
The UN Global Compact
Ceres	Environmental directors and managers
International Chamber of Commerce	*Corporate priority *Integrated management *Process of improvement
Global Reporting Initiative	Public policy (positions and lobbying)
Charter for Sustainable Development (Danish)	Management priorities We want to make sure that sustainability becomes a key element in the company’s strategic considerations and that related policies and action plans are defined. Uniform principles throughout the company Based on country-specific cultures, we will aim to use the same environmental, social and ethical principles throughout the company, regardless of the geographical location of the country. We regard national legislation and international conventions to be the minimum standards.
Strong sustainability for New Zealand (SANZ)
The Natural Step
Statistics New Zealand
Good Corporation	Management ensures that the organisation conforms to the letter and spirit of this Standard.
Permaculture Principles	*Observe and interact *Apply self-regulation and accept feedback *Integrate rather than segregate

About the framework organisations

Below are the links to the frameworks used to develop the principles, as well as a fuller description of each framework.

The Sustainable Business Network

The Sustainable Business Network (SBN) states that while there is no easy answer to the question, "what does a sustainable business look like?", one suggestion is that it is one which offers products and services that fulfil society's needs while placing an equal emphasis on people, planet and profits.

New Zealand sustainable development programme of action (January 2003)

This is a plan of action developed and undertaken by the New Zealand government in 2003. It was led by Environment Minister of the time, Marian Hobbs.

The Global Compact

The United Nations Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. They are derived from: The Universal Declaration of Human Rights, The International Labour Organization's Declaration on Fundamental Principles and Rights at Work, The Rio Declaration on Environment and Development, and The United Nations Convention Against Corruption.

Ceres

The Ceres Principles are a ten-point code of corporate environmental conduct to be publicly endorsed by companies as an environmental mission statement or ethic. Embedded in that code of conduct was the mandate to report periodically on environmental management structures and results.

The Natural Step

The Natural Step Framework is a methodology for organisational planning. It is based on systems thinking, recognizing that what happens in one part of a system affects every other part. We begin by understanding the broader system within which problems occur and the principles governing success within that system. The Natural Step is based on four systems conditions that have been reworded as sustainability principles

The International Chamber of Commerce (ICC)

The International Chamber of Commerce (ICC) is a non-governmental organization serving world business. Its membership extends to more than 130 countries and includes thousands of business organizations and enterprises with international interests. In response to the World Commission on Environment and Development report, ICC developed a 'Business Charter for Sustainable Development' which sets out 16 principles for environmental management. The Charter covers environmentally relevant aspects of health, safety and product stewardship. Its objective is 'that the widest range of enterprises commit themselves to improving their environmental performance in accordance with the principles, to having in place management practices to effect such improvement, to measuring their progress, and to reporting this progress as appropriate, internally and externally'

The Global Reporting Initiative (GRI)

The Global Reporting Initiative is based on reporting guidelines that provide guidance for organizations to use as the basis for disclosure about their sustainability performance, and also provides stakeholders a universally-applicable, comparable framework in which to understand disclosed information. Below are listed the indicators required to report on. Core Indicators (CORE) have been developed through GRI’s multi-stakeholder processes, which are intended to identify generally applicable Indicators and are assumed to be material for most organizations. An organization should report on Core Indicators unless they are deemed not material on the basis of the GRI Reporting Principles. Additional Indicators (ADD) represent emerging practice or address topics that may be material for some organizations, but are not material for others.

Statistics New Zealand - Measuring New Zealand’s progress using a sustainable development approach (2009)

Presents an overarching view of New Zealand’s environmental, economic, and social progress and whether that progress was consistent with sustainable development. The selected indicators provide information about whether we are meeting our current needs, how our resources are distributed, how efficiently we are using our resources, and what impact our actions may have on the stock of resources that will be available in the future.

Strong Sustainability for New Zealand – Principles and Scenarios (2009), Sustainable Aotearoa New Zealand (SANZ)

The principles included in the SANZ column come from the 2009 report by Sustainable Aotearoa New Zealand (SANZ) which outlines a way forward for a sustainable New Zealand. Although we have referred to them as principles, the report refers to them as the set of societal ethics and values required by those who commit to strong sustainability.

The Charter for Sustainable Business Development (Danish Council for Sustainable Business Development), 2008

The purpose of the Charter is to create a common basis for Danish companies that seek sustainable development for Danish and international societies.

Permaculture Principles

Permaculture is a design system based on ethics and principles which can be used to establish, design, manage and improve all efforts made by individuals, households and communities towards a sustainable future.

Further links and resources

• This business plan has sustainable business practice tips included throughout it. You may also like to use some tools to help. There are literally hundreds of tools available (see http://www.ecosustainable.com.au/links.htm which is a hub of many of these tools).
• For those who want to keep things simple, the tools offered by the Sustainable Business Network (SBN) are a good place to start. The SBN is a membership organisation that exists to assist businesses to integrate sustainable business practice.
• The SBN's main tool is the Get Sustainable Challenge. The assessment looks at your whole business, from strategy and policies to operations and performance monitoring. It produces an Improvement Report helping the business to know where to put its sustainability attention.
• The SBN are also involved in an online assessment tool, Get Sust online. It covers five important areas where businesses can focus to improve their sustainability business performance: 1. Energy 2. Waste 3. Purchasing 4. Transport 5. Healthy workplaces
• The Energy Efficiency and Conservation Authority also provide assistance to businesses wanting to achieve energy savings through their business. EECA Business
• Carbon 4 Good is a CO2 calculator and offset program run through the Sustainable Business Network's Green Fleet program.
• Greenlist is a sustainable products directory that can help you source sustainable products for your business and home
• The [http://www.mfe.govt.nz/issues/sustainable-industry/tools-services/concepts.php New Zealand Ministry for the Environment also provides tools and services to help you with sustainability.
• Some industries have specific sustainability support structures. For instance, the New Zealand wine industry has a specific group working toward sustainable vineyards and businesses in the tourism sector can use the Responsible Tourism Toolikit offered by Qualmark. Google search your industry name and the words sustainable business and see what you can find!
• When defining sustainability, or sustainable development, texts will normally quickly become theoretical. However, for the very practical purposes of this book, we have chosen to keep the definition practical. For those interested in the detail and theory of the definitions, there are many points of reference. Three New Zealand points of reference are:

1. 1. Measuring New Zealand’s Progress Using a Sustainable Development Approach: 2008
   2. New Zealand Sustainable Development Programme of Action (2003)
   3. For those interested in the distinction between the terms sustainability and sustainable development, see Putting the Definition into Practice

• EnviroStep is a free, entry-level environmental management tool for small to medium enterprises (SMEs) in New Zealand. It was developed by the Ministry of Economic Development in collaboration with a number of other contributors
• Documents used in an emerging field known as Financial Permaculture
• Corporate Sustainability Reporting in New Zealand - A research paper looking into triple bottom line accounting vs more holistic business management ideas.
• Video explaining an open economic model.
• The Story of Stuff - a 20-minute, fast-paced, fact-filled look at the underside of our production and consumption patterns.
• Create the Sustainable Business Models of the Future
• Grow me the money