KEY POINTS:
Making a commitment to greening your business can have positive benefits for company performance - and it doesn't require installing a composting toilet or a worm farm in the staff room.
New research from the University of Waikato Management School shows companies which adopt a "bundle" of common
environmental practices show significant improvement in their marketing and development performance.
The study measured a company's commitment to environmental practices and found those making the greatest commitment made the biggest gains, said Dr Jarrod Haar of the Department of Strategy and Human Resource Management.
Haar and colleague Dr Eva Collins analysed the performance of 95 medium to large New Zealand companies against three measures - capturing greater market share, development of new products and innovations, and financial bottom line.
Surveyed companies that put all six practices together found they accounted for 6 per cent of both market and development performance, but only 1 per cent of financial gains, said Haar.
"However, I would argue that probably over time you would develop more innovative products, gain greater market share and those two things are related to financial performance," said Haar. "So maybe there's future gains."
Haar said although the survey found 10 per cent of firms were using all six environmental practices, more than a third of New Zealand firms were "not doing a heck of a lot".
"The reality is they need to make a greater commitment towards it. I guess the interesting thing there is while they umm and argh and go 'well, I wonder if I should?', 10 per cent, the top performers, are truly out-performing them and I guess in some respects if you wait too long your competitors might have gone - or you may have gone!"
THE SURVEY:
Companies participating in the survey were asked to indicate the extent to which they engaged in six activities relating to the environment.
For each activity companies ranked participation - 1 = no involvement, 3 = some involvement, through to 5 = full involvement (money, time, resources).
Six Environmental Practices:
- Has an environment-focused supplier program, for example, suppliers use renewable resources.
- Has environmental management systems, for example, a manufacturing firm that manages production with an environmental focus or a more "paper-based" business running a recycling programme.
- Marketing/image based on environmental claims.
- Is a member of an environmental group or network, either a NZ or International environmental group.
- Provides employee training on waste reduction.
- Provides employee training on firm's environmental goals.
- NZ HERALD STAFF