Sustainable development: Hubbard Foods case study

Dick Hubbard's epiphany came at a 1996 Businesses for Social Responsibility Conference in Los Angeles where he heard companies - large and small - talk about benefits.

The Kiwi businessman, who set up Hubbard Foods some years earlier, was frustrated by the existing business model.

"I came back all fired up and immediately went head on with Roger Kerr from the Business Roundtable," recalls Hubbard.

"Roger was arguing very strongly that if the directors and management started going down this social responsibility path to the detriment of shareholders, then that was theft of shareholders' money and should be stamped out immediately".

Hubbard was not deterred. He formed New Zealand Businesses for Social Responsibility (BSR), served as its founding chairman and recruited The Warehouse, 3M, Deloitte Touche Tohmatsu and Ullrich Aluminium.

He would have liked more large companies but the NZ Business Council for Sustainable Development arrived soon after and mopped them up.

The BSR has more than 200 members, mainly small and medium enterprises, and is merging with the Auckland Environmental Business Network.

The ideological arguments are fading but Hubbard's passion for social responsibility is palpable.

"I think at Hubbard Foods it's fair to say we have put a bit more emphasis on the social side rather than environmental. Others are more passionate about that."

Introducing social responsibility concepts into his company was not an easy ride.

There were doubters - even at management level. "I've been surprised by the extent to which our factory frontline staff have taken it on board."

Hubbard Foods has also been active on council projects on climate change and sustainable reporting.

Staff have bought the message that reducing energy costs is about more than the bottom line.

The goal for the next six months is to get a 10 per cent saving from better work practices and 25 per cent in the medium term.

An outside energy waste auditor cost $16,000 but the company is up for Government rebates if it makes the savings.

Innovative ideas are bubbling - not just about ways to save energy but also factory waste: "You get a bit of a buzz going - you get people to have a sense of involvement and doors open."

Hubbard cannot quantify whether the social responsibility measures - scholarships for schoolchildren, 13 places at Outward Bound, and a family-focused workforce - benefit the bottomline.

"I think [so], but it's almost a paradox."

Hubbard Foods' growth trajectory remains "medium profitable".

"I see it partly at the moment as being an insurance policy for us.

"If a crisis hits us with a social responsibility policy in place we are a lot better to weather it."

He cites disruption in 2000 when he locked into a controversial public relations war with striking unionist employees.

"We got hundreds of faxes and emails of support. We could see then that all the goodwill we had generated really came to the fore during an unexpected crisis."

In the end, both sides backed down.

Hubbard had a rethink.

The union's mandate was from those inside the company - not the unemployed.

Independent directors, David Irving (former Heinz-Wattie chief executive) and Paul Brosnahan have been appointed.

Annual turnover is $28 million but Hubbard has no plans to list.

He enjoys the freedom of a private company.

"I can get up and speak and I don't have to worry about the effect on the share price and it does give me a lot of latitude."