Triple bottom line to the fore

By COLIN JAMES

When a beery blokey icon company like DB Breweries takes an interest, maybe "sustainable development" and "triple bottom line" are edging into the mainstream.

DB had human resources general manager Mark Campbell at the NZ Sustainable Business Conference last week. Campbell is in charge of developing a triple bottom line report over the next year. That suggests the practice is no longer the preserve of those who have had damascene conversions - champion Stephen Tindall of The Warehouse read a book - or are eco-enthusiasts who set up sustainable businesses - Rob Fenwick with Living Earth.

Nevertheless, for business ultimately only the financial bottom line counts. Most can't see the point of the demanding extra reporting which triple bottom line requires.

That it is demanding is made clear in a guide-booklet launched at the conference. Not only does a company have to assess and report its impact on and contribution to the environment and the society. Even the financial report must take into account the wider economic impact.

Moreover, reporting must be open, warts and all. Trying to do the right thing might lay a company open to attack from environmentalists and social activists.

For example, the social dimension is not just making a donation or two. Consumers sense that, as Anthony Lupi of Positive Outcomes told the conference. He said there must be an "elegant synergy" with some activity in the community, involving "employee engagement" which involves "stakeholder engagement".

And once a triple bottom line report is issued a company is hostage to it. Failure to do better each year will be exposed.

"If you go down this route, you will face criticism that you are not going fast enough," Tindall warned.

And that is with only three bottom lines. There is now a movement to add a fourth: cultural.

Prime Minister Helen Clark, a longtime avid supporter of the triple bottom line, was taken with French President Jacques Chirac's "quadruple bottom line" reference at the Johannesburg summit in September.

In New Zealand "cultural" implies something much more than in France, which has a dominant national culture, developed over centuries. Bicultural New Zealand, with its Treaty of Waitangi, potentially makes quadruple bottom line reporting extremely complex.

Whose cultures are being reported on? And how are the impacts to be assessed?

And it cuts both ways. Tahu Potiki, chief executive of Te Runanga o Ngai Tahu, told the conference Maori must give up walking down the "flaxroots memory lane" and become "stakeholders in the international economy".

Then there are the arguments about what "sustainable development" is. Sure, do your triple bottom line. Then find greenies attacking you for subscribing to only a "weak" version of sustainability.

According to a report in 2000 by Dorothy Wilson and Catherine Syme of the Pacific Rim Institute of Sustainable Management and Stephen Knight, "weak" sustainability is just the rather small point where ecology, economy and society intersect.

"Strong" sustainability makes the economy a subsidiary of society and both subsidiaries of ecology: the planet rules. Jeanette Fitzsimons, Greens co-leader, who in the last parliamentary term extracted money from the Government in Budgets, some of which paid for the guide-booklet, subscribes to that version.

Maybe DB will one day. More likely it and other companies will go at most for the intersection model. The point for business is not subscribing to a green world view. The point remains making a profit.

The argument run again and again at the conference is that without a healthy planet and society, profits will eventually fail. But that does not account for the short term.

In the short term there can be gains for those who are in early. The Warehouse share price lifted 5 per cent when it was listed on the British green index. Eric Barratt of Sanfords, who drove the sustainability certification of the hoki fisher, is getting higher prices for hoki as a result.

And several participants reported that they have a more committed staff and better relations with the community since going triple bottom line. There are spinoffs in lower staff turnover, better work practices and sometimes sales.

In the longer term there is the threat of Government leverage. Tindall is demanding legislation to back companies' efforts. In fact there are indications from well-placed sources that the Government may emulate Tindall's practice and introduce a preference in buying products from triple-bottom-line companies.

In Australia a requirement is soon to come into force for a weak version of triple bottom line reporting to be included in annual reports. There are "rumours" of such a requirement here, too, Tower Asset Management business development manager Mel Hewitson, told a workshop.

Whatever, the message from Barry Carbon, the ebullient new Australian head of the Ministry for the Environment, was very upbeat: "I am totally confident that we will see an explosion of triple-bottom-line reports."

* The conference was organised by the Auckland Environmental Business Network and hosted by them along with the NZ Business Council, NZ Businesses for Social Responsibility and NZ Centre for Business Ethics.

Further reading
nzherald.co.nz/environment