Warehouse grasps the bigger picture

Businessman STEPHEN TINDALL* says environmental and social integration is the key to building sustainable businesses.

To create truly sustainable companies, business leaders need to embrace social and environmental development as well as economic development.

It is my view that a revolution is beginning around the world where businesses are increasingly realising the significant role they need to play in integrating with our environment and our communities.

Companies that practise this and combine it with just as strong a motivation to continue to produce superior profit results achieve better financial performance.

For example, the Dow Jones Sustainability Group Indices, based on research of 3000 multinational companies, showed that sustainability-driven companies outperformed their conventional counterparts by 5 per cent in the second half of the 1990s.

Criteria included high standards of management responsibility and stakeholder relations, along with a commitment to society.

Investors are beginning to realise that companies that embrace this philosophy are producing better-than-average performance results.

In the industry, this approach to business is being commonly referred to as the triple bottomline (economic, social and environmental).

The 36 members of the New Zealand Business Council for Sustainable Development have been asked to report in their annual accounts their triple bottomline achievements, which my company, The Warehouse, attempted to do last year on page 15 of our annual report.

At The Warehouse Group, we are great believers that actions speak louder than words, and I would not have tried to write this piece unless we had made some progress, albeit small, in this area.

In our vision statement we say that at The Warehouse we understand all business activities have an environmental impact.

We believe we can make a difference in safeguarding our environment for present and future generations.

Our long-term economic goal is to conduct our business sustainably. We will do this by focusing on:

* Ourselves, by the development of group policies by training and fostering change.

* Our suppliers, by influencing them to reduce the environmental impacts of their activities and products.

* Our customers, by raising their awareness of relevant issues.

We are serious about our commitment and have no illusions. The journey will be long and difficult. To achieve our vision, we need everyone's help and understanding.

* The Natural Step development in Sweden has been adopted by The Warehouse as a framework for sustainable development. It is based on a few simple yet scientific principles, including reducing dependence on fossil fuels, metals, non-minerals and non-biodegradable substances, as well as reducing the damage to nature and putting people first.

These principles provide the company with a compass to use on its journey towards sustainable development: they have already been used as a basis for a number of projects.

* A social audit is part of the group's effort to become a good corporate citizen. Over the next 12 months we will undertake a social audit in conjunction with Social Audit New Zealand. The company will measure its progress towards important non-financial goals. The results will be published in the next annual report.

* Clean up New Zealand. As a major sponsor of both the 1999 and 2000 Clean Up NZ Campaign, The Warehouse continues to show its commitment to supporting both the people in our local communities as well as the environment in which we live.

In last year's event, which attracted more than 200,000 volunteers, every branch of The Warehouse and Warehouse Stationery had staff working closely with schools, councils and interest groups.

* Zero waste to landfill. Last year The Warehouse made a commitment that all stores would achieve zero waste to landfill by 2020. Eight branches have already achieved this. They no longer even have waste skips on site. As a result, it looks as if the goal will be achieved well ahead of time.

* A timber procurement policy. Another medium-term objective is to develop a policy to buy only sustainably produced indoor and outdoor timber furniture products that meet independent timber certification criteria for high environmental and social standards.

* Environmental Choice New Zealand. This is a label used to identify products made from recycled material. It was launched at The Warehouse in 1999. There are now 30 licensed products in the range, including paints, rubbish bags and check-out bags. Although this is double the number of a year ago, sales response has not been as great as hoped.

* Joint venture with credit-card holders. Over the past three years the company has arranged, in conjunction with its cardholders, Project Kiwi and Trees for Canterbury. Kuaotunu Kiwi Sanctuary on the Coromandel Peninsula has benefited by $80,000 and the native reforestation project in Canterbury has received 17,500 trees.

Our experience at The Warehouse has focused on balancing our five stakeholders: customers, team members, suppliers, shareholders and the community. This forms the basis of putting people first and recognising the part each stakeholder plays in trying to create a sustainable business.

Our experience has been that by trying to treat all our stakeholders with unconditional respect we have set ourselves on a path from which there is no return.

We have discovered that our policies of putting team members first by providing them with monetary performance incentives and shareholding in the company, along with birthdays off on full pay and unlimited sick leave, makes them feel good about the business they work for.

This feel-good attitude enables our team members to put the customers first and to provide exceptional service to them, along with our major driver of giving everyone a bargain.

The company has also spent a great deal of time working with, instead of against, our suppliers. A bi-monthly newsletter, The Warehouse Way, goes to each one to give them feedback about our business. A special team was set up three years ago to help our suppliers to become more efficient in their methods of supplying us.

These benefits are shared by their company and ours and drive down costs to our business and to our customers.

* Shareholders have been well-rewarded, particularly over the past two years with our share price, compared with the NZSE 40, and have also received two special dividends.

* The community is also the focus of our business, with $1.6 million being raised by our team members throughout New Zealand last year to support the communities around our stores. As well, and in conjunction with our suppliers over the past six years, large amounts have been raised at our joint Warehouse/Supplier fundraising event. As a result, Plunket has received more than $300,000 and last year Surf Life Saving NZ received $350,000.

Our company is conducting a joint venture programme with schools to see where we can help.

I am exceptionally proud of the 5000-plus team members who make up The Warehouse Group in New Zealand and the way they are embracing our triple bottomline philosophy.

The Warehouse and the other members of the Business for Sustainable Development Council aim to provide business leadership as a catalyst for change towards sustainable development.

* Stephen Tindall is chairman of the New Zealand Business Council for Sustainable Development.