People, planet, profits. This is the catch-cry of sustainable business—the new triple bottom line. Gone are the days when businesses could just care about balancing profits and losses—the new normal means businesses now have a mandate to care for the environment and society at large—the borrowed phrase “first, do no harm” now seems applicable. It’s an admirable standard. Surely today we can hold businesses to account and demand that they care. Surely we can expect businesses to do better than they have in the past.
That said, I am faced with my own conundrum when nature, quite literally, comes to call. My two-year old needs toilet training fast and, a mad dash to my local discount retailer later, I find myself the slightly ashamed owner of a rather ugly, very cheap plastic toilet step and potty-training insert.
I’m ashamed because I know I have just bought the step as a stopgap. I plan to replace it in a few weeks for something a bit more long lasting, made from better materials, and definitely more attractive. At only $5 it was an easy decision—I knew my bank account wouldn’t feel the pinch—but now, a short way through an article on sustainability, I do feel a bit guilty.
I’m torn. Do I dump and replace? No one will notice my solitary ugly, green stool amongst the acres of refuse at the city dump, I think. Or do I keep it; its ugly green hide a constant reminder to make better purchasing decisions in the future.
It’s in my purchase of this eyesore that I can see the heart of the consumer problem, the almost unmanageable challenge we set for businesses today. Our insatiable demand for low-cost goods combined with a moral call that “they” (those “faceless corporations”) care for people and planet.
CEO Mark Powell is a man well versed with the complexities of this challenge. He helms The Warehouse Group, a Retail Group that includes The Warehouse, Warehouse Stationery, Noel Leeming, and Torpedo7. He wrestles daily with both the commitment to provide low-cost consumer goods and the vision to become a 100-year company that helps New Zealand flourish. A true challenge to balance profit, people, and planet.
“Business is often caricatured in today’s media,” says Mark. “Most of the business leaders I know are not capricious capitalists; they do care passionately about society.”
Despite this, managing profits and losses alongside the call to compassionate care of people and the environment is a tall order. There is a fine balance and it’s evident after a few moments conversation with Mark that big business does not have a cut and dried solution; there are indeed no easy answers, particularly for businesses competing in the market of low-cost consumer goods. Challenges range from balancing the triple bottom line, avoiding bankruptcy while fulfilling moral and ethical obligations, through to bigger questions like: “What exactly is the greater good? What does real sustainability look like?”
Take ethical product sourcing for example. A seemingly easy, yet extreme response to continued reports of sweatshop labour, would be to close the doors of the West and shut down free trade, a response that Mark finds simplistic and unhelpful.
“Building a wall around the West is not a solution,” he says.
His defense that global trade actually contributes over time to raised incomes and better quality of life—doing more for poverty in developing countries than any aid organisation could do—feels like sound logic; the burgeoning middle classes of China and India living proof. But should that “greater good” override our concern around the reports of unethical labour, child workers, and terrible working conditions we see coming from many manufacturing nations?
“There are undoubtedly abuses. You can’t be naïve in this space, but the general improvements happening are huge,” Mark responds. “An important part of what makes market-led economies work is the democracy and questioning that puts pressure on people in power and asks: ‘Is wealth being shared? Is trickle down happening?’ Because of that, major companies like ourselves feel the social pressure to have good, ethical sourcing policies in place, because if you don’t, you will get caught out. Consumer-led pressure, societal-pressure, that’s what drives change.”
Mark holds a similar view on the “Made in NZ” movement. Consumer-led pressure for locally sourced products is, he says “good.” But he doesn’t believe it should turn into a “Protect NZ” movement.
“As soon as we do this,” he says, “you undermine creativity and fossilise a society…free trade puts a great creative pressure on New Zealand manufacturers and helps our country to move forward.”
This “vote-with-your-feet” philosophy does sit a little bit uncomfortably with me. It places great onus on the individual, and I’m not sure I trust myself to make the “right” choice, especially in light of my recent foray into the world of garish toilet steps. Surely, I ask, there must be room for some regulation, some government intervention, some limits to consumer choice, and some guidance for corporate responsibility?
Mark does believe there is a place for government intervention. Just not overregulation. He believes the State’s role, worldwide, not just here at home is to ensure that base levels of protection are in place, a responsibility he extends also to the governments of developing countries. These include health and safety standards and a minimum wage, but should not, for example, extend to the legislation of the so called “Living Wage”.
This strikes me as slightly ironic. The Warehouse Group has implemented an initiative called the “Career Retailer Wage,” which has raised the wages of qualifying long term front-line staff by anywhere between $50 to $100 a week, seemingly in response to the challenge of the Living Wage.
While the initial dollar figure of the Living Wage movement was a useful benchmark for the Career Retailer Wage, Mark says the similarities end there. Unlike the Living Wage concept, the Career Retailer Wage is not a minimum for all employees, it is essentially there to support those who are committed to turning retail into a career.
Mark believes that the question the Living Wage movement is asking is very valid: “Long-term employees in many industries—how much are they being paid?” Living, he believes, should be sustainable for these individuals, but legislating a blanket Living Wage? That’s a whole other ball game. The Career Retail Wage initiative costs The Warehouse Group an extra $6 million a year, he tells me, a price they, as a large organisation, are willing and able to bear.
That said, he believes that legislating this would impose an unsustainable burden on smaller businesses, particularly start-ups, and could be crippling. “They just can’t afford that,” he says, “but they should pay at least minimum wage. And it [wages] should be progressive.”
Herein lies an additional challenge. What choice do you make when the cost of a decision could mean a foreclosure sign on your door? There are no comfortable answers to that question, and Mark would caution that demanding businesses adhere to a so-called “obvious” ethical, moral line beyond what is legislated may in fact do more harm than good.
“Crippling businesses, particularly start-ups and entrepreneurial ventures,” he says, “will cripple creativity and ultimately cripple society.” The discussion around this challenge really hits home for The Warehouse Group when the subject turns to the end life of products.
“This is an issue we care greatly about,” Mark says, “but recycling and take-back programmes are just not sustainable on an economic basis for a single company to do on their own. There is a lot that we do recycle already, but the options on offer are not as stable or as strong as you would hope.”
Rather than dismissing the issue, The Warehouse Group has spent years lobbying the government for a charge on goods that would fund an industry-wide solution. “We haven’t seen heaps of action on this though,” comments Mark, “There is stuff happening but not as quickly as we would like.” Again, there is the tightrope. The ethical choice is to care, to respond, and ultimately to deliver, but again the question remains: “should business sustainability come at the cost of sustaining the business?”
There is no easy answer. Mark’s favourite saying is: “Flourishing society needs flourishing businesses and flourishing businesses need flourishing societies.” It strikes me that this relationship between business and society may, in fact, be a symbiotic one.
Perhaps, like all good relationships, there is no one size fits all handbook for decision-making. Sure, there may be some clear moral and ethical boundaries, there may be some guidelines for good behaviour, but there is also a lot of grey. Like all relationships, there are times when one party may temporarily miss out while the other gains, but overall there is a commitment to a common good. And this is a long-term game.
It strikes me that there is a similarity between my poor choice of a stopgap toilet step and the larger choices that need to be made around business sustainability. While my choice was a simple, albeit foolish one, and sustainable choices are more complex, they do both need a long-term view. Stopgaps, easy answers, and quick fixes may in fact end up doing much more damage in the long run.
Am I prepared to pay more for goods that benefit others, goods that have been produced with minimal harm to the planet? Am I prepared to have less in order for others to have more? I wish I could answer with a resounding “Yes,” but, in truth, this challenge leaves me uncomfortable, I am uncertain of my own resolve. For now though, at the least, I commit to keeping my garish, green toilet step—a domestic eyesore serving as a reminder that my decisions matter, that they impact others; and the cost for them is much more than just décor.