Just as it is no longer acceptable for a mining company, for example, to come into an area, strip minerals out of the ground and create an unmitigated environmental catastrophe for the local people before moving on to the next mine site, the community also has a say in how much packaging they will accept at the supermarket and how much environmental damage a company creates in the process of getting the food onto their tables, furnishings into their homes and clothes onto their backs.
It is not only the company that is under scrutiny, but the whole supply chain. For organisations that have gone down the sustainability road, all their suppliers need to demonstrate that they are acting responsibly in the 'triple bottom line' sense of the term.
Billabong International provides an interesting example of a company that is meeting the new community expectations for companies to do more than simply make a profit. It is an Australian company with about 1300 employees in countries including Australia, Japan, New Zealand, Hong Kong, the United States, Canada, Brazil, France and Spain.
For a company that makes and sells surf, skate and snowboard clothing and accessories it is only natural that it would link its brand to the environment. The company has done this very successfully, with its dramatic use of surf, snow and athletic imagery that has become synonymous with the Billabong brand.
It is only a short step from there for Billabong to financially support environmental and social initiatives around the world. The company is a sponsor of Surf Aid International, a non-profit organisation whose mission is to improve the health of people in the malaria-prone Mentawai Islands of Indonesia. It also supports the Surfrider Foundation, another non-profit organisation that promotes the conservation and regeneration of foreshores.
Early this year, Billabong contributed $500,000 to assist with the tsunami relief, primarily around Sumatra, an area rich
in surfing heritage. That Billabong undertakes many social and environmental initiatives without a great deal of fanfare is to its credit.
Internally, the company sees the social side of the business as critically important to maintaining the unique Billabong culture, which is based on individuality, teamwork and a challenging of convention. Career advancement is a priority, the benefits being continuity of performance, the retention of proven performers, personal and professional growth amongst employees, a greater pool of candidates for future promotion and a broader skills base of employees. The environmental practices Billabong follows in its workplaces include recycling screen printing ink, recycling 90% of cartons from imported goods and minimising packaging materials for finished goods.
Corporate responsibility for environmental and social performance extends to the supply chain as well, with the company regularly evaluating each supplier and factory site as to physical facilities, environmental management, health, safety, quality performance, employment ethics, working hours and wages. Child labour, forced labour and factories where emergency exits are blocked or locked are not tolerated.
While Billabong has not yet prepared a sustainability report, it is clearly on the path.
One organisation that has recently completed its first sustainability report is Insurance Australia Group (IAG), owner of NRMA Insurance, SGIO, SGIC, CGU and Swann Insurance in Australia and NZI in New Zealand. IAG was awarded 'Best First Time Reporter' by the Association of Chart-ered Certified Accountants (ACCA) at the Sustainability Report Awards in May 2005.
IAG released the report in November 2004 in response to feedback from stake-holders who wanted to see the organisation provide a transparent report on its business operations, beyond simple financial measures.
"The Sustainability Report is important because it looks at IAG's business performance holistically - across economic, social and environmental dimensions," said Lynette Thorstensen, IAG Head of Community & Environment. "It outlines how sustainability is central to the Group's business practices and why IAG believes that conducting business in a sustainable manner will deliver greater business results, community trust and employee satisfaction."
According to Thorstensen, IAG believes that operating sustainably at all levels delivers long-term shareholder value. This involves ensuring excellence in the Group's performance across economic, social and environmental dimensions. "IAG's value, and future sustainability, comes from continuing to deliver on the expectations that both customers and the community have by paying claims, pricing risk, managing costs and helping to reduce risks," she said.
In the last two years, IAG has developed a number of initiatives that are focused on engaging individuals, local community groups and suppliers to reduce risk and decrease its impact on the environment. One of these is Risk Radar, a CD-ROM-driven tool that enables smash repairers to self-assess their businesses against environmental, health and safety standards and develop an action plan to improve the safety and environmental performance, including waste management and greenhouse gas emission reduction, of their workshops.
Other internet-based environmental tools include the GreenSafe Car Profiler, which allows motorists to compare vehicles based on environmental, safety, economy and security factors, and HomeHelp, which features a 3D virtual home that assists customers to make informed choices about building and furnishing options that home safety and environmental impacts.
