IMHO: Competing values

OPINION: There are some who would say nothing would excuse another kg of carbon emissions. There’s also another view. For most SMEs in New Zealand, their impact on the environment is small. We all have a part to play but if you follow Coveys’ The 7 Habits of Highly Effective People, our circle of concern is huge, whereas our circle of influence is small. New Zealand is responsible for just 0.17% of worldwide emissions  so for most SMEs their most valuable contribution to our community may not be the “E” in their Environmental, Social and Governance (ESG) journey.  Companies might contribute more to the S in ESG, for example.

In addressing this potential balancing act, boards can face difficult decisions, especially in the current financial climate. What if you had to consider a trade-off:

• Keep everyone employed but doing so will mean lifting production, and increasing greenhouse gas emissions
• Choose not to increase production, and not increase emissions, with the prospect of laying off workers

How does a board deal with this?

In this scenario we have competing priorities and need to consider the value to the company and stakeholders, notably consumers, about each possible action. Do we give more weight to the E or the S? Is the increase in carbon emissions minor compared to the social value of work? Which is more important?

These are great questions and the reason they are hard to answer is because there are no metrics for the social value of employment. It’s easy to measure carbon emissions. It’s easy to know what the output is and measure any movement. How do we measure the value of employment?

The Ministry for Primary Industries in December 2014 produced an information paper “The social value of a job”.  In this, the researchers looked at what benefits there were in having a paid job. This included improved living standards, a pathway out of poverty, improved health & wellbeing, improved self-esteem, lower death & suicide rates, improved skills and employability, improved family outcomes, increased social connections, and assistance in the reduction of substance abuse.

This is an excellent read and while we don’t have a number, it is clear there are significant benefits in someone being employed.

So, what if we did have a number?

What if the social value of employment was $400 per person, and employing them would create 3 tonnes of additional carbon? At $80 per tonne? What would you do?

There are some questions you can ask that help build a picture of the social impact a job may offer. The answers may help bring clarity to your thinking

• How many jobs will this create (save)?
• Are these part-time or full-time roles?
• Do the jobs have regular daylight hours or are these shift work?
• Will the roles be filled by an unemployed person or someone moving jobs?
• Is the work local (so workers can quickly & easily return home after work)
• What type of skills are required?
• Is there capacity in the local community to fill these roles?
• Will immigrating workers be able to bring their families with them?
• Do the pay rates reflect the value and skills brought to the business?
• Will there be promotion and learning opportunities?
• Is the company already connected to its community?

The New Zealand business community, is my view, is a responsible network who want to do the right thing. Ideally, offering employment and reducing emissions is the right thing, but life is not always that simple. 

About the author

Paul is a Senior Partner in Findex. He is a Chartered Member of the Institute of Directors and Fellow Chartered Accountant. He chairs the board of Tuapeka Gold Print, Batchelor McDougall Consulting and is a director of Aotea Group Holdings. His charitable roles include chair of The Healthcare Otago Charitable Trust and trustee of Warbirds Over Wanaka Community Trust and the Findex Community Fund.

The views expressed in this article do not reflect the position of the IoD unless explicitly stated.

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