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Sustainable Purpose

Australia’s workforce is turning its attention to the social impact of business activity. We explore this rising social consciousness and how it's reshaping corporate fundamentals.

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4 min

Shifting Your Focus

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Shifting Your Focus

Business leaders are discovering the benefits of combining sustainability, innovation and profits.

Call it the light bulb moment. Corporate Australia has discovered how to solve one of its trickiest dilemmas – how do you earn profits and pursue social outcomes?

It’s a conversation dating back thirty years with the arrival of corporate social responsibility. But the latest approach is no longer just a question of arm’s length, feel-good philanthropy, now it’s a question of creating “shared value.”

Harvard Professor Michael Porter, a global authority on competitive strategy and economic development, says business leaders need to consider social good within the context of the core value business delivers.

“What we’re finding is there’s many, many societal needs – the environment, health, nutrition, savings – where you can actually make a profound impact, and profit at the same time,” he says.

People want to find programs and investments that sit in the nexus between core business, corporate success and value.

The fundamental idea is to find creative ways to combine social good with a profitable outcomes.

Michael Parks, General Manager, Governance, Integration and Reporting at Telstra’s Chief Sustainability Office, describes it this way: “People want to find programs and investments that sit in the nexus between core business, corporate success and value.”

This means forging company-wide sustainability programs that produce lasting benefits and building trust with customers. It’s a long-term approach where leaders consider profitable solutions that benefit communities and business partners.

For example, Australia’s Uncle Toby’s has integrated sustainable practices into its business operations. In recent years the company invested in research to identify a species of oats which could be grown closer to the point of cereal production, and provide a more regular income to Australian farmers.

It’s a solution that Porter says creates shared value by bringing the vitality of oat farming back into the community. “They invested money in R&D, they invested money in education and they created a new contract with their growers that took some of the risk of drought. That’s shared value.”

In other words, Uncle’s Toby has a focus on mutual benefits – its own bottom line and creating thriving local agricultural communities.

The idea is catching on across Australia through initiatives such as the Shared Value Project. Corporate members including NAB, Bendigo Bank, PwC, Nestle and Bupa have united to create social good. Project founder Rhodri Ellis-Jones, says the concept of shared value applies to different sectors of the economy.

“Shared Value is built around a core competency, focussed on creating competitive advantage and business growth so employees are intrinsically involved in the good created,” he says.

 
Shifting your focus
Shifting your focus

Managing risk, realising benefits

From a corporate perspective, the sustainability and shared value story synchronises with global reporting initiatives and standards organisations governing the behaviour of industry sectors.

Unlike traditional corporate social responsibility, shared value programs are derived from core business objectives, and existing capacities. The idea is to create social good by doing a core function in a better, more productive or more innovative way. Competitive advantage is achieved when an organisation’s processes are not only more efficient, but more deeply embedded in communities of stakeholders, suppliers or customers.

As they grapple with this process many large companies turn to international ratings to accurately track and benchmark the success of sustainability programs. This helps them compare progress with international counterparts, and promote their efforts to interested stakeholders.

Financial institutions such as ANZ Bank are also seeing the results in terms of public recognition. In January the bank was ranked number 19 in ‘Global 100 Most Sustainable Corporations in the World’ at the World Economic Forum in Davos, Switzerland.

This ranking was the result of programs such as MoneyMinded, which provides financial management skills to individuals in vulnerable communities in Australia, and around the world. By partnering with the Brotherhood of St Laurence, the program has helped Australians from low socioeconomic backgrounds save more than $8.9 million over a decade.

The program operates successfully in 17 different countries in the Asia Pacific region, with 92 percent of respondents reporting the program helped them achieve savings goals, while boosting their self-esteem.

We look for an accord of values in our employment relationship. Where such an accord is alive and real throughout a company, we see another source of competitive advantage.

 

While the bank benefits from increased business through MoneyMinded, it also creates a less risky investment portfolio, due to increased vigilance. Agri-businesses associated with high levels of pollution, companies with poor reporting practices, and business associated with human rights violations are excluded from the company’s investment portfolio.

Another example is Australia’s largest diversified property group, Stockland.

The company conducted a proprietary liveability study across its residential communities to focus on elements that contribute to higher customer satisfaction (or liveability). The approach ultimately drove sales growth.

For more information, download Telstra’s 2014 Sustainability Report and read about our commitment to responsible business.

 

Back to the future?

Looking ahead, the question facing business leaders now is how to build and maintain the momentum.

Sustainability has caught the attention of employees and customers, while initiatives like the Shared Value Project are providing a new and exciting approach to corporate social responsibility.

The challenge then becomes turning the groundswell into a movement that survives financial cycles and generational attitudes. Judging by contemporary attitudes in the workplace, the signs are good.

Speaking at a recent Shared Value Forum in Melbourne, Telstra’s chief sustainability officer Tim O’Leary says people already see a strong positive relationship between the social and economic forces.

“Most of us seek to find meaning and dignity in our labour”, O’Leary says. “We look for an accord of values in our employment relationship. Where such an accord is alive and real throughout a company, we see another source of competitive advantage.”

More information

Telstra has remained a signatory to the United Nations Global Compact since 2011 and contributed $217 million to social and community initiatives in 2014. Sign up for our monthly newsletter, Sustainability Matters.

 
3 min

Adopting the millennials

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Adopting the millennials

Discover how the creativity and deep sense of social justice of the millennials will prepare your business for the next phase of success.

Meet Brad Campbell – he’s a millennial. The 18 year old lives with his parents and attends Macquarie University where he’s studying for an electronic engineering degree.

Campbell enjoys his studies, considers himself creative, and wants a challenging, engaging job. He doesn’t have a particular employer in mind, but the notion of a job with fixed hours doesn’t hold great appeal.

“Arriving and leaving at a specific time doesn’t make much sense, I’m more interested in the job itself,” he says. “I’d also want the company to have a good image, one that believes in contributing to the greater good, if that really is a thing,” Campbell says.

 

Forward-thinking business leaders are starting to pay attention to people like Campbell. All the signs point to an ageing population and a decline in the actual labour force.

The implications are clear. Finding and retaining talent among a shrinking pool of labour will be one of Australia’s biggest workforce challenges. In addition, companies will need a fresh approach to human resources, one that doesn’t expect millennials to simply fit in to the established order.

Consider Eve Labeau’s story as an example. At 22, she’s an ambitious employee in the wealth management division of a big four bank. She’s already changed jobs to find an employer that offered the professional development she wanted.

She’s been consistently employed since 16, already owns an investment property and is studying accounting part time.

Notably, Labeau has already decided her career options are limited in a large company, and plans to start her own business as a financial adviser focused on women once she’s accumulated enough experience.

“I just don’t feel comfortable in this culture,” Labeau explains.

“There’s not really a good career for me in a big organisation, and if I start my own business it will be easier to manage when I have a family.”

Discovering the Millennials

Born between 1980 and 2000, millennials are a largely misunderstood demographic in the Australian economy.

They’re confident and optimistic, have a strong commitment to family, and invariably rate human interaction and happiness above material wealth or prestige.

Many still live with parents, but are far from lazy. They’re committed, hard workers who take pride in their work – so long as they feel connected to their role and employer.

“Millennials aren’t looking for jobs, they’re looking for opportunities,” explains Mark McCrindle, Australia’s foremost researcher into intergenerational differences. “They have high expectations on the organisations they work for based on workplace culture, professional development, managerial style and flexibility.”

McCrindle also points out millennials represent an economic shift not seen since the Baby Boomers drove demand for products and services in the 1960s. Their attitude to work is shaping average employment times and in turn will impact the economy.

“Millennials are spending an average of about three years, four months in a job, and will work for up to 17 different employers in their lives,” says McCrindle. “This means employers need to figure out not only how to find them in the first place, but also how to stay engaged with them through their careers.”

“Re-employment strategies become as important as retention strategies, as talented millennials circle through different roles.”

Millennials aren’t looking for jobs, they’re looking for opportunities. They have high expectations on the organisations they work for based on workplace culture, professional development, managerial style and flexibility.

Realising the benefits of a new generation

Challenges aside, the benefits of engaging meaningfully with the rising generation of millennials are many and varied.

In the first instance, they’re highly educated with the highest rate of post-school qualifications of any prior generation.

The Australian Bureau of Statistics reports 70 percent of 24 to 34 year olds already have a post-school qualification. By comparison, just over 50 percent of Baby Boomers had a similar level of qualifications at the same age.

Expect these highly educated people to be productive team players who feel connected to a global community and open to new ideas.

A global study by Viacom International Media titled The Next Normal highlights the optimism. Millennials hold a deep belief that the world could change for the better under their watch. Some 84 per cent of millennials believe their age group has the potential to change the world for the better.

It’s a level of confidence and social engagement not seen in previous generations, and it promises to reshape the workforce.

“Millennials have the potential to be incredibly productive, because for them work is about more than a ‘fair day’s work for a fair day’s pay’,” says McCrindle.

If they feel invested in and valued, they will repay the investment with commitment and productivity, McCrindle says. This could mean frequently checking work emails out of hours and working on the weekends, especially if their employer is willing to overlook a few late arrivals during the week.

Think big, act small

How well do you understand millennials? Social researcher Mark McCrindle offers this advice on the best ways to work with the younger generation of employees:

  • Millennials are highly educated, flexible, and determined to change the world
  • They maintain a commitment to flexibility, sustainable work practices and career progression
  • They focus on non-financial incentives like frequent flyer programs, training, variable work hours, exercise programs and overt recognition
  • They will help you to build a workplace culture of innovation.

 

 
4 min

Tips to keep talent happy

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Tips to keep talent happy

We reveal 10 ways IT workplaces find and keep the very best tech talent this country has to offer, by becoming employers of choice.

Forward thinking companies are finding ways to redirect the $6.2 billion Australian corporations spend on external recruitment services. Rather than spending money looking for the best employees, they are spending money becoming better employers, and getting the best employees to look for them.

Technology companies are particularly deft when it comes to establishing their reputation as employers of choice, and have dominated the rankings of Australia’s Best Places to Work awards since they were launched in 2008.

In fact software developers like Google, Atlassian, NetApp and Salesforce make the top 10 rankings in the BRW list year after year, and have even been described as employer Rock Stars. Rather than actively advertise or recruit, these companies largely rely on reputation to attract excellent staff.

The most successful IT employers “offer more”, but don’t necessarily “pay more”, because they understand that being a great employer is about more than remuneration.

So what is it that these IT employers of choice do differently? Here are the 10 things you need to know in order to find and retain the best IT staff.

1. People like working with people they like

A well-structured employee referral plan can not only drastically reduce the cost of finding talent, it can also help to build internal cohesion.

Mike Hulse, Asia Pacific director of recruitment at hosted software provider Salesforce.com, says about 51 percent of new hires come from employee referrals: “It helps us ensure we hire only those people who are the right fit, both for the role for which they’ve applied and for our unique culture,” Hulse says.

2. Creative people get bored easily

The most highly sought after employers use a range of techniques to keep talented, creative staff engaged. Google’s “20 percent time” which allows staff to work on their own creative projects is a perfect example. Other software companies make focus on the innovative nature of the software they produce to win great staff, while the promise of having a chance to work on cutting edge technology will often inspire talented IT staff to change employers.

3. Creative people need freedom

Micromanagement or insisting creative developers comply with pointless bureaucratic tasks is a great way to lose them, according to managers at Optiva, the algorithmic trading software developer which was named Australia’s best place to work in 2013. In response the company does as much as it can to reduce red tape and mundane tasks, so that talented developers can get on with the work they love.

4. Developers don’t like to go hungry

Almost all the top IT employers provide their staff with free food and good coffee, and although it’s pilloried by outsiders, it is a great way to ensure staff arrive early, and share ideas over the breakfast table.

5. People like to make a difference

There’s ample research pointing to a connection between philanthropic activities and employee engagement. In a clever twist many successful IT employers allow staff to dedicate time to a charity or community activity of their own choosing.

 
Tips to keep talent happy
Tips to keep talent happy

IT security company NetApp, which consistently makes the top ten employers lists around the world, grants each employee paid charity leave to enable them to dedicate their talents to something they regard as important. According to Gwen McDonald, senior vice president of Human Resources at NetApp, the company’s commitment to philanthropy is a source of pride and inspiration for many of the company’s employees.

“We believe that corporate philanthropy is a source of pride and camaraderie for our employees,” she said.

“As a company, we take creating and maintaining a unique work environment very seriously, and believe in developing programs that encourage giving back to the community.”

We believe that corporate philanthropy is a source of pride and camaraderie for our employees.

6. People need to feel they are part of a community

Although it’s often overlooked, the onboarding process can play a tremendous role in creating a sense of cohesion and camaraderie. The companies which do this best not only make sure new employees sign all their paperwork, but also to make sure they’re comfortable in the new setting.

Companies like Optiva use buddy systems to make sure new staff have someone to answer simple questions – like where’s the closest ATM? Really creative companies also find ways to make the process fun. New staff at software company Atlassian are provided with Nerf guns and funny t-shirts to help them feel at home in the new environment.

7. People like to know what’s going on

According to some of Australia’s best employers, a commitment to authenticity and transparency can make a significant difference to recruitment and retention. Some software companies operate what they call a classic open-door policy, others use statements like “ask anyone, anything, anytime”, to indicate a high level of responsiveness to questions and ideas.

At Salesforce, Hulse says the company’s commitment to authenticity and transparency is a great way to keep talented employees committed to their work.

8. People like to move forward, or at least sideways

One of the most important elements of staff retention is based upon whether or not employees see an opportunity to take on new challenges and expand their career. Companies which provide staff with a clear career progression, and routinely recruit internally for new roles, are less likely to lose good staff to competitors.

9. People are people

Companies that recognise that staff have important commitments outside of work invariably score more highly when it comes to staff recruitment and retention. While this is not specific to IT staff, flexible work practices such as work hours and the opportunity to work from home, child care, and carers leave have a significant impact on staff retention. According to Hulse, at Salesforce there is a strong focus on providing a combination of work-life balance, and a meaningful career.

10. Don’t forget to mention money

The most successful IT employers “offer more”, but don’t necessarily “pay more”, in part because software developers are already well paid, and in part because they understand that being a great employer is about more than remuneration.

So while the offerings listed here may well cost a little more, the best employers clearly demonstrate that the ability to find and hold on to great staff more than compensates for the costs or breakfasts, coffee or even the odd Nerf gun.

 

 
3 min

Ethical supply chains

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Ethical supply chains

Australian importer Amazonia has discovered how to give consumers ethical products, protect the environment and make a profit.

In just under six years, a curiously named company called Amazonia has grown from a single market stall to a multi-million dollar enterprise.

The Australian health food business imports açai berries from the Amazon for local customers, all of whom are hungry for more than just tasty fruit. In addition to the berries, they’re buying coffee from Papua New Guinea and baobab fruit from Africa, yet the appeal is not simply access to food from exotic locations.

Consumers increasingly seek products from companies with a passion for social and environmental responsibility – and they’re prepared to change consumption habits to feed that passion. In May this year consumer research commissioned by Fairtrade Australia found eight in 10 shoppers would be more likely to purchase a product which supported people in need, so long as it was a similar price and quality to what they were already consuming.

It’s a trend which represents an exciting growth opportunity for brands, like Amazonia, that can effectively establish ethical supply chains.

Dwayne Martens, Amazonia’s chief executive, says cultivating a sustainable supply chain begins with getting to know your suppliers. He describes it as a long-term commitment which starts with due diligence on potential suppliers and includes working with communities to avoid harmful farming practices.

Amazonia imports three tonnes of açai berries each month, sourced from 4,000 families located across 4,000 acres in the Amazon. “So for them there is a financial incentive to work with us to ensure harvesting is sustainable,” Martens says.

People want to know they’re consuming something that’s good for them and the environment, but they also want to pay a reasonable price.

While the foundational work required to create sustainable supply chains is more comprehensive, the result is access to a fast growing consumer segment, and a more stable supply chain.

In the case of Amazonia, Martens needed to help to educate farmers on how to produce the açai berry while maintaining the biodiversity that already exists in the Amazon rainforest. Martens works with his suppliers to show them how to plant the açai within forests, in stark contrast to cattle and soybean farming which requires rainforest to be flattened and replaced with monocultures.

The supply chain is more sustainable because the integration of the açai berry into existing ecosystems does not degrade the soil, which is what happens when the rainforests are removed.

In a similar project Martens spent four years in Thailand working with his coconut pulp suppliers to help them change to farming practices which replace banned pesticides and herbicides.

“Now, the coconut husks are ground to make fertiliser for the trees, which grow in estuaries. The fish and insects have started coming back, yields from the trees are higher and suppliers are getting paid more, so it’s a win/win situation,” he says.

 

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Sustainable growth at the big end of town

Much larger companies are also recognising the benefits of a sustainable supply chain.

Ten years ago Westpac started actively managing its ethical, sustainability and governance (ESG) risks.

Head of Sustainability and Community Siobhan Toohill says sustainability is a proxy for quality, a powerful driver in business.

“If you let your suppliers know you value sustainability, they will strengthen their systems. It’s in their best interest to be sustainable because we’re more likely to procure their products and services if they are,” she says.

Today Westpac actively looks for opportunities to work with businesses with the same commitment to ethically sourced products. It identifies and partners with businesses that empower women, plus social and indigenous enterprises.

For instance, Westpac’s Sydney caterer, the Compass Group, spearheaded the Warrigal program to help indigenous people develop hospitality and catering skills. Toohill says the approach has demonstrable commercial benefits. “It’s about reducing risks and developing stronger, longer partnerships.”

These partnerships matter over the long term, agrees Martens. “It’s a great marketing story and from a personal perspective, I’m proud to have created change. Staff also hear our story and say, ‘this is a company I want to work for’.”

Sustainable supply chains also let him charge a premium for his products, within reason. “We have to be careful not to price ourselves out of the market. So it’s a balance. People want to know they’re consuming something that’s good for them and the environment, but they also want to pay a reasonable price,” he says.

More information

Telstra has remained a signatory to the United Nations Global Compact since 2011 and contributed $217 million to social and community initiatives in 2014. Sign up for our monthly newsletter, Sustainability Matters.

 

Growth through sustainability

  • Creating a sustainable supply chains give brands access to a fast-growing and under-serviced market
  • Once established, sustainable supply chains are less risky and more stable than supply chains where the brand is detached from producers
  • They often require more work in the initial phase prior to a brand’s launch
  • Sustainable supply chains are more profitable in the long term and inspire deeper consumer loyalty.
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3 min

Building sustainable cities

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Building sustainable cities

Every year 66 million people move to a city, creating opportunities for companies to deliver sustainable high-tech urban infrastructure.

Every day, around the world, 180,000 people move to a city. It’s an unstoppable process that began over 200 years ago with the industrial revolution, and it shows no sign of abating.

Catering to this demand are the massive futuristic smart cities like Songdo in South Korea, and Kochi in Kerrala India, where technology is integrated into the underlying infrastructure.

In fact the $3.17 trillion annually spent on infrastructure is increasingly focussed on sustainable and technologically advanced development according to the Organisation for Economic Co-operation and Development.

With much of this growth happening in our region, there are significant opportunities for Australian companies capable of delivering high-tech, sustainable urban services and infrastructure.

India’s top ten cities will have to triple in size over the next 15 years if the country is to keep up with the increased demand for urban housing and infrastructure.

Counting up the opportunities

China currently accounts for more than 50 percent of the building being carried out globally. Due to the Chinese Green Building Assessment system established in 2006, all new buildings need to demonstrate 50-65 percent energy savings based on 1980s standards.

In addition to this, the Chinese government recently launched a project to renovate existing buildings to make them more energy-efficient, and capable of offering residents access technology such as high-speed internet connections. This project involves up to 25 percent of the buildings in medium-sized cities, and 10 percent of those in small cities.

The success of Australian architectural firms in China is already well established. Constructions such as the Beijing Olympic Swimming Centre, designed by Australian architects PTW, paved the way for the current raft of huge building projects including a tranche of retail projects from Sydney-based architects, The Buchan Group.

China’s 12th Five-Year Plan, which has been operating since December 2010, has created enormous opportunities for engineering, building and construction companies with a focus on sustainability. It indicated significant and ongoing investment in the construction of airports, sewerage systems, utilities and affordable housing featuring sustainable technology.

Meanwhile, a recent Austrade report into demand for housing in India suggests urbanisation in India is being driven by a mass migration which will see city populations swell by 700 million by 2050. The report also estimates that 75 percent of the buildings that will exist in India by 2030 have not yet been built.

To put it in perspective, India’s top ten cities will have to triple in size over the next 15 years if the country is to keep up with the increased demand for urban housing and infrastructure.

In July this year the Indian government announced its intention to support the building of 100 new Smart Cites – featuring high-tech communication systems, and energy efficient construction methods. This means that a significant proportion of the infrastructure created will be focussed on delivering access to technology as well as sustainable design.

There are also significant opportunities for high-tech, sustainable development due to similar urbanisation trends in the Philippines, Turkey, Vietnam, Malaysia and India, according to Austrade.

 

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Sustainable success

According to a UN report into global responses to urbanisation, the trend is driving demand for more sustainable high-tech housing largely because traditional construction techniques simply won’t scale to meet to explosion in demand. As a result, the focus on green construction in China will ultimately pave the way for similar construction projects all over the world.

Austrade research suggests there are significant opportunities for Australian specialists in everything from design theory to energy efficient building materials, and co-generation technologies like solar power and bio-fuels.

As such, there are significant opportunities for sustainable building and construction companies capable of navigating Asian business culture. According to a PWC whitepaper, the most important tactic is to have experienced staff who understand the Asian market, before attempting to do business in China, or any other Asian country.

The whitepaper, Australia in the Asian Century, outlined four steps Australian businesses need to take before embarking on a foray into Asia. These include a full assessment of the market potential to determine real growth opportunities, a complete financial analysis and understanding of regulatory frameworks, a clear understanding of the value proposition and a complete resource capability audit.

And although expansion into such new markets can appear complex, the demand is such that the resulting business will be worth the effort.

 

In summary

  • Rapid urbanisation is leading to a massive increase in demand for sustainable building, construction and engineering services.
  • The focus is on sustainable building techniques, as traditional construction techniques won’t scale to meet the massive spike in demand.
  • Over 50 percent of the building currently being carried out around the world is taking place in China.
  • Staff with experience with Asian culture and business are an essential component of expansion into the region.
  • Experience in sustainable building practices in China will feed into demand for sustainable building practices elsewhere.

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