Where do your sustainability responsibilities start and finish?

Sustainability is increasingly being perceived as a crucial approach to reducing costs, improving operational performance alongside the enhancement of public trust and shareholders' approval. Ultimately, it allows for a sound business activity in terms of economic benefits, social stability and continual improvement.

From virtually zero awareness only a few decades ago, the Australian government and industry are now moving fast into sustainability. In particular, industry is experiencing a shift from mere regulatory compliance and technological improvements to more progressive self-regulation (like voluntary agreements and programs), community consultation and stakeholders' dialogue.

In the wake of this momentum, companies like Qantas and Fosters are feeling the urge to consider and develop their own approach. Others, such as OneSteel, Lion Nathan and Kingsgate, are committing to consistently invest corporate resources to turn new visions into actual strategies.

"We all have a long way to go," Mark Gell the general manager of OneSteel remarks, "but we are now identifying the criteria to have a sustainable business."

What is a sustainable business then? And what is the extent of responsibility of individual companies?

As a company with high operational risks OneSteel, which is one of the largest steel manufacturers and employs 7000 people across major cities and regional areas of Australia and New Zealand, has built its core responsibility around safety. It has a full-time risk manager and an internal audit program aimed at providing assurance of the company's risk management and internal compliance and control system. International standards are used for benchmarking and internal management systems in occupational health, safety and environment are regularly monitored and reviewed to achieve high standards of performance. In particular, occupational risks are identified by a preventive approach that looks at medical treatment to trace back the causes of harm and seven of OneSteel's sites in Australia are ISO 14001 certified.

All this has led to an excellent performance in safety.

At the same time, as a very energy intensive industry, OneSteel is aware of the benefits of internal closed loops, for example by reusing and recycling water, and of energy savings and emissions reductions by improving efficiency of processes. The recent relining of the Whyalla blast furnace has also been a chance to tackle fugitive dust by shifting from a dry to a wet process.

At Whyalla, 3.6 GL of freshwater are used per year but recycled 10 times.

At its Sydney Steel Mill, OneSteel is looking ahead and believes that it could achieve a 50% reduction in freshwater use. However, the feasibility of this will depend on a consultation and collaborative effort with the government to determine how much recycled water the company will be able to receive from the sewerage treatment plant in Western Sydney.

Steel is the largest recycled material in the world (40% is recycled globally) and when we look at its life cycle, the potential to recover scrap and reduce the reliance on the more costly raw materials and resources is substantial. However, the steel intensity in the Australian economy is only 10% versus 50% in the US and 65% in the UK. In this case, Mr Gell's involvement in the Australian Energy Market Reform Group as well as OneSteel's contribution to research (eg, Newcastle University and the Cooperative Research Centre for Sustainable Resource Processing (CSRP) is an indication of OneSteel's commitment to promote a greater shift to sustainable steel production and usage that will benefit the whole economy. Mr Mark Gell clearly pointed out that being sustainable involves a multi-levelled thinking (economic, social, educational) and not just a 'ticking the box' mentality. Responsibility happens throughout the whole chain, from mining to distribution, and is mirrored 'internally' into ethics, corporate governance, environmental performance and safety, and 'externally' into a pro-active and participative approach to debates and public forums. He has no doubt that sustainability is the way forward.

In the same way, Mr David Carter, Lion Nathan's director of environment and technical projects, is certain that environmental and community programs at Lion Nathan will not stop as environmental issues have demonstrated to bring clear economic benefits. The company is therefore committed to listen to public concerns - as public perception of sustainability is becoming more and more tangible - and to raise the company performance, both internally and externally, right across the whole business. Lion Nathan has had an environmental policy for the last five to six years. The company has five running projects (in eight breweries) with a solid approach: it develops one program that it can systematically apply to all its sites. Presently, only the largest of them (in Sydney) is ISO 14001 certified but the company board has the commitment to extensive ISO accreditation in the next three years. This initiative has stemmed out of the belief that the company can successfully satisfy shareholders' expectations. Also, Lion Nathan believes that this approach works in conjunction with the business performance and is conducive to a stronger, more efficient and trusted business. Yet, there is a general agreement that a behavioural change in society is necessary. "You can't do it in isolation," Mr Carter said, "the whole market has to move."

This point gains particular significance with covenants (or voluntary agreements) and with issues of product stewardship where, to achieve set targets, it is vital to have all players along the chain to do their part.

To devise the shift from legislative compliance to self-regulation and greater involvement with external stakeholders, Lion Nathan has therefore responded to its shareholders' requirements but, at the same time, the management has also had to go a step forward and consider "what a responsible company shall do beyond profits", in Mr Carter's own words.

Lion Nathan has signed some protocols like the Australian 'National Packaging Covenant', the 'New Zealand Packaging Accord' and has recently extended its 25-year founding membership of the Beverage Industry Environment Council (BIEC). The first two agreements have the dual scope of reducing waste going to landfill and improving the useful reuse of materials by setting national targets. The aim of the BIEC, on the other hand, is to achieve sustainable solutions for the beverage packaging waste: as its member, Lion Nathan has contributed to recycling and litter prevention schemes throughout Australia. In 2003/04, Lion Nathan reduced its waste by 32% compared to 2001/02; it reduced glass packaging by 542 tonnes - thanks to glass light-weighting initiatives - and is now progressing trials relating to materials reduction and optimisation in conjunction with suppliers and customers. All this shows how voluntary agreements aimed at resource recovery can lead to significant and continuous improvements in business performance.

Further, like other major companies, Lion Nathan is also committed to benchmark its internal management systems against international standards such as the AS/NZS ISO14001, and to external assessment. In this case, the company provides data to the Corporate Responsibility Index (CRI), which uses the Global Reporting Initiative assessment criteria, and to RepuTex. In 2004, Lion Nathan received a CRI rating of 82.4%.

A very rewarding initiative for the company has also been the membership to the Australian Greenhouse Challenge Program (now called the Greenhouse Challenge Plus). This is a joint initiative between government and industry to promote and show progress on emission reduction programs. Lion Nathan became a member in 1996 and since the Award Initiative began in 2000, it has received four Awards. The Gold Trophy in 2001 (to its site in Brisbane) related to 3947 tonnes/year reduction in emissions (about 6% of the Brewery's emissions) alongside a reduction of 150 kL of water consumption and discharge. This shows a clear case of a win-win scenario where reductions in emissions can impact on other aspects of corporate resource consumption, for example: on water savings and equivalent reductions in effluent discharge.

The Bronze Trophy is another award that Lion Nathan received for outstanding achievements in GHGs emissions reductions. It was given in 2003 to the Swan Brewery in Perth where a wastewater treatment plant had been upgraded: this resulted in GH emissions of about 625 tonnes per year with concomitant savings of 504 kWh and 50,000 kL water. The company saved $70,000 per year overall. Thanks to this GH Challenge Program, between 1995 and 2004 Lion Nathan reduced water usage by over 30%, energy use by about 28% and waste sent to landfill by over 22%.

Awards have also been a major means by which Kingsgate, a gold mining and exploration company, has been able to influence other industry players in Thailand, where it operates. In fact, Kingsgate has been able to provide a corporate example in terms of best labour relations and best employee welfare. As a small-medium gold producer, which generates about 3600 kg of gold per year, Kingsgate has focused its primary core responsibility in minimisation of environmental impacts (both during and post-production) and community involvement and capacity building. The major concern in mining has always related to acid mining drainage (AMD). The company does therefore deploy best operational and water treatment standards to avoid seepage into surface and ground water. Furthermore, the cyanide used to extract gold is removed from effluents before these are transferred into open ponds and, notably, the process leaves into wastewater cyanide concentrations of 5 ppb (parts per billion), which are comparable to less than cigarette smoking or coffee drinking. The company uses 700 ML of freshwater per year - with the remaining coming from diverse sources such as surface runoff storage and open pit dewatering - and of this water supply, 2300 ML are recycled per year. Currently, the company has commissioned studies on water and energy resources as it is aware that, in order to expand its operations, a sound policy approach must be warranted. This can happen through appropriate management systems, international standardisation and best practice, and solid community relations.

The company is a signatory member of the Mineral Council of Australia (MCA), which only invests in mineral projects that are not only financially profitable but also technically appropriate, environmentally sound and socially responsible.

In 2005, Kingsgate received from the MCA a ranking of 74%, an improvement from 69% in 2004, and an A ranking from RepuTex. Mr Stephen Promniz, the corporate development manager at Kingsgate, remarked that nowadays it is unavoidable to 'walk the talk' from the very onset of business operations. And, particularly when offshore, it is paramount to help build a stable local community not only by improving individual incomes but especially by providing training and capacity building that will contribute to the improvement of the local economy at large.

Ultimately, to approach a sustainable economy, is a multi-level process where companies' internal improvements - both with respect to performance and meeting public expectations - external assessment and partnerships with other industry players and the government must all happen to create an even stronger synergy to higher goals.

Responsibilities lie horizontally, per sector, and vertically, across the whole supply chain down to consumers and stakeholders in society. The long way to walk will shorten once more alliances will be created, dialogue will continue and listening exercises about best practice and future directions will become relentlessly mainstream. Fortunately, there is a growing agreement that sustainability is the new 'springboard' for the future.