Corporate social responsibility: environmental concern in New Zealand's wine industry

Abstract

Corporate social responsibility (CSR) has become a worldwide issue as organizations are under increasing pressure to behave in socially responsible ways. This exploratory study examines (1) the environmentally sustainable practices in the wine growing industry, (2) what drives the industry to engage in CSR, and (3) the role of stakeholders in the company’s decision making. The expected findings will yield information how vineyards and wineries view given regulations, and determine relevant stakeholders for wine making industry. Introduction The concepts of corporate social responsibility (CSR) have been developing for decades (Carroll, 1979) and have become a worldwide issue. Organizations are under increasing pressure to behave in socially responsible ways, to help to solve social problems, support charities, exhibit ethical behaviour and moral management. The main concern also involves the protection of the environment, such as producing environmentally friendly products, recycling, waste management, animal testing, pollution control, energy efficiency and land use. One New Zealand industry having an impact on the environment is viticulture the industry engaged in the cultivation of grapes. New Zealand’s wine growing may be relatively young, but it has grown into a large industry. In 2001, New Zealand had 11,648 hectares producing wine grapes, resulting in 53.3 million litres of wine. In 2006, production had increased to 22,107 hectares farmed and 133.2 million litres of wine produced (Ministry of Agriculture and Forestry, MAF, 2006). The MAF (2006) forecasts wine production will be 20 percent higher in the year ending March 2007 than in 2006. After 2007, wine production is expected to increase 10 percent per year until March 2010, as new plantings mature. Expansion of viticulture depends on the availability of good quality irrigation. Other factors influencing growth will be availability of investment capital, planting stocks of the desired variety from nurseries, and climatically and physically suitable land. All current grape growing areas are expected to increase, with Hawkes Bay, Marlborough and Otago increasing the most. The statistics illustrate the importance of the New Zealand grape growing industry and the potential for its further development, and indicate a need to address CSR within this industry. Although the wine industry does not receive as much media attention as industries often characterized as ‘dirty’ such as the chemical industry, this industry faces a number of serious environmental issues (Marshall, Cordano and Silverman, 2005). The MAF (2006) and Sustainable Winegrowing New Zealand (2006) describe several environmental impacts of vineyards. Grape production can cause damage to surface and ground water from runoff. Discharge of fertiliser, pesticides and contaminants can damage land or air. Waste water may contain sediment or pesticide. Lots of chemical have been used in weed and grass control. Sulphur and synthetic fertilizer can leach into ground water (Baughman et al., 2000). Further,