Sustainability Assessment Report Referring To The Consolidated Set Of GRI Sustainability Reporting Standards

Introduction

According to the EU Commission [(2002) 347 final: 5], “Corporate Social Responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. ” Any kind of action taken by an organisation, affects not only their business but also the external environment where the organisation is located. These effects can be listed as (Crowther and Aras, 2008):

• The utilisation of natural resources as a part of its production processes
• The effects of competition between itself and other organisations in the same market
• The enrichment of a local community through the creation of employment opportunities
• Transformation of the landscape due to raw material extraction or waste product storage
• The distribution of wealth created within the firm to the owners of that firm (via dividends) and
• The workers of that firm (through wages) and the effect of this upon the welfare of individuals
• And more recently the greatest concern has been with climate change and the way in which the emission of greenhouse gases are exacerbating this.

CSR consists of three basic principles, which are Sustainability, Accountability and Transparency (Crowther and Aras, 2008). Of the three principles of CSR the one that is most prominent at the present time is Sustainability.

Sustainability Assessment for planning and development decisions is increasingly gaining importance across the globe (Bond, Howitt and Morrison-Saunders, 2013). With this background, this particular report is attempted to prepare Sustainability Assessment report referring to the Consolidated Set of GRI Sustainability Reporting Standards 2016 for Timberwell Construction Company.

Definition

Sustainability is about meeting the needs of the present without compromising the ability of future generations to meet their own needs (UN Documents, 1987). As Carrol (1979) said in a review, “more immediate concern is the fact that as resources become depleted then the cost of acquiring the remaining resources tends to increase, and hence the operational costs of organisations tend to increase”.

The three pillars that Sustainability enlightens are:

1. Environmental sustainability to maintain rates of renewable resource harvest, pollution creation, non-renewable resource depletion that can be continued indefinitely.
2. Economic sustainability, which is about supporting a defined level of economic production/assets of a company indefinitely.
3. Social sustainability that is the ability of a social system, such as a country, to function at a defined level of social well being indefinitely.

Triple bottom Line

The triple bottom line is a process by which companies manage their economic, environmental and social sustainability risks, sometimes also referred to as profits, planet, and people is the underlying principle of sustainability (Fauzi, Svensson and Rahman, 2010). The idea behind triple bottom line is that a corporation’s ultimate success depends not just on the traditional financial bottom line, but also by its social/ethical and environmental performance (Norman and MacDonald, 2004). Global Reporting Initiative (GRI)“The Global Reporting Initiative (GRI) was formed in 1997 by the Coalition for Environmentally Responsible Economies (CERES) in collaboration with the Tellus Institute” (Sherman, 2009). The GRI Standards represent global best practice for reporting publicly on a range of economic, environmental and social impacts. The G3 Guidelines refine the G2 Guidelines framework for sustainability reporting. The standard disclosures made under G3 include (GRI, 2006, p. 19):

• Strategy and Profile Disclosures set the overall context for reporting and for understanding organizational performance, such as its strategy, profile, governance, and management approach;
• Disclosures on Management Approach cover how an organization addresses a given set of topics in order to provide context for understanding performance in a specific area.
• Performance Indicators that elicit comparable information on the economic, environmental, and social performance of the organization. Referring to Timberwell Construction Company, the following Sustainability assessment report is based on the Consolidated Set of GRI Sustainability Reporting Standards 2016 that specifically addresses:

A. Economic Sustainability

1. Disclosure 201-2 Financial implications and other risks and opportunities due to climate change “When compiling the information specified in Disclosure 201-2, it shall report its plans and timeline to develop the necessary systems” (GRI, 2016). The warming effect of climate change has led to the risk of bushfires at Stanwell Council District. Because of the expected risk, Stanwell Council has proposed to its Local Environmental Plan (LEP) to rezone specific areas as ‘bushfire prone’. As Timberwell Constructions is a residential development company that builds apartment complexes in the same district, it is working communally to meet the terms of LEP amendments, which is assumed to take effect within 6 weeks. The company unfortunately has a new apartment project located in the ‘bushfire prone’ area. Considering the situation, any new development in that area will be required to meet higher standards of bushfire safety including larger distances between buildings and land boundaries and the use of fire retardant building materials, for which, the estimated cost could be approximately $4 million. So as to reduce the potential cost, the company has hired an external town-planning firm who is charging $50,000 for their services.
2. Disclosure 205-3 Confirmed incidents of corruption and actions taken In order to get the Council’s approval for certain project application, five employees of the Timberwell Company with two business partners offered bribe to the council project officials. The scandal exposed to the public when a former employee, named Dennis lodged complaint of the same to the state corruption commission. In response to the complaint, the State Corruption Commission filed charges against those employees and external consultants. Although the outcome of the prosecution is still pending in court, Timberwell Company suspended all involved five employees without any monetary compensation and also terminated its partnership contract with the consultants caught up in the corruption scandal.
3. Disclosure 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices Following another complaint by Dennis to the Australian Competition and Consumer Commission (ACCC) regarding Timberwell’s operation, the Federal Court ran proceedings for suspected anti-competitive conduct involving misuse of market power and exclusive dealings. The case was based on the fact that that Timberwell acted upon such behaviour for the purpose of deterring or preventing a new competitor in the construction market in the Stanwell district. When the construction company found out about a local builder setting up a company in the same area as of theirs, the senior executives threatened their existing suppliers and contractors to not get involved with the new company otherwise they would either reduce or withdraw their business with them. The case is due in four months at the Federal Court.

B. Environmental Sustainability

Disclosure 302-1 Energy consumption within the organization

Dennis also made a separate complaint to the Department of the Environment and Energy. Following an investigation by the Department, Timberwell was fined $200,000 for clearing 0. 45 hectares of critically endangered ecological community coastal grasslands. The cleared area was recognised under the State Planning Scheme as containing important flora and fauna attributes. Timberwell was also ordered to undertake an external review of its vegetation management plan, extend its audit program for contractors, and implement a rehabilitation plan at a cost of no less than $440,000.

Disclosure 304-2 Significant impacts of activities, products, and services on biodiversity

The Stanwell Council did an Environmental Impact Assessment prior to Timberwell starting a new construction proposed at the company’s Otford Park development site. The evaluation revealed presence of rare wallum sedge frog in about 60% of the development location. The measurement showed that if the construction does take place at the location, it would result in permanent change in the environment making it incompatible for the frogs’ survival. Hence, Timberwell is trying to figure out an efficient approach to manage the risky situation so as to save the wallum sedge frog existence and also successfully complete the new building. They are considering help and support from both the Stanwell Council and the environmental groups to tackle the biodiversity situation.

Disclosure 307-1 Non-compliance with environmental laws and regulations

Timberwell was fined with $200,000 for acting non compliant with the environmental laws and regulations. Following an investigation by the department, it was revealed that the company had emptied their production waste into 0. 45 hectares of significantly rare natural community coastal grasslands. The State Planning Scheme documented this particular area containing essential flora and fauna features. In addition to the monetary fine, Timberwell was told to commence an external review of its vegetation management plan, extend its audit program for contractors and implement a rehabilitation plan, all of which could cost around $440,000 or possibly more.

C. Social Sustainability

Disclosure 401-1 New employee hires and employee turnover

When hiring employees, an organization can use the following age groups to categorise them and avoid unnecessary discriminations or work related abuse:

• People below 30 years of age
• People in 30-50 years of age range
• People over 50 years of age

The information related to age, gender and region depicts not only the recruitment system but also an organisation’s strategy and ability to attract diverse and qualified employees (GRI, 2016). High rates of employee turnover indicate that the employees are either not satisfied or feel frustrated at work for which the reasons could be various. Looking at Timberwell’s employment status, it usually utilizes 58 staff who are males from the local community having different construction related trades and professions. However, they had to appoint 12 new trainees in one reporting period as almost 17 workers quit mostly to work for other competitor organizations or begin their own business. Considering the high competition in the local market for these workers, Timberwell decided to increase the salary and provide monthly rostered day off from work to be able to retain its existing workforce.

Disclosure 406-1 Incidents of discrimination and corrective actions taken

According to International Labour Organisation (ILO), discrimination can happen based on age, gender, colour, religion, disability, migrant status and other factors like sexual orientation, genetic predisposition, and lifestyles (ILO report, 2011). In one such situation, Timberwell was ordered to pay an employee $4,400 as reparation due to discrimination at workplace. This happened when Mr. Dennis McCabe, an ex-employee of the company, filed workplace harassment grievance in the Fair Work Commission. He complained of being discriminated by his young fellow mates and being the only one who was above 50 years in age, had to suffer from embarrassing age related jokes. Apart from the fine charges, the Commission suggested Timberwell to revise their anti-discrimination policy and also instruct all its employees for anti-discrimination training. Taking into account the underlying circumstances that led to the incident, they acted in accordance with the Commission’s orders.

Disclosure 413-1 Operations with local community engagement, impact assessments, and development programs

Communities have individual and collective rights deriving from and among others in every country. And Timberwell constructions were under a very negative impression from the community because of the several accusations made against their practices. Therefore they announced a series of media releases following these allegations to strengthen its public image. With the intention to express themselves as good corporate citizens, they enlightened the community about their Environmental Impact Assessments, local resident meetings, and local community development programs for affordable social housing. Environmental Impact Assessments (EIA) and Strategic Environmental Assessments (SEA) intend to prevent negative environmental impacts. They examine the policies, plans, programmes and other initiatives that ascertain to lead society in a more sustainable direction (Devuyst, 2000).