Mba402 Gri Sustainability Report Answers

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• Subject Code : MBA402
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• Subject Name : Management

Governance, Ethics and Sustainability

Overview of Governance, Ethics and Sustainability

This is a GRI Sustainability Report for Tramalway Industries. The report is basically an analysis of the Company CEO’s message to its employees informing about the sustainability measures taken by the company (during an annual period) and its potential impacts of the company. The CEO primarily discussed three issues in the message including:

1. The child labor at the production facility of one of the supplier,
2. Violation of Australian Competition and Consumer Law,
3. Oil spill at a warehouse that damaged the soil

The CEO also pointed the major achievements related to sustainable development of the company including:

1. Grant awarded by Federal Government for R&D in biotechnology
2. Completion of welfare program for social well being
3. Launching of employee training program on human rights and completion of 100 hrs.

Table of Contents

Introduction.

Background.

Methodology

Economic Sustainability

Environmental Sustainability

Social Sustainability

Conclusion.

Reference.

Introduction to Governance, Ethics and Sustainability

Humanity is currently facing the largest social, environmental and economic challenges than ever before, encompassing population growth, dwindling global ecosystems and unprecedented financial crises. Corporate enterprises have often been criticized of performing unsustainable practices to achieve financial wealth and avoiding the consideration of the possible socials outcomes and environmental impacts. In the last few years, the growing concern for the concept of sustainability or sustainable development has forced the business organization in raising a consciousness of leadership to develop and implement sustainable business practices while conducting their business operations (Carney 2015).

Background of Governance, Ethics and Sustainability

Sustainability is generally referred as a concept that aims at meeting the present requirements or needs while considering the requirements of the future generations. The concept has three primary pillars as follows:

• Economic: efficient use of resources that avoids overconsumption and increase profitability
• Environment: Reduction in carbon footprint, waste management, etc.
• Social: Fair employee treatment, supply chain monitoring for issues like child labor, CSR policy to return back to society. etc.

These three pillars are also referred to as profits, planet and peoples

Methodology of Governance, Ethics and Sustainability

The disclosures related to sustainability opportunities and risks, and blueprint for non-financial reporting have been greatly demanded by investors and stakeholders. The Global Reporting Initiative (GRI) is an independent, world level organization that is aimed at helping various governments and businesses with non-financial reporting effectively and makes public disclosures about the impacts of business activities on sustainability topics including social, environmental, and governance (ESG) (Fuller and McCauley 2016).

For the above primary goal, the GRI has developed a set of guidelines that is generally referred as the Sustainability Reporting Standards (SRS). GRI officially launched SRS during late 2016. The GRI Standards has three Universal Standards for general information disclosures and sustainability management. And there are various topic-specific standards that outline the disclosures of quantitative and qualitative information that are important for every reporting organization.

Economic Sustainability

Economic sustainability aims at long-term economic growth while avoiding any negative impact on the cultural aspects of the community and social & environmental infrastructure.

Standard “GRI 201: Economic Performance”, Standard “GRI 203: Indirect Economic Impacts” and “GRI 204: Procurement Practices” requires disclosures on the topic-specific and management approach disclosures (Benokraitis 2019).

Disclosure 201-4: Financial assistance received from the government

As per the standard, the reporting organization is required to report the total monetary value of financial assistance received by the organization from government during the reporting period.

The CEO in the message to employees has made a disclosure about the financial assistance that has been received from the government. It states that the Federal Government has awarded Tramalway Industries with a grant of $ 15 million for R&D activities in the biotechnology sector

Disclosure 203-1 Infrastructure Investments and services supported

As per the standard, the reporting organization is required to report the following:

• Extent of investment in infrastructure and supported services.
• Expected or prevailing impacts on local economies and communities, that can be either negative or positive or both.
• Disclosures related to their nature of commercialization (Burke, Genn-Bash and Haines 2018).

The CEO in the message to employees has made disclosures as follows:

• The company has completed its $ 10 million welfare and health centre project in Dolan Bay, SA.
• The centre aimed at providing ailment free of charge to families that are facing various social issues.
• It shoes the commitment of company to the social well-being of less fortunate people of the community.

Disclosure 204-1 Proportion of spending on local suppliers

As per the standard, the reporting organization is required to report the following:

• A percentage of the supplies that has been locally procured
• Geographical definition of ‘local’ as per organization
• Definition for ‘significant locations of operation’

The CEO in the message to employees has made disclosures as follows:

• The company has identified a new “local” supplier. Now the percentage of products and services that have been procured by the company from local suppliers has been increased to 75% of the total budget.
• The CEO has defined that local means the suppliers that are operating within metropolitan territories (Carney 2015).

Environmental Sustainability

Environmental Sustainability has formulated standards that are concerned about impacts on non-living or living natural systems that include land, water, air, and ecosystems, due to organization’s activities.

Standard “GRI 301: Materials” and “GRI 306” Effluents and Waste” requires disclosures on the topic-specific and management approach disclosures.

Disclosure 301-1 Materials used by weight or volume

As per the standard, the reporting organization is required to report the total volume or weight of materials that are used in production and packaging of the primary products and/ or services of the organization during a reporting period, where the used materials can be:

• Non-renewable materials used and/ or
• Renewable materials used.

The CEO in the message to employees has made disclosures as follows:

• The whole procurement of materials from new supplier is both recyclable and renewable.
• The total usage of non-renewable materials for the reporting period remains 55 tonnes, which is a decrement as compared to previous reporting period.
• The total usage of renewable materials for the reporting period remains 45 tonnes, which is an increment as compared to previous reporting period (Dare, Schirmer and Vanclay 2014).

Disclosure 301-2 Recycled input materials used

The reporting organization shall report the information about the usage of recycled input materials (in percentage) that are used in production and packaging of the primary products and/ or services of the organization during a reporting period.

The CEO in the message to employees has disclosed that the total usage of recycled input materials for the reporting period remains 25 tonnes, which is an increment as compared to previous reporting period.

Disclosure 306-3 Significant spills

As per the standard, the reporting organization is required to report the following information:

1. Total volume and total number of recorded spills.
2. The following disclosures also needs to be made:
3. Spill Location
4. Spill Volume
5. Spill Material
6. Significant impacts due to spills (Fuller and McCauley 2016).

The CEO in the message to employees has made disclosures as follows:

1. A single incident of fuel spilled of 8 kilolitres (approx), due to rupture in a single fuel tank.
2. The following additional information is also disclosed:
   • The spill occurred at a warehouse of a company located at Chemora, Queensland
   • Approximately 8 kilolitres of fuel spilled from a rupture in one of the fuel tanks into the soil around its base
   • Material of spill: Fuel spill on the soil around the base of a ruptured fuel tank.
3. No specific disclosure has been made about the damage to the soil, however it has been disclosed that immediate remedial measures were taken by spraying liquid hydrocarbon-eating bacteria at the affected area.

Social Sustainability

Social Sustainability has formulated standards that are focused on the social dimension and the impacts on the social infrastructure due to organizational activities (GRI 2020).

Standards GRI 408: Child Labor, GRI 412: Human Rights Assessment and GRI 417: Labeling and Marketing requires disclosures on the topic-specific and management approach disclosures.

Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor

As per the standard, the reporting organization is required to report the following information:

1. Suppliers and Operations have risk for incidents related to Child labor
2. The incidents of child labor have occurred in terms of:
   • The type of operation,
   • The geographic area or country
3. The material measures intended towards effective abolition of child labor taken by the organization.

The CEO in the message to employees has made disclosures as follows:

1. As per a media investigation Golden Goods Ltd, a Bangladeshi supplier to the company has employed ‘Child Labors’ in their manufacturing facility (Hřebíček et al. 2014).
2. It was found that:
   • Type of operation was manufacturing
   • The suppliers was based in Bangladesh
3. Tramalway Industries was initially unaware of this cruelty and has taken the matter seriously and strictly. The company terminated its supply contract and all other engagements with Golden Goods Ltd as it was a clear breach of our supply contract.

Disclosure 412-2 Employee training on human rights policies or procedures

As per the standard, the reporting organization is required to report the following information:

1. Total hours committed towards human rights procedures or policies training in the reporting period.
2. Percentage of employees participated in such trainings during the reporting period.

The CEO in the message to employees has made disclosures as follows:

1. Tramalway Industries has launched employee training program on human rights in the prevailing reporting period. Also it has already completed 100 hours of training on aspects of human rights that are relevant to our operations.
2. 35% of company’s employees have been trained in human rights principles ranging from human dignity to gender equality and respect (Joseph et al. 2016).

Disclosure 417-3 Incidents of non-compliance concerning marketing communications

As per the standard, the reporting organization is required to report the information about the total number of incidents when the company failed in complying with the regulations and/or concerning voluntary codes including promotion, sponsorship, and advertising by non-complying incidents resulted in penalty or fine;

The CEO in the message to employees has made a disclosure that company faced investigation related to its recent marketing communications by the Australian Competition and Consumer Commission (ACCC). The investigation found Tramalway Industries guilty for misleading and false conductance. ACCC issued an Infringement Notice to the company and charged a penalty of $12,600. It has also been stated that the company immediately paid the penalty amount and made modifications in company’s marketing policies for better compliance of all the provisions of Australian Consumer Law (Shuck et al. 2014).

Conclusion on Governance, Ethics and Sustainability

The report has analyzed the compliance of GRI Reporting standards by Tramalway Industries and disclosures of informing about the sustainability measures taken by the company (during a particular annual reporting period). The report also discussed the potential impacts of such compliance on the company and the material measures that the company took towards its effective compliance. The CEO primarily discussed three issues in the message including the child labor at the production facility of one of the supplier, the violation of Australian Competition and Consumer Law and the oil spill at a warehouse that damaged the soil. From the overall analysis, it can be concluded that the company is a sustainable organization and looks forward to providing a more positive GRI report for the next reporting period.

Reference for Governance, Ethics and Sustainability

Benokraitis, N.V. 2019. Affirmative action and equal opportunity: Action, inaction, reaction. London: Routledge.

Burke, T., Genn-Bash, A. and Haines, B. 2018. Competition in theory and practice. London:Routledge.

Carney, M. 2015. Breaking the Tragedy of the Horizon–climate change and financial stability. Speech given at Lloyd’s of London, 29, pp.220-230.

Dare, M., Schirmer, J. and Vanclay, F. 2014. Community engagement and social licence to operate. Impact Assessment and Project Appraisal, 32(3), pp.188-197.

Fuller, S. and McCauley, D. 2016. Framing energy justice: perspectives from activism and advocacy. Energy Research & Social Science, 11, pp.1-8.

GRI. 2020. Global Reporting Initiative (GRI) standards Reporting on sustainability issues that matter most. https://www.wsp.com/-/media/Sector/US/Document/pdf-WSP-Whitepaper_GRI-Standards.pdf

Hřebíček, J., Soukopová, J., Štencl, M. and Trenz, O. 2014. Corporate key performance indicators for environmental management and reporting. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 59(2), pp.99-108.

Joseph, C., Gunawan, J., Sawani, Y., Rahmat, M., Noyem, J.A. and Darus, F. 2016. A comparative study of anti-corruption practice disclosure among Malaysian and Indonesian Corporate Social Responsibility (CSR) best practice companies. Journal of cleaner production, 112, pp.2896-2906.

Shuck, B., Twyford, D., Reio Jr, T.G. and Shuck, A. 2014. Human resource development practices and employee engagement: Examining the connection with employee turnover intentions. Human Resource Development Quarterly, 25(2), pp.239-270.

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