MBA402 Governance Ethics and Sustainability

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1. Social sustainability
2. i) Disclosure 401-1 New employee hires and employee turnover
3. ii) Disclosure 406-1 Incidents of discrimination and corrective actions taken

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

You will be required to include a minimum of 15 references in your Risk Assessment Report at least 5 of which must come from academic journals or textbooks.

Answer:

Introduction

Timber well Constructions is a renowned construction company that operates in Stanwell Council District of Australia. The company is identified as a SME with 58 employees associated with different construction projects and profession.  This sustainability report uses the Global Reporting Initiative (GRI) reporting framework. It also. Identifies recent sustainability challenges encountered by the firm and mentions any relevant government regulations and legal framework. Moreover, report identifies some of actions to mitigate some of the resulting outcomes.

The purpose of implementing the GRI framework is to make an understanding and highlighting the critical sustainability issues in terms of climate change, social well-being and ethical violations. Moreover, creating social, environmental and economic benefits for everyone is also a focal point of the GRI framework. Therefore, ensuring their sustainability and future market orientations the companies intends to incorporate the GRI framework in their sustainability report.

A. Economic Sustainability

According to Carney (2015) it can be argued that climate change and threats are considered to be one of the major problems that escalates financial costs of a business organisation. It can be stated that most of the people think that the big organisations are not affected by the climate change mechanisms but in reality, there are huge amount of adverse impact on the organisation regarding installing environmental sustainability measures. In his study Dietz et al. (2016) opined that the financial assets are treated as liability and rely on high risk value because the organisations do not get any profit from these investments. As a matter of fact, may be the environmental infrastructure helps the organisations to get more sustainable holding in the market, but that market capitalisation can be achieved through different techniques also. Hankinson and Surminski (2018) rightly advocated that the environmental sustainability measures are identified ethically right but in terms of the business perspectives where profit is considered to be the ultimate motive of the organisation investing on sustainable measures don not give them any strategic advantage. In fact, it is more like a one-sided initiative where the company could not get any profit from these measures.

i) Disclosure 201-2 Financial implications and other risks and opportunities due to climate change

It can be seen in case of the Timberwell Constructions as well. As per the Stanwell council proposed Local Environmental Plan (LEP) therefore it costs huge amount of money for Timberwell Constructions to comply with. Moreover, the Timberwell Constructions Company witnesses a cost of $4 million for developing better sustainability framework as per Stanwell Council proposal. It is also important for the Timberwell Constructions is asked to develop such measures within 6 months that is relied on the sustainability framework in terms of higher standards for bushfire safety measures. It creates huge financial risks due to the changes in the climate.

ii) Disclosure 205-3 Confirmed incidents of corruption and actions taken

Australian Competition and Consumer Commission (ACCC) deals with the anti-competition behaviour in the business organisations. Section 45 of the Competition and Consumer Act prohibits all kind of measures that create obstacle to the free and open market competition (accc.gov.au 2018). No such monopoly or business cartel will be entertained in Australian that can perturb the very existence of open and healthy market competition. As a matter of fact, as envisioned by the Australian government, practices like price fixing, restricting outputs or allocate customers, suppliers and territories are against the law.

In case of the Timberwell Constructions, the company was alleged with corruption and bribery. The complaint against Timberwell Constructions was that five of its employees and two of its partners were connected with a public corruption scandal. They offered bribes to council project officers in order to get more contracts and to help push through development applications. After a thorough investigation Timberwell Constructions suspended all the five employees without any payment and for further legal steps the company also terminated partnership with two external partners.

iii) Disclosure 206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices

In addition to this, the Company was also alleged with possessing monopolistic mentality by threatening suppliers and contractors if they involved with any business relation with other companies then Timberwell Constructions would compel to terminate all business connections with those suppliers.

iv) Management approach to economic sustainability challenges

In this context, the management will formulate a measure in terms of taking necessary steps towards sustainability so that no fines would be levied on the organisation An Ethics Committee can be implemented with the purpose to deal with all the sustainability issues of Timberwell Constructions. Furthermore, asking the Senior Financial Officer to audit the expenses in the sustainability measures.

1. Environmental sustainability

With the growing demand of the customer it becomes an important aspect to retain the environmental sustainability across the world. As the business organisations are highly responsible for the environmental damage therefore it becomes important for them to take more responsibility in this regard. Moreover, the environmental sustainability also helps the organisations to maximise the customers by developing the brand image. Henceforth, it can be stated that environmental orientation is considered to be one of the important aspect on which the Australian business organisation must rely upon to fetch all the permissions and benefits in the context of the business market.

Private business organisations has adverse impact on the environmental sustainability to a great extent. It can be stated that the global loss of ecology and biodiversity is not done by the lack of perception regarding the importance of saving the world by an individual but also the deliberate approach of the organisation can also deliver great impression on the damage of environmental diversity. According to Joly et al. (2015) over the last 50 years the private business organisations severely affect the environmental sustainability and it becomes an increasing trend where the organisations either perceive any understanding regarding the significance of ecological sustainability or they put more emphasis on the means of profit than ecological balances. On the other hand, Maron et al. (2015) argued that there are a number of government activities and policies prevalent in Australia that are committed to safeguard the environment and its diverse flora and fauna.

i) Disclosure 302-1 Energy consumption within the organisation

Energy consumption is considered to be one of the major aspects on which every companies must put emphasis. In this context, Timberwell constructions puts more emphasis on the total fuel consumptions. As per the new media release of the company, it can be asserted that Timberwell Constructions will reduce its fuel consumptions up to 50% within the next 50 years.

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

Timberwell Constructions, the company was [3071] alleged to clear area of 0.45 acres that was recognised under the State Planning Scheme of Australia and contained important flora and fauna attributes. This was a clear case of breaching the environmental protection regulations and was fined $200,000. In response to this, the responsible government agency ordered Timberwell Constructions to implement measures of the vegetation management plan with different audit program for the contractors. In this context, a rehabilitation program was also ordered to follow with a cost of minimum $440,000. Due to lack of measures and concerns undertook by Timberwell Constructions the company had to pay huge amount of fines as a damage to the ecological balances.

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

As per the government regulation of the Australian government encompasses an extensive framework with the purpose to safeguard the ecological diversity and the environmental balances.  Energy consumptions and procure a better framework for the next generation is also considered to be important in the context of the Australian government regulatory framework. In this context, the Australian government tries to restrict the business activities of the corporate organisations in order to make it more associated with the environment (Austrade.gov.au 2018). The federal, state and the local government are the respective administer to enforce better environmental protection acts. Therefore, it is highly important for the business organisations to follow the Environment Protect and Biodiversity Conservation (EPBC) Act as they are compelled to abide the government legislation (Business.gov.au 2018). The Department of Environment and Energy is the paramount department that generates the license for doing business in Australia.

iv) Management approach to environmental sustainability challenges

Taking measure such as using tools of less energy consumptions and lack of environmental hazards. Moreover, it is important to imply some eco-friendly policies and encouraging the employees for maintaining environmental sustainability. Furthermore, it can be a strategic measure to appoint an Environment Compliance Officer. The role of this officer will be monitoring the environmental policies of the Timberwell Company and make necessary decisions to ensure environmental sustainability.

C. Social sustainability

Social Sustainability is related to the organisational orientation in order to establish better relationship with the local community. As a result of that it will deliver more strategic market capitalisation for the company as well as encapsulate more customer in the process. Therefore, the social responsibility is environmentally a benevolent practice and at the same time it helps to establish a firm business orientation for the organisations.

Through his research Baldus, Voorhees and Calantone (2015) showed that community engagement in business is a pivotal practice that provided the company a strategy advantage in the competitive market. The strategic advantage can be referred as increasing brand value, making better image in the market and maximising the customers to a great extent. Therefore, according to Habibi, Laroche and Richard (2014) the community engagement is considered to be a sustainability measures on which each and every companies must rely.

i) Disclosure 401-1 New employee hires and employee turnover

In this context, the Fair Work Ombudsman helps the employees to get the minimum workplace entitlements, transparent payments and other regulatory obligations. In addition to this, discrimination in workplace cannot be tolerated. There is the Australian Human Rights Commission Act of 1986 that is contributed to safeguard the employees in case of any discriminatory act is practiced inside the organisation (fairwork.gov.au 2018). This can be treated as the retention policy and combatting with the issues of unemployment. Besides this, the legislative framework also incorporates some provisions regarding the hiring and recruitment process in the organisation. The Equal Opportunity Act of 2010 and the Federal anti-discrimination laws are responsible to bring more efficiency and transparency in the course of the hiring and recruitment process (Humanrights.gov.au 2018). The business organisations are compelled to maintain all these legislative measures.

In this context, some measures are taken into considerations such as the quality of staff, raising the salary of the employees and the roistering day off. The primary purpose of the organisation is to create such workplace environment that is free from any kind of exploitation.

ii) Disclosure 406-1 Incidents of discrimination and corrective actions taken

In the context of Timberwell Constructions, one of the former employees Dennis McCabe lodged a case against the organisation claiming that his co-workers bullied him because of his old age. Most of the staff that the company employed were of an age between 30 and 50. Therefore, an age gap was created between Dennis and the rest of the employees. Dennis complained that there was no healthy workplace environment in the organisation because due to his age he was bullied by his colleagues. A target of humiliating age related jokes made him feeling low and not satisfied do job in Timberwell Constructions. The company management was also reluctant about that and did not take any initiative to make a better and healthy workplace culture.

Fair Work Commission upheld Dennis‘s claim. As a result of the Fairwork ruling, Timberwell Constructions has paid Dennis McCabe $4,400 in compensation. The company is conducting an antidiscrimination training program for all employees.

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

In this context, the role of the business organisations are implementing measures in both traditional and technological means. The traditional measures are related to the hording, flyers and social campaign programs where as the technological means are associated with the social media strategies. In other words Zhang et al. (2017) opined that there are direct and indirect means of community engagement that are significant in the context of strategic advantage of the organisation. As per the report provided by Zhang, Measham and Moffat (2018) it can be stated that the social media can be identified as an important tool to make a bridge between the customers and the business organisation. As a matter of fact, the role of the organisations is to influence the target customers to a great extent so that they will influenced to buy products of the company. Therefore, the community engagement process is defined as a sustainability measure that the organisations must put focus extensively.

In this context, the Timberwell Company puts emphasis on the public relations campaign to demonstrate a better understanding regarding the good corporate citizen framework. Moreover, the company takes initiatives in the company’s Otford Park development site populated with rare wallum sedge frog.

iv) Management approach to social sustainability challenges

Introducing anti-discriminatory policies and provide training in this context will be considered to be effective measures for the management. Moreover, ensuring workplace rights is also an important aspect for the management to follow. A Social Media Officer can be appointed in order to make a better social sustainability approach. In this context, the role of the social media officer will be to make public relations and promote the good image of the organisation.

Conclusion

The following report tries to argue about the Sustainability report of Timberwell Construction. The report clearly includes the economic, environmental and social sustainability factors based on the GRI framework for a better understanding of the relevant issues and the exploring the possible mitigating policies. Therefore, it can be concluded that all the above mentioned strategies will be implemented by the Timberwell Construction and the effectiveness of the policies will be described in the next sustainability report. From that point of view, it is essential and imperative for Timberwell Constructions to maintain a good sustainable mechanism for its future business orientation.

Reference

accc.gov.au, 2018. Anti-competitive behaviour. [online] Australian Competition and Consumer Commission. Available at: https://www.accc.gov.au/business/anti-competitive-behaviour [Accessed 9 Oct. 2018].

Austrade.gov.au, 2018. Setting up a business in Australia - Austrade. [online] Austrade.gov.au. Available at: https://www.austrade.gov.au/International/Invest/Guide-to-investing/Setting-up-a-business [Accessed 9 Oct. 2018].

Baldus, B.J., Voorhees, C. and Calantone, R., 2015. Online brand community engagement: Scale development and validation. Journal of Business Research, 68(5), pp.978-985.

Business.gov.au, 2018. Environmental legislation licences and permits. [online] Business.gov.au. Available at: https://www.business.gov.au/risk-management/environmental-impact/environmental-management/environmental-legislation-licences-and-permits [Accessed 9 Oct. 2018].

Carney, M., 2015. Breaking the tragedy of the horizon—climate change and financial stability. Speech given at Lloyd’s of London, September, 29.

Dietz, S., Bowen, A., Dixon, C. and Gradwell, P., 2016. ‘Climate value at risk’of global financial assets. Nature Climate Change, 6(7), p.676.

fairwork.gov.au, 2018. Fact sheets. [online] Fair Work Ombudsman. Available at: https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets [Accessed 9 Oct. 2018].

Habibi, M.R., Laroche, M. and Richard, M.O., 2014. The roles of brand community and community engagement in building brand trust on social media. Computers in Human Behavior, 37, pp.152-161.

Hankinson, J. and Surminski, S., 2018. MSMEs, climate change risks and insurance: reflections on the use of insurance for climate adaptation. Private-sector action in adaptation: Perspectives on the role of micro, small and medium size enterprises, p.65.

Humanrights.gov.au, 2018. Retention | Australian Human Rights Commission. [online] Humanrights.gov.au. Available at: https://www.humanrights.gov.au/publications/women-male-dominated-industries-toolkit-strategies-2013/chapter-4-retention [Accessed 9 Oct. 2018].

Joly, C.A., Huntley, B.J., Dale, V.H., Mace, G., Muok, B. and Ravindranath, N.H., 2015. Biofuel impacts on biodiversity and ecosystem services. Scientific Committee on problems of the environment (SCOPE) rapid assessment process on bioenergy and sustainability, pp.555-80.

Maron, M., Bull, J.W., Evans, M.C. and Gordon, A., 2015. Locking in loss: baselines of decline in Australian biodiversity offset policies. Biological Conservation, 192, pp.504-512.

Zhang, A., Measham, T.G. and Moffat, K., 2018. Preconditions for social licence: The importance of information in initial engagement. Journal of Cleaner Production, 172, pp.1559-1566.

Zhang, M., Guo, L., Hu, M. and Liu, W., 2017. Influence of customer engagement with company social networks on stickiness: Mediating effect of customer value creation. International Journal of Information Management, 37(3), pp.229-240.