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Key Topics
Requirement
Timberwell Constructions Sustainability Report
Solution
Introduction
Timberwell Constructions is one of the reputed Real Estate organization that is engaged in building apartments in Stanwell Council District. It is a small scale business that operates with 58 male personnel for its different construction related operations. Due to competitive marketing environment in that region, Timberwell is facing workforce trouble as they need more employees (at least 12 apprentices) for carrying out the business successfully and to cover up those 17 employees who recently left for joining in rivalry firm or to start their own venture in this field.
Scenario-
The organization is facing troubles on different grounds like Workplace harassment, misuse of market power, manipulated dealings, unfair industrial practices, corruption, environmental damage, window dressing and many other major and minor allegations. The company is now struggling in business and they need to recover from it.
Purpose of the report-
The purpose of this report is to prepare a Sustainability Report for Timberwell Constructions under GRI standard guidelines to cover the various aspects of the allegation lodged and pointed at organization to find to what extend the organization has violated standards and what should be the corrective actions for these.
GRI Standards-
Global Reporting Initiative is an independent organization that provides the guidelines and norms prescribed for economic sustainability, environmental sustainability and social sustainability. The purpose of this organization to bring up humanity in global community and build an environment where there is equal opportunity for everyone in matters of economy, environment and society. GRI standards are the first common standards followed for sustainability reporting. The standard is a modular and inter-related structure represents range of economic, social and environmental impacts. [Kolk, A. (2003).]
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Management Approach of Timberwell-
From the case study, it is clear that workforce were not happy with the treatment of management which is why almost 1/3 of workforce left organization and huge vacancy arose. The company tried to cover it up with increase in compensation and changing roaster plan with day off system. From the case study, it seems that there were no fair management system which led the organization to follow up the allegation with penalty or suspension. Though in media release it has been claiming to be environmentally and socially sustainable but people have already made negative impression on their mind.
Sustainability Assessment
Sustainability reporting is a broader assessment report of an organization which not only includes economic performance but also environmental, social and corporate governance performance. It is not meant for collecting data and reporting it to the concerned authority rather it is the method to contribute in sustainability development. The following Sustainability reporting is done for Timberwell Construction. In this report, we have taken economic, social and environmental sustainability performance as per the data available.
Economic Sustainability
Disclosure 201-2 Financial Implications and other risks opportunity due to climate change
Timberwell has good number of opportunity in Stanwell Council region as the organization has got the opportunity to develop Otford Park site where there is already existence of rare category wallum sedge frog so that proper residential complexes can be built.
Timberwell may have to incur a rehabilitation cost of $440000 against the review of its vegetation management program.
Its external town planning with the support of Stanwell council may cost the organization around $50000 for the service offered in development planning.
Overall the organization needs to incur expenses in their development planning which are mostly capital expenditure in total (at least 440000+50000= $490000) There may be more operational expenditure in case of bio-diversity and ecology rules in future date which can be predicted rightly after environmental audit. The demand for the residential houses in flora and fauna and vegetation area is decreasing day by day to balance the environment and bio diversity. So in future, it will bring reduction in business. Even the suppliers and contractors have withdrawn in the future development plans for Timeberwell. [O'Dwyer, B.,et.al2005]
Disclosure 205-3- Confirmed incidents of corruption and actions taken
One of the employee named Dennis complained against Timberwell to State Corruption Commission that the organization is involved in corruption activities. As per his complaint lodged, 5 Timberwell employees and 2 business partners were engaged in this corruption act.
The corruption took place these 5 culprits were trying to give bribe to the Stanwell Council members to pass the development plans quickly without much verification.
Action taken- The State Corruption investigated the matter and found 6 of them guilty of the corruption i.e. all employees and one strategic partner. Timberwell suspended all the employees who were doing such act and also broke the partnership with those two consultants.
Disclosure- 206-1- Legal actions for anti-competitive behavior, anti-trust, and monopoly practices
The organization has been filed with a number of complaints against this disclosure. The same employee (Dennis) registered it with various Govt. departments. It is the Australian Competition and Consumer Commission (ACCC) took the charge to investigate the matter and sue in Federal court for its anti-competitive behavior like misusing market strength and manipulation in client dealing.
The executives were found to be guilty for forcing the suppliers and contractors not to form any competitive firm to reduce the business of Timberwell using either coercive power or expert power. [Gray, R.,et.al2002]
The organization was also brought under notice for deceiving new players to come into market to lessen the competition. They were able to do it with the support from Stanwell council.
Action- The case is still pending in Federal Court and no such actions taken by the organization to justify their authenticity to this complaint.
Environmental Sustainability
Disclosure-302-1- Energy consumption within organization
The organization in its 2nd media release claimed that it is an energy efficient organization. The claim made so on grounds of the prescribed limit of energy consumption from renewable and non-renewable energy resources and electricity consumption given by Australian Department of Industry and Science. The company has disclosed the use of energy in the reporting period. Action- In another media release, they have claimed to achieve at least 50% of total energy consumption from the Renewable energy within the span of 3 years. At present, it is around 33% of total Fuel consumption.
Disclosure 304-2- Significant impacts of activities, products, and services on biodiversity
Dennis complained to Dept. of Environment and Energy that the current projects of Timberwell is putting ecological balancing in coast grasslands in trouble which is why it had to pay fine for it to clear the area.
The new development plan of the organization proposed for medium density population in that area where rare category frogs are living and with the constructions, they may go extinct. Only after rehabilitation to Wallum Sedge frogs, the project progress is possible.
Action-The Stanwell council and Timberwell is working towards amending Bushfire zones rules and regulations amendments, so that the organization can give Bushfire safety to the residential people to avoid hazard.
Disclosure 307-1-Non-compliance with environmental laws and regulations
The Department of Environment and Energy filed a case against Timberwell for clearing the ecological community in coastland around 0.45 hectares area. The organization had to pay $200000 for compensating this environmental violation.
The organization had to incur an expense around $440000 for rehabilitation plan as per the review of vegetation management under State Planning Scheme. This much amount is charged for balancing flora and fauna in that location.
Action-1-The organization with support of Stanwell Council is working towards the rehabilitation of wallum sedge frog which were found in the new development plan site of Timberwell.
•Action-2-The organization is also working on amending Local Environmental Plan (LEP) especially for the areas which are prone to bushfire. This new regulation will cost around $4 million along with other service charges up to $50000. The new regulation will come into action around 6 weeks. [Perrini, F et.al2006]
Social Sustainability
Disclosure 401-1-New employee hires and employee turnover
The current workforce is 58 and entire workforce is male only. There is no place for women employees within the organization.
Due to internal management problem and competitiveness, 17 employees were reported to leave organization and 12 enrolled on apprentice basis.
The age group of employees in Timberwell is between 30-50 years. Only one employee is above 50 years of age and he is Dennis who brought all the allegations under scanner.
The circumstances is saying that Timberwell doesn’t have a balanced workforce system and there is a high level of dissatisfaction and uncertainty in working environment. It may be due to the rough attitude of the executives on employees or the compensation issues which is affecting the workforce balance. The company is having deep trouble as the rate of leaving is more than rate of joining. No reporting was done for the age group of employees left or joined but as they have only 30-50 years employees, so we can assume it under that slab.
Action- At present the company is looking for new trainees to join the organization and also trying to keep the key personnel with monetary incentives. Any dissatisfied employees are given compensation as per court summon.
Disclosure 406-1 Incidents of discrimination and corrective actions taken
The senior most employee of Timberwell Dennis complained about the remuneration system of the company which is not fair to employees. [Guthrie, J.,et.al2008]
The discrimination regarding workforce, commission, recognition etc. are taking place more often. Younger employees are treated well while the elders are not treated fair.
Comments were made to Dennis on his age and seniority by his colleagues and no such actions were taken by the executives to deal with this unfair treatment.
There were no anti-discrimination policies and training to the employees here thus Fair work Commission has passed an order to start these two programs in the organization soon.
Moreover the organization is also obliged to pay $4400 to Dennis against the discrimination faced on his work.
Action- Apart from the above, Timberwell has taken steps towards increasing the pay rate and to give a day off monthly apart from other leaves to reduce the work burden.
Disclosure 413-1-Operations with local community engagement, impact assessments and development programs
Timberwell has been claiming to be a good corporate citizen from the media releases it did. These media releases took place on seeing people have been perceiving the image in a negative manner.
In the first media release, it claimed to be a partner in development for Otford Park where the rare species of frog are found in large number. It is working with Stanwell Council and other eco-friendly groups to provide habitat for Wallum Sedge Frogs prior to start developing medium density residential complex.
In its third media release, it has mentioned about engaging local community and will assess impact and will conduct social development program for all the proposed residential complex. To prove engagement with local community, it is going conduct meeting with the community people to know the need of them regarding housing. The organization will also participate in local community development program. [Dumay, J et.al2010]
Action- Timberwell has also promised to conduct environmental assessment and impact assessment from the residential complexes it is building. For ex- They have calculated the use of renewable fuel consumption will be 50% within 3 years and they have taken steps to conserve the rare species of frogs which are the example of their assessment plan.
The company has also assess the impact of climate change and bushfire on the residential complex under its new development plan. It has requested LEP to amend its acts and declare the area as “bushfire prone zone.”
Actions to be taken- The new area which is declared as bushfire prone zone needs high degree of safety and security which the organization will take into consideration. These are- distance between two buildings and boundaries and use of fire retardant materials to make complex.
Department of Environment and Energy has taken action against Timberwell for deviating the bio-diversity rule for the residential projects on which actions were taken and proceedings for penalty done. Even further audit trial will start to find clearer picture about the vegetation planning done by this organization.
Limitation of study- The above sustainability report doesn’t take all the disclosures as mentioned in GRI standard due to unavailability of information. The reporting has been done as per the information provided and media releases. The authenticity of information can be proved only by undertaking independent examination of the report materials mentioned above.
Conclusion
GRI Sustainability Reporting of Timberwell has done through three important grounds which are economic, environmental and social. The reporting guidelines are followed as per the GRI standard prescribed as per 2016 standard reporting. From the information available, this sustainability reporting has been done which draws out the following facts about the Real-estate organization-
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Economic point of view- The organization has been facing the financial obligations from different parties due to violation of basic principles. Moreover as the competition in Stanwell district for real estate market is increasing the organization is facing business risk more and more. To avoid the risk and reduce the intensity of competition, the company followed unethical practice like corruption which caused penalty and negative image of organization. The company also used market power to keep the new players out as a sign of anti-competitive nature. In this criteria, the organization scores low. [Brown, H. S.,et.al2009]
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Environmental point of view- In matter of energy consumption, the organization is working towards use of more renewable resources. It is hoping to reach 505 mark in next 3 years in renewable fuel consumption which is a positive point for them. 2/3 instances the organization has given importance to environment which are conservation of Wallum Sedge Frogs and bushfire prone zone but in case of green coastland, it was found to violate ecology for which it had to pay fine. Thus in this ground, it can be put under moderate result. [Higgins, C.,et.al2018]
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Social point of view- The organization despite having small workforce it is facing a lot of trouble in employee’s retention. The organization is having high attrition than enrollment. There is several complaint against compensation, employee treatment and other discrimination. Even the company doesn’t have a single female employee which is showing an orthodox workforce management of Timberwell. The company had to pay fine for the bad treatment to one of its senior employees. On the other hand, towards local community and society development, is working with various new development plans. It is working with other independent bodies to amend the polices, society housing development and improved building material to give better residential experience to local community. In this case also it scores low as it is their own press release which authenticity has to be proved.
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Overall Performance- The purpose of this report was to determine whether Timberwell is contributing towards sustainability development or not. From the above three analysis we came to know that in 2 out 3 barometer it scored low and in case of economic point of view it scored moderate. It means the organization has not contributed well to sustainable development. In none of criteria, it stood positive which is why it has created a negative image in public.
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Suggestions- The organization should start fulfilling the requirements of disclosure as soon as possible. It should not follow corruption practice, exploitation to workforce and environment, coercive power for business etc. so that again it will get the earlier position as it started few years ago.
References
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Kolk, A. (2003). Trends in sustainability reporting by the Fortune Global 250. Business strategy and the environment, 12(5), 279-291.
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Perrini, F., & Tencati, A. (2006). Sustainability and stakeholder management: the need for new corporate performance evaluation and reporting systems. Business Strategy and the Environment, 15(5), 296-308.
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Guthrie, J., & Farneti, F. (2008). GRI sustainability reporting by Australian public sector organizations. Public Money and management, 28(6), 361-366.
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Dumay, J., Guthrie, J., & Farneti, F. (2010). GRI sustainability reporting guidelines for public and third sector organizations: A critical review. Public Management Review, 12(4), 531-548.
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Brown, H. S., de Jong, M., & Levy, D. L. (2009). Building institutions based on information disclosure: lessons from GRI's sustainability reporting. Journal of cleaner production, 17(6), 571-580.
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Higgins, C., Stubbs, W., & Milne, M. (2018). Is sustainability reporting becoming institutionalised? The role of an issues-based field. Journal of Business Ethics, 147(2), 309-326.
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Gray, R., & Milne, M. (2002). Sustainability reporting: who's kidding whom?. Chartered Accountants Journal of New Zealand, 81(6), 66-70.
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O'Dwyer, B., & Owen, D. L. (2005). Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation. The British Accounting Review, 37(2), 205-229.
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