Finnegan Construction Case Study: Sustainability Assessment Report
You are required to watch the following YouTube clips from the GRI Secretariat:
1. The GRI Sustainability Reporting Standards: The Future of Reporting
2. Introducing the GRI Standards
You must also read the case study below based on fictional company Finnegan Constructions.
You must then prepare a sustainability assessment report for Finnegan Constructions
Assessment Case Study
Finnegan Constructions is a residential development company that builds apartment complexes in the Stanwell Council district. It employs 58 male staff from the area with different construction related trades and professions. The local market for these workers is highly competitive and Finnegan has had to employ 12 new apprentices in the reporting period because 17 employees have left, mostly to work for rival organisations or establish their own businesses. The company has increased worker pay rates and implemented a monthly rostered day off to try to retain its existing staff.
Fair Work Commission
One employee, David Dawson, resigned from the organisation and filed a workplace harassment claim in the Fair Work Commission. His claim alleged he was discriminated against by his co-workers on the basis of his age. David further alleged that because he was the only worker older than 50 years of age (everybody else is aged between 30 and 50) he was the target of humiliating age related jokes from the others. The Fair Work Commission upheld David’s claim and ordered Finnegan Constructions to pay him $4,400 in compensation. The Commission also ordered Finnegan to update its anti-discrimination policy and provide anti-discrimination training to all employees. The company has complied with the Commission’s orders.
Australian Competition and Consumer Commission
David also lodged a series of complaints to a number of government authorities about Finnegan’s operations. On the basis of one such complaint, the Australian Competition and Consumer Commission (ACCC) instituted proceedings in the Federal Court against Finnegan Constructions for alleged anticompetitive conduct involving misuse of market power and exclusive dealings. The ACCC alleged that Finnegan became aware that a group of local builders were planning to establish a competing development company. In response to this competitive threat, the ACCC alleged senior Finnegan executives told suppliers and contractors that if they were involved with the new development company they would have their business with Finnegan substantially reduced or withdrawn. The ACCC alleged that Finnegan engaged in this conduct for the purpose of deterring or preventing a new entrant in the development market in the Stanwell district, or substantially lessening competition in that market. The case is listed to be heard by the Federal Court in four months.
State Corruption Commission
David made a separate complaint to the state corruption commission resulting in a public corruption scandal involving five Finnegan employees and two business partners. The complaint alleged that in order to push the company’s development applications through the council approval process, the five employees and two external consultants offered bribes to council project officers. The state corruption commission has charged each of the five employees and one of the external consultants with corruption. All five employees have been suspended without pay by Finnegan pending the outcome of the prosecutions. Finnegan has also terminated its partnership contracts with the two external consultants. Department of the Environment and Energy David also made a separate complaint to the Department of the Environment and Energy. Following an investigation by the Department, Finnegan 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. Finnegan 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.
Public Relations Campaign
These complaints have drawn a great deal of negative publicity. To bolster its public image, Finnegan Constructions has issued a series of media release intended to demonstrate that the company is a good corporate citizen. The first media release explained how an Environmental Impact Assessment performed on the company’s Otford Park development site discovered that 60% of the site was populated by the rare wallum sedge frog. The Assessment estimated the medium density residential development proposed for the site would irreversibly convert the habitat and render it inconsistent with the frogs’ survival on the site. Finnegan is working with Stanwell Council and environmental groups to devise a strategy for managing the proposed development of the site and the conservation of the wallum sedge frog. The second media release explained that Finnegan Constructions is an energy efficient organisation. It included the following energy consumption table for the company in the reporting period based on calculation tools prescribed by the Australian Department of Industry and Science:
Fuel consumption from non-renewable sources 1.0 Gigajoule
Fuel consumption from renewable sources 0.5 Gigajoules
Electricity consumption 2.0 Gigajoules
Note: 1 Gigajoule = 109 joules
The media release also explained that Finnegan had implemented a program to raise its fuel consumption from renewable resources to at least 50% of its total fuel consumption within the next three years. The third media release explained the Finnegan Constructions goes to considerable expense to engage local communities, perform impact assessments, and formulate social development programs for all proposed residential developments. These initiatives include Environmental Impact Assessments, local resident meetings, and local community development programs based on the local community’s need for affordable social housing. The fourth and final media release explained how Finnegan Constructions is working closely with Stanwell Council to comply with the council’s proposed amendments to its Local Environmental Plan (LEP). In response to the warming effects of climate change and the increased risk of bushfires the Stanwell Council proposes to amend its LEP to rezone specific areas in the Stanwell District as ‘bushfire prone’. The LEP amendment is expected to take effect within 6 weeks. Any new development in an area identified under the proposed LEP amendment as bushfire prone 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. Finnegan Constructions has a development site in the Stanwell district that is located in an area that will be rezoned as bushfire prone under the LEP amendment. The new regulations could cost Finnegan as much as $4 million to comply with. The company has engaged an external town planning firm to manage the development application and work with Stanwell Council so as to minimise these potential costs. The town planning firm is charging $50,000 for their services.
The Finnegan construction case study focuses on the three main GRI standards of sustainability namely social, environmental as well as economic sustainability. The GRI sustainability guidelines are being used by the huge number of organizations to report publicly about the effects of these standards on the economy, environment, and society (Secretariat, 2016). In this Finnegan construction case study, the significance of the Australian Competition and Consumer Commission has been mentioned which helps to protect fair trading and promote competition. In this paper, Finnegan Constructions has been chosen to depict the force of GRI standards on the country and civilization as well as on the environment. Pascal's triangle has been illustrated in this section to understand the environmental sustainability process.
A. Economic sustainability
1. i) Disclosure 201-2 financial implications and other risks and opportunities due to climate change
The Sustainability process is categorized into three main blocks i.e. social, economic and environment. Finnegan Constructions should take effective action to meet this target. It is identifies from the Finnegan construction case study that the company has taken many policies and practices to improve its services. Finnegan Constructions has been facing high threats and opportunities due to change in climatic condition. The organization is associated with Stanwell Council in order to meet the terms mentioned in the amendments of the Local Environmental Plan. As per the views of Kelly et al. (2019), it has been observed due to global warming the area needs to have high bushfire safety strategies and it is equally important to bring fire retardant substances.
Due to an increased risk of bushfire in the construction area, the company took help from the council to resolve the risks of bushfire. Due to the change in the tree plantation process that is from flammable trees to inflammable tress might lead to high consequences. Based on the Finnegan construction case study it has been mentioned that the new rule and regulation established by Finnegan might charge $4 million. The organization should concentrate on the price minimization process by linking its business with the Stanwell council. For the development of new advance application and establishment of the new town plan a total budget of $50,000 is required; which will decrease the cost prices of LEP approach.
2. ii) Disclosure 205-3 Confirmed incidents of corruption and actions taken
Finnegan is a construction organization which is been facing huge complexities and consequences due to an increase in corruption activities. An employee named David registered a complaint against the higher authority of the company to the State corruption committee. In addition, it was found that in these corruption mission five employees and two outsiders are committed. It is of utmost importance to punish the members linked with the Finnegan Company who were involved in the wrong activity. In addition, the commission decided to suspend all of them and cancelled the agreement with the external stakeholders.
It is important to bring transparency to the company in order to minimize the corruption and sexual harassment of the employees. In order to bring security and minimize corruption, it is the responsibility of the company to update anti-corruption policies. In addition, it is clear from the Finnegan construction case study that the company is now focusing on the development of quality ethical relations with the whole management team for developing quality business practices. As stated by Anugerah et al. (2020), it is mandatory to encourage the employees and high authority to establish ethical relationships with each other for resolving the conflicts.
iii) Disclosure 206-1 Legal action for anti-competitive behaviour, anti-trust, and monopoly practices
The Finnegan Company is facing huge legal actions as David has a complaint to the government authority about the poor operations of the company. The Australian Competition and Consumer Commission (ACCC) have registered the grievance of David at the Federal Court based on anti-competitive conduct (Campbell, 2019). The Finnegan construction case study was imposed on the company due to maltreatment and mishandling of provided marketing authority; moreover, ACCC suspected that Finnegan is aware of the local builder's group who are planning to construct a challenging company. This is the competitive issue for which the ACCC ordered the higher authority of the organization to not undertake the new development company.
The critical analysis on Finnegan construction case study signifies that the high-level management threatened both the suppliers and contractors. The company gives them warning that if they join the new company then Finnegan Company will not pay their salary on time and might suspend them from the business. Finnegan Company is doing this intentionally to avoid any new organization comes in the market as it will increase the prices and will gradually minimize the competition. Therefore it is mandatory to stop sexual harassment which is a form of discrimination and it is illegal according to federal and local laws of the country. David is also discriminated against on the basis of his age; and this type of activity should be stopped.
B. Environmental sustainability
- i) Disclosure 302-1 Energy consumption within the organization
The energy consumption of the Finnegan Company is well-organized and well established which is efficient in nature. It is the responsibility of the company to review the energy consumption as it is the key threat of environmental sustainability. The estimated Electricity consumption is around 2.0 Gigajoules, where 1 Gigajoule is equal to 109 joules (1 Gigajoule = 109 joules). It has been found the rate of fuel utilization from non-renewable sources is 1.0 Gigajoule and Fuel consumption from renewable sources is 0.5 Gigajoule. Based on the Finnegan construction case study it has been found that the company has implemented various programs to conserve the fuel with the help of renewable resources. Therefore Finnegan constructions can enhance their energy conservation potential using renewable resources and it will help to gain environmental sustainability (standards.sinzer.org, 2019).
The core value of BHP is to accomplish sustainability by bringing the communities and people together to build a quality world. The climate change strategy under BHP states that it will help to reduce the greenhouse gases and will help to manage the climate-related threats. BHP's approach is to minimize environmental impacts and building strong relationships on the basis of respect and honesty (bhp.com, 2019). The main motive of this approach is to protect the health and safeguard the lives of employees working in the company.
2. ii) Disclosure 304-2 significant impacts of activities, products, and services on biodiversity
GRI refers to a global network for discussing sustainability performance as per the demands of the organizations so that their standards are improved (Secretariat, 2020). According to the Finnegan construction case study, the company have released reports in the media about the environmental impacts regarding pollution, conservation of habitat and many more. Finnegan Constructions engages local people, performs social development programs and performs assessments on impacts for proper residential development. Lastly, Finnegan Constructions is working as stated by the Stanwell Council laws on the Local Environment Plan (LEP) to improve the environmental conditions. Stanwell Council has ordered Finnegan Constructions to clear a bushfire prone site under the LEP amendment (Irwan and Utama, 2019). It will cost $4 million for Finnegan Constructions to act according to the new plans.
How Pascal’s Triangle implemented in Finnegan construction case study?
This helps to understand probability, number patterns, drawing on two-dimensional surfaces and many more. Pascal’s triangle has made mathematical calculations much easy than before. The company examined in the Finnegan construction case study analysis uses Pascal’s triangle for the calculation of energy resources (Goswami et al. 2019). It helps to calculate the expenses required for the energy resources so that the budget of the company remains within control. If energy consumption is not handled properly, overall costing will be much higher and the company can face a huge loss. Thus Pascal's triangle is helping to keep the overall budget within a given limit and the company's performance remains unaffected.
Figure 1: Pascal’s Triangle
(Goswami et al. 2019)
iii) Disclosure 307-1 Non-compliance with environmental laws and regulations
David Dawson has complained to the Environment and Ecology department about the damage caused by Finnegan Constructions to the environment. Stanwell Council along with LEP under Disclosure 307-1 can fine if the standards of environmental laws and regulations are not maintained. According to law judicial and administrative sanctions can be issued to the company if it fails to submit the charged amount of fine. This portion of grassland was recognized by the state planning scheme as it contained very important flora and fauna attributes (Widhayati and Sukoharsono, 2017). Finnegan is ordered to do a proper analysis of the vegetation management plan by external experts so that any faults can be rectified beforehand. Stanwell Council along with LEP has also ordered to extend the Finnegan Constructions auditing process with the stakeholders and contractors. The construction company explored in the Finnegan construction case study will have to launch a rehabilitation plan which will cost $440,000.
C. Social Sustainability
1. i) Disclosure 401-1 new employee hires and employee turnover
According to Disclosure 401-1 the total number of employees hired and turnover should be reported according to the age group, gender, and region. These details help the company to develop certain strategies to attract qualified and diverse employees. Optimum use of available labor can be planned. As stated in this Finnegan construction case study a residential development Finnegan Constructions has employed 58 staff members. Due to the high level of competition 17 employees have left the company and joined rival companies. Therefore the company had to take at least 12 new people for the work process to continue (Jose, 2017). High employee turnover rate suggests high levels of dissatisfaction, inequality in the workplace, uncertainty among the employees and many more. Finnegan Constructions has also increased the wages and salaries of its employees and allows a monthly day off to the workers so that the workers do not leave the company. The standards of the work environment have been improved since employee turnover has increased.
ii) Disclosure 406-1 Incidents of discrimination and corrective actions are taken
In context to disclosure 406-1, any legal file can be complained against the Finnegan Constructions Company due to discrimination and actions like analysis of audit in the managing systems, programs can be performed to monitor the organizations, mechanisms of grievance and many more actions can be taken. It has been found from the Finnegan construction case study that an employee named David was harassed and discriminated on the basis of his age. In addition he was humiliated with age-related jokes every time he went to work. The company authorities did not make any effort to punish the employees who were involved in such humiliation. As a result, Finnegan Constructions was ordered to Fair Work Commission to pay David Dawson an amount of $4,400 for recompense. It also ordered Finnegan to upgrade its anti-discrimination laws and provide proper anti-discrimination tuition to the employees. The company has agreed to fulfil the orders for the protection of its employees in the future.
iii) Disclosure 413-1 Operations with local community engagement, impact assessments, and development programs
According to disclosure 413-1 analysis of planning has to be done to understand the drawbacks and benefits so that the local people can be strongly engaged and the expectations and needs can be understood. Due to the environmental factors outlined in the Finnegan construction case study, the company has close interactions with the Local Environment Plans (LEP) and has agreed to develop the rehabilitation plan so that the climate is protected in the grassland area (Yusof, 2018). A certain portion of land occupied by Finnegan was prone to bushfire and harmful for the local people the company has promised to take actions regarding this within 6 weeks. Other than this the company used in the given Finnegan construction case study takes permission from the local community about their needs, dissatisfaction, and performs social development programs for the benefit of the people. Finnegan with the orders of LEP has agreed to build an external town that costs $50,000 to minimize the effects of bushfire. This company has tried its level best to increase its renewable resources by 50% in the coming years so that less pollution is created by fuel consumption.
It can be concluded from the Finnegan construction case study analysis that GRI helps several organizations to create sustainable plans to maintain the quality of the social, environment, government cost and analyze the benefits of it to the reporting organizations. Finnegan Constructions had certain issues regarding environment, work commission, public relations campaign and many more which was solved with the help of LEP and the GRI policies. GRI is a modular, interdependent structure and is the best way of reporting a wide variety of social, environmental and ecological impacts
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