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Sustainability Management Assignment: GRI Reporting Standards by McGruder

Question

Task

You must prepare a sustainability assessment report for McGruder Industries referring to the Consolidated Set of GRI Sustainability Reporting Standards 2016 that specifically addresses:

A. Economic sustainability

i) Disclosure 201-4 Financial assistance received from the government

ii) Disclosure 203-1 Infrastructure Investments and services supported

iii) Disclosure 204-1 Proportion of spending on local suppliers

B. Environmental sustainability

i) Disclosure 301-1 Materials used by weight or volume

ii) Disclosure 301-2 Recycled input materials used

iii) Disclosure 306-3 Significant spills

C. Social sustainability

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

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

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

Answer

Introduction to the scenario of sustainability management assignment
Sustainability management is a dynamic concept that lies at the intersection of business with sustainability. It is aimed at managing the organization’s impact on people, planet and profit for a continued prosperity of all the three aspects. This report on sustainability management assignment provides insight into the sustainability management of McGruder Industries. The report has been made according to the consolidated set of Global Reporting Initiative (GRI) Sustainability Reporting Standards of 2016. The GRI framework provides a common language that can be used by any organization irrespective of its size and structure for reporting the organizational sustainability and its impact (Globalreporting.org, 2020).

Background
The CEO of McGruder Industries has issued a letter addressing the employees regarding the issues that the company has faced in that particular year and mentioned the measures that the company had taken for effectively addressing those issues. The Fabian Ltd. was a supplier to the firm and had indulged in certain malpractices pertaining to child labour. An investigation had been carried out by Australian Competition and Consumer Commission for probing into certain marketing malpractices that the firm was involved in. The issue of oil spill from one of the warehouses of the company was also mentioned in the letter.

Methodology
This report has been made in accordance with the GRI guidelines that would provide the stakeholders a clear idea regarding the operational environment of the firm and the issues faced by the firm. The report provides a pathway for transparent and reliable communication within the organization for better understanding regarding the impact of the company and its processes on the economic, social and cultural environment of the place that the company operates in. The report can be made with different approaches, for example, a specific subject can be concentrated on and then the impact of the firm’s processes on this subject can be accounted for (Batista and Francisco, 2018).

Economic Sustainability
Economic sustainability consists of different practices and techniques that are used by an organization to facilitate economic growth in the long term by optimum utilization of all the resources (Bradford et al., 2017). The value added to the firm, assets and liabilities and the other intangible assets of the firm can be understood by the value indicators of the economic sustainability that can be utilized by the company in the future for fulfilling the needs of the stakeholders. Economic sustainability is a part of the overall sustainability of the firm.

Material Topic

Description

Management Approach

Disclosure 201-4 

Financial assistance received from the government

McGruder Industries has received a financial grant of $15 million from the Federal Government. The firm received the grant after the company had to tackle the oil spill from one of its warehouses. 

The company had decided to utilize this fund to carry forward the biotechnology research of the firm. 

Disclosure 203-1

Infrastructure Investments and services supported

The company had to face an issue with one of the supplier Fabian Ltd. that engaged in child labour. Consequently the contract was terminated and a local supplier was found as a replacement and appointed as the supplier.

The purchase rate went up by 75% and the total weight of the non-renewable materials went down to almost 55 tonnes as a positive result of this decision. 

Disclosure 204-1 

Proportion of spending on local suppliers

The management of the company had selected a local supplier as a replacement for Fabian Ltd. This has resulted in certain benefits for the firm.

The renewable materials of the firm increased to almost 55 tonnes and the recycled materials increased to 25 tonnes. This is an advantageous position in terms of the sustainability of the firm.  

Table 1: Economic sustainability of the firm.

(Source: Created by the Learner)

Environmental Sustainability
Environmental sustainability refers to the set of activities undertaken by an organization for ensuring that the environmental resources of the firm are utilized in a proper manner so that the resources are conserved for usage by the generations to come. The organizations must concentrate on increasing the environmental sustainability in the operations so that they can ensure that there is the least detrimental effect on the environment. The United Nations have stressed on the importance of the environmental sustainability of the firms.

Material Topic

Description

Management Approach

Disclosure 301-1 

Materials used by weight or volume

The firm had formed collaborations with the local firms for increasing the environmental sustainability parameter of the firm by sourcing recycled and renewable materials in the procurement operations of the firm. The firm achieved an increase of 70 tonnes of materials other than the non-renewable materials. 

The firm had decided to employ a local supplier for the procurement of materials instead of Fabien Ltd. The company has seen considerable improvements in terms of its sustainability. 

Disclosure 301-2 

Recycled input materials used

The procurement of the materials from the local suppliers has increased the use of the recycled materials by the company to almost 25 tonnes. This has severe implications in the sustainability parameters of the firm. 

The management had decided to reconsider the use of non-renewable materials in the firm and decided to cut it down. Consequently, they achieved the decrease in the non-renewable materials to 55 tonnes. 

Disclosure 306-3 

Significant spills

The company had to face an oil spill from the warehouse at Flintoff, Victoria. Almost 8 kiloliters of fuel had spilled because of rupture in one of the fuel tanks and the oil spilled into the soil of the area. 

The management had the affected area sprayed with liquid hydrocarbon eating bacteria to remediate the soil. This was done for effectively tackling the situation. 

Table 2: Environmental sustainability of the firm.

(Source: Created by the Learner)

Thus, it can be observed that the environmental sustainability of the firm is interrelated with the economic sustainability of the firm. The Disclosure 203-1 Infrastructure investments and services supplied has been pertinent in this regard. The firm must ensure that it is able to minimise its waste generation, carbon emissions, and other gases in its operations and the collaboration with the local suppliers has been useful in this regard (Boiral and Henri, 2017).

Social Sustainability
The formal and informal processes and operations of the company for ensuring that the present and future generations can live in a healthy manner constitute the social sustainability of the firm. The social sustainability of a firm has a fundamental role in ensuring the business and outside society is positively impacted by the firm (Yadava and Sinha, 2016). The stakeholders of the firm are indirectly and directly influenced by the social sustainability initiatives of the firm and therefore, the firm must concentrate on boosting the social sustainability of its operations.

Material Topic

Description

Management Approach

Disclosure 408-1 

Operations and suppliers at significant risk for incidents of child labour

Fabian Ltd. was a supplier to the company and it was found that the Somalia manufacturing units of the company had used child labour for the productions processes. The situation was not known to McGruder Industries and thus it was a clear breach of the supply contract between the firms. 

The management had decided to terminate the supply contract with Fabian Ltd. and soon recruited a new local supplier as a replacement. The company has been committed towards upholding ethical practices and severing all business relationships with any firm that indulges in unethical practices. 

Disclosure 412-2 

Employee training on human rights policies or procedures

The company has been focused on ensuring that the employees of the company are acquainted with and trained in human rights. A training session was conducted by the firm for this matter and 100 hours of training have been imparted to the employees regarding human rights. 

The management decided on imparting this training to ensure that the staff are aware of the different issues of human rights such as gender equality, human dignity, fair wages, etc. so that they are aware of their rights and can effectively work in the organization and prevent being exploited by their employer.  

Disclosure 417-3 

Incidents of non-compliance concerning marketing communications

The Australian Competition and Consumer Commission had done an investigation on McGruder Industries regarding the misleading claims in the recent marketing communications of the company. The firm was found guilty of the allegations.  

The company was issued an infringement notice and had to pay a penalty of $12600. The company soon updated the marketing policies to ensure full compliance with the Australian Consumer Law provisions. 

Table 3: Social Sustainability of the firm.

(Source: Created by the Learner)

Conclusion
The report has been aimed at evaluating all the efforts and initiatives of the company for maintaining sustainability in terms of economic, environmental and social aspects. It can be concluded that the company has been able to maintain those according to the GRI standards. The company has resolved its economic sustainability issues by dedicating the government grant for biotechnology research and development. Environmental sustainability was ensured by collaborating with a local supplier that helped the company to effectively lower the use of non-renewable materials and increase the use of recycled materials. The company had undertaken the health and welfare centre project and human rights training session for ensuring social sustainability.

References
Batista, A.A.D.S. and Francisco, A.C.D., 2018. Organizational sustainability practices: A study of the firms listed by the corporate sustainability index. Sustainability, 10(1), p.226.

Boiral, O. and Henri, J.F., 2017. Is sustainability performance comparable? A study of GRI reports of mining organizations. Business & Society, 56(2), pp.283-317.

Bradford, M., Earp, J.B., Showalter, D.S. and Williams, P.F., 2017. Corporate sustainability reporting and stakeholder concerns: Is there a disconnect?. Accounting Horizons, 31(1), pp.83-102.

Globalreporting.org, 2020. Standards. [online] Globalreporting.org. Available at: [Accessed 19 October 2020].

Yadava, R.N. and Sinha, B., 2016. Scoring sustainability reports using GRI 2011 guidelines for assessing environmental, economic, and social dimensions of leading public and private Indian companies. Journal of Business Ethics, 138(3), pp.549-558.

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