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Sustainable Development Assignment On Downer Construction Triple Bottom Lines Strategy

Question

Assignment requirements : Write your assignment in a report format using academic language. Use your research (correctly in-text referenced) to provide evidence and support for your beliefs and arguments. Your report must have the following sections:

  • Title
  • Introduction
  • Different sections for the 5 different reporting requirements. You may use subheadings if required.
  • Reference List

Answer

Executive summary: The concept of this sustainable development assignment is to deliver guidelines that have been provided by the three bottom lines framework for the measurement of this concept has been discussed in the report. The basic elements that formulate the principle of sustainable development and TBL are identified.

Further these concepts have been identified and analyzed in the basic policy making and project designing and management of a construction company Downer. In the last sections, the challenges to this concept have been presented.

Introduction:In the modern times where everything is changing at a very fast pace the need for a raised concern for environment has become very important. To inculcate the ideas of environment protection in the areas of economics and business, the concepts of Sustainable Development and Triple Bottom Lines were introduced.

The report aims to understand these concepts in the initial sections where each of the two concepts have been defined and the key elements that form the basis of each one of them have been identified. The concept has further been developed by taking the case study of a construction company and making a brief sustainability report on them.

General concepts of triple bottom lines (TBL) and sustainable development (SD)
According to Onat, Kucukvar and Tatari (2014), with the rising environmental pollution, global warming and the other increasing threats to our climate, the cause of adopting environment friendly modes of working are becoming the primary concern in almost all sectors. When it comes to finance and accounting, the concept of development without causing much harm to the environment is becoming popular day by day.

Definition of Sustainable Development
Sustainable development is an idea that most companies are following all across the globe. Sustainable development, abbreviated as SD, refers to the system and process of development that makes sure that the environment is not harmed.

There are four general concepts that need to be taken care of when working on the idea of sustainable development:

  1. Environmental: Ecology or our environment forms the basic idea on which the concept of sustainable development works. The basic idea is that in the process of working on a developmental project, the environment, that consists of basic elements like air, water and soil should not be harmed. It also broadens its concept to include human ecology and states that the ethics and values the govern humanity are also of primary importance (Tatari, Kucukvar and Onat, 2015).
    Another very important element that is included in environmental aspect of sustainable development is sustainable agriculture. This refers to indulging in environment friendly agriculture by adopting practices like permaculture, mixed farming, agro-forestry, multiple cropping and crop rotation.
  2. Economics: As stated by Wilson (2015), it directs at providing better life facilities to everyone across the globe by making efforts that are directed on increasing the gross domestic product. In the long term, the idea is to provide better facilities to human being and also taking due care of nature.
    There are a number of concepts that are included in the economic aspect of sustainable development:
    • Environmental economics: It includes the biosphere of the earth and human interaction with its various elements.
    • Energy: Using renewable sources of energy to reduce environmental pollution.
    • Manufacturing: It includes the concepts of Green manufacturing and Distributed manufacturing.
    • Technology: Using technology to make lives of people better and reducing the harm to environment.
    • Transport: Reducing the amount of greenhouse gases by practicing Sustainable transport.
    • Business: The idea is that corporate sustainability can be defined only by the way a company uses its natural resources (Gou and Xie, 2017).
    • Income: Employing sustainable development practices that are aimed at reducing poverty.
    • Architecture: Employing ideas of New Urbanism and New Classical architecture comprise of sustainable agriculture.
  3. Politics: The idea of politics refers to the concept that the indicators of sustainable development are the scientific constructs that affect the practice of public policy-making. These scientific constructs should aid the practice of measuring the efficiency of the public policies by developing metrics for the purpose (Ahi and Searcy, 2015). The six core areas of politics that are under constant observation are international trade and investment, climate change and energy, economic policy,measurement and assessment, the role of communication technologies in sustainable development and natural resource management.
  4. Culture: The concept of culture has been added to the idea of sustainable development and they practice demands consideration for the social norms, values and traditions of local people for making sure that sustainable development.
    According to Glavas and Mish (2015), the elements that have been considered as key to defini9ng culture in this perspective are practices,material expressions and discourses which are the means of understanding the continuity and discontinuity in a society

Definition of Triple Bottom Lines
TBL or Triple Bottom Lines is a concept that has been adopted by accounting systems all over the world. The term was coined by business writer John Elkington in 1994. It refers to an accounting framework that aims at taking the social, environmental and financial aspects together in order to make the idea of sustainable development a reality by providing methods in which it can be practically applied (Rambaud and Richard, 2015).

The basic idea on which TBL operates considers three bottom lines, popularly referred to as the three P’s:

  1. People: People refer to the first P and consist of the social aspects of the development. The idea is attributing value to the human capital by implementing fair labor laws that are in accordance to the social needs of a place in which the finance is being undertaken or the business is operated. It includes basic ethical rules of managing labor like not employing children, providing safe environment to workers, fair wages, maintaining fair work hours and not undertaking practices that would exploit the labor in any way (Svensson et al. 2016).
  2. Planet: The second P refers to planet and implements that in order to run a business, the responsibility of the business owner towards the planet should be understood as well. The idea has been developed to reduce the ecological footprint and to ensure that the harm that can be caused to the environment is reduced to minimum. The basic idea that id followed here is called ‘Cradle to Grave’. It says that it is the responsibility of the corporates to ensure that from the beginning of a process to the end, there should be a number of things that need to be taken care of. As per Isil and Hernke (2017), they include disposal of waste, using non toxic and degradable products and utilizing renewable energy sources as much as possible.
  3. Profit: The third P stands for profit and deals with the matters of money and finances. It states that even though all the other two P’s are taken care of, the company that is undertaking the construction or developmental work earns maximum profit. The profit here does not include the cost of inputs and the capital that has been tied up. It has been stated that profit not only includes the economic or monetary benefits of the organization but also includes the idea that after a business venture has been taken up, the entire society around it should earn profits from it (Ji, Gunasekaran and Yang, 2014).

Significance of TBL in sustainable development
The principles of TBL and the idea of sustainable development are interdependent. To explain the interrelation between the two in simple words, it can be said that the concept of TBL provide the basic methods of calculating and analyzing the level of sustainable development that is practices by organizations and governments all over the world.

Why is TBL better than traditional economic bottom line
The concepts of TBL are favored over the traditional methods of measurements due to the reason that TBL presents a holistic approach to the idea of sustainable development. While the traditional methods take only the economic concept into account for measuring profitability, TBL considers all the other aspects and presents an all-inclusive report.

The method in which sustainable development is measured includes the basic methods of measuring the below mentioned factors of development in general:

  1. Economic: The economic gradient of sustainable development is managed and calculated on a governmental level. It is calculated on the basis of the amount of taxes that have been paid to the government of a country in a financial year (Schulz and Flanigan, 2016). The amount of taxes reflects the social aspect of sustainable development by presenting statistics about the average income and spending of the people of that country and hence calculates if the level of poverty has fallen or risen in that period of time.
  2. Social: The social aspects are a reflection of the life style of the people that are a part of a social community. It can be calculated and determined on small scale, by making an analysis of the social conditions of a community, to large scale that includes the social report of a country. The basic elements that determine the social condition include indexes of social structure like salaries, training, welfare. It includes data and conclusions like does the average salary of the majority puts them above of below poverty line for that country, how many people are involved in skilled jobs and do people have basic elementary training for the job that they do and is the authority that is responsible for taking care of the employees doing enough for their welfare. This covers all the aspects of employments from the companies to employers and also the employees and ensure fail work policies for all of them (Tate and Bals, 2016).
  3. Environmental: The environmental aspect of sustainable development is calculated by collecting data on the resources that are obtained naturally and their usage patterns. Based on the information, it is calculated that is the amount of resources that has been used for taking up a developmental project is according to the availability and the need of the project. According to Bals and Tate (2017), depending on these calculations, it is reported that if the resources have been utilized efficiently or if they have been wasted by the constructors. It depends on the amount of the specific resources that are available in the area where the project is being undertaken.
  4. Food: A very important aspect of sustainable development and the human factor that is considered in it is the level of food security that a community and its members enjoy. It is to make sure that all people are provided with the amount of food that is enough to supply their basic nutritional needs. In case the individual needs are not met, it is considered as a situation of lack of food security and can be an important parameter of famine (Martens and Carvalho, 2017).
  5. Agriculture: Agriculture is directly related to food but the idea od sustainable development is applied to agricultural practices in a different way. The practice of sustainable agriculture refers to the inclusion of biodynamic farming like crop rotation, organic farming, reduced use of chemicals other processes like processing and storage of food etc.
  6. Education: Education includes the skills and knowledge index of individuals. It is calculated on the basis of the number of people who have received basic elementary education and the number of literate and Illiterate people in a population. It also involves consideration about the fact that how many people are skilled and how many have no particular skills. These factors are responsible in determining the social and economic status of people (Dyllick and Muff, 2016).
  7. Arts: Arts are also considered very important to the idea of sustainable development because it directly reflects the happiness indexes of a community. Practicing arts is a calculation of rejuvenation and stress management methods that a community practices by the use of art forms like music, painting and other creative means (Malmqvist et al. 2018).
  8. Governmental: The governmental aspect includes the policies that have made for the people. These include the policies that have been made for the benefits of people like minimum wages policy, right to education and food security etc. It also includes the responsibilities of citizens like payment of taxes and protection of public property. According to Kibert (2016), the governmental aspect is also responsible for ensuring that the implementation of these policies is done properly and violators are punished.

Strong and weak sustainability
Weak sustainability is defined by human and natural capital. Human capital refers to the design, plan, human resources and other aspects of a construction that are developed by human beings. Natural capital refers to the elements or materials that are obtained by nature to take up a construction project.

Strong sustainability includes the idea that there are certain processes that cannot be undertaken by human beings in any way and it suggests that the process of constriction should be taken up in a way that the processes are distorted the least. It includes replacement of fossil based fuels, ozone layer reconstruction and emission of greenhouse gases from the atmosphere.

Sustainable Construction (SC) and Its Key Considerations
What is Sustainable construction?
Sustainable construction or Green building is a concept that includes the idea of sustainable development in the process of construction. The basic idea of Sustainable construction is that all the aspects and steps that are involved in the process of constructing something should include the basic principles of sustainable development. The planning, design, construction, operation, maintenance, renovation and demolition of any public or private construction should be done in a way that environmental harm is minimized (Hong et al. 2015).

The important idea that should be discussed while undertaking Sustainable Construction is to consider the three P’s and including the various aspects of it in the process of construction. An ideal sustainable construction project should make sure that all the given aspects are covered:

A. People

  1. Corporate Responsibility: The corporate have the responsibility of selecting the technicians that will be involved in the construction process. Incase of sustainable construction, they need to make sure that the selection of contractors, suppliers, manufacturers and designers is done in accordance with the impact on the environment so that everyone who is affected by the environment can perform their duties in a way that it is protected (Govindan, Shankar and Kannan, 2016).
  2. Community: As the process of construction in a sub-urban setting does not affect only those who live in the surrounding areas, but also in other parts of the town or city, it is very important that the process of construction does not affect the life of these people. The basic ways in which the local community can be affected by a construction in a positive manner is by employing local labor, contractors, designers and material as well as suppliers in the process of construction. It also includes the effects that the process of construction will have on people who are not directly involved in it. This can include using transport methods that are not contributing to air pollution and employing machinery that does not produces a lot of noise (Wu et al. 2018).
  3. Accident and Incidents: Another very important factor that needs to be taken into account here is providing a safe work environment by ensuring that all measures are taken to avoid accident on a construction site. By creating a work place that is not prone to accidents, the security of labor is ensured. In case this aspect is ignored, it can lead to a very wrong impression on the workers followed by a very strong sense of insecurity. It will also lead to a fine for the constructor for indulging into malpractices (Wu, Zuo and Zhao, 2017).

B. Planet

  1. Environment: It needs to be ensured that all basic steps that have been taken up in a construction are in harmony with the environment of the vicinity. The practice of protecting the closest visible environment should be performed with all seriousness at every step of the construction. It starts from planning stage, continues through design, construction and eventual completion. As per Hwang and Shan (2018), water management, waste reduction and recycling are the key concepts that develop the idea of environmental sustainability in construction process.
  2. 2. Selection of Materials: This is the process that has been discussed in the most details when it comes to sustainable construction. It simply includes an incorporation of the choice of materials that are most environments friendly and also good for the finances of the constructors (Tabassi et al. 2016). It also includes basic practices like:
    • Recycling concrete and copper slag
    • Using fire-resistant steel for roofs, lift shafts, bathrooms, frames, boards and wherever possible
    • Constructing Drywalls with plasterboards, curtain walls, glass and cladding, metal or glass parapets

C. Profit

  1. Calculation of cost and profits: It should be made sure by the company that is undertaking the construction project that the profits are ensured even when all the aspects of sustainable construction are followed. This should be calculated by the monetary benefits of the company.
  2. Overall profits: In case of sustainable constructions, the profits should not only be limited to monetary benefits of the company but the project should also be good for the overall development of the community and the planet in general.

Sustainability Report for Construction Company-Downer
Organizational overview Downer is one of the leading construction companies of Australia that undertakes their construction work in taking the environment and the guidelines laid by the concept of sustainable development into complete consideration. The company provides services that include construction of transport modes like roads, utilities like mobile phone towers, engineering based structures like buildings, railway lines and also operates mining operations.

According to Hu and Li (2016), with a work force of more than 20,000 people, Downer has worked on a number of construction projects across Australia, New Zealand, South America as well as many parts of South Africa. The company has undertaken a large number of road construction projects and is responsible for laying 33,000 km of road networks in Australia and more than 25,000 km of road in New Zealand.

According to Hu and Li (2016), with a work force of more than 20,000 people, Downer has worked on a number of construction projects across Australia, New Zealand, South America as well as many parts of South Africa. The company has undertaken a large number of road construction projects and is responsible for laying 33,000 km of road networks in Australia and more than 25,000 km of road in New Zealand.

The company ensures that all the stakeholders that are interested or directly related to their construction projects are actively involved in the decision-making processes. This is done by performing customer surveys and meetings through social media platforms and other online as well as offline methods. The projects are undertaken in terms of design and implementation by keeping the community needs and resources in mind and engaging all the important and influential members of the community who represent the opinions and people of that community, directly into the project (Muller, Muller and Pmp, 2016).

The company also maintains a transparency policy that ensures that all the operations and the details of each one of them are available to all governmental and non-governmental organizations. The media is also engaged and the reports are also available to media for publishing and presenting to the general public.

Strategies and Analysis: In order to make the idea of sustainable development a practical reality, there are a number of strategies that are employed by Downer in their work process. It has been made sure that all the aspects of the concept are thoroughly covered to make sure that neither the people, nor the planet is affected in the process of construction while keeping the profits high for everyone (Hardin. and McCool, 2015).

The strategies that have employed by the company to make sure of this are:

Employee satisfaction:The employees of Downer have been identified by them as the biggest resource of the company. There are a number of general concepts that they have included in their system to make sure that the company understands and provides their employees the best.

  • Local Labor: According to Langford et al. (2014), the company has made sure that all the workforce that has been engaged by them consists of local people. For this, they have hired the best available people from the local community at their numerous locations of operation.
  • Gender diversity: The employees at Downer are not only diverse when it come to region, but also gender. In a revised recruitment policy, Downer has aimed at employing at least 20% women in their company at all the locations by 2020 (Walker, 2015).
  • Generation diversity: Downer believes that diversity also includes the idea of generation and being diverse means including people from various age groups in their work force, which can also add to the experience of the company and its people (Kelly, Male and Graham, 2014).
  • Safety: In order to ensure that all the employees are provided with a safe work environment, there are a number of measures that have been taken by them. Elimination of diesel from cold mix asphalt is an example of one of them.

Environmental concerns: With complete consideration for the people, Downer has also included the concept of protection and preservation of the planet into their work ethics completely. The aim is to reduce environmental damage that happens with the various constructional projects and to ensure that the planet is a better place after a construction is complete, rather than exhausting it after the process (Iqbal et al. 2015).

  • Priority to Renewable sources of energy: Downer ensures that the renewable sources of energy are used as much as they can be for meeting the basic energy needs of their customers as well as at their construction sites. They are harnessing the power of wind and water energy to the maximum to ensure that environmental pollution from fossil energy is reduced to minimum.
  • Using environment friendly products: There are a number of alternatives that Downer uses in order to make sure that minimum energy is consumed by the projects that they undertake. As an example, they have recently taken up the contract of replacing the street lights of Melbourne by the LED lamps that consume about 20% less electricity (Hu and Li, 2016).
  • Lower Carbon and GHG emissions: The projects that have been undertaken by Downer in areas of construction and mining are aimed to be developed in a way that carbon and other greenhouse gases are emitted in the least quantity. This has been achieved by creating project designs with the idea of fewest emissions in mind (Wu, Zuo and Zhao, 2017).

Involvement of the community: Downer aims to progress with the community and needs to ensure that all the people who are directly or indirectly related to their projects are affected in a positive manner by their efforts of ensuring a wholesome sustainable development

  • ATSI Program: Downer has recently launched their ATSI or the Aboriginal and Torres Strait Islanders in Mining program in Blackwater. The program was designed to provide voluntary training to people to work in the area of mining by making sure that community participation is increased to the maximum (Kibert, 2016).
  • Support for non-profit organizations: Downer engages a number of non-profit organizations in their work process for processes like collection of data and implementation of processes. It is to make sure that all the needs of the local community are met while a construction project is undertaken
  • Extending support to various community based initiatives: Downer has extended their participation to a number of local and community based projects that aim at promoting sports and the development of youth oriented practices. They have participated in the projects of National Youth Mental Health Foundation and have officially sponsored Sunshine Coast Lighting, which is one of the official teams of an Australian Netball championship (Bals and Tate, 2017).

Organizational Profile:The organizational profile that Downer wishes to maintain aims to involve all the major elements of organizational structure in such a way that they can maintain an environment friendly profile that includes all aspects of sustainable development.

  • Involvement of Customers: The involvement of customers is ensured by involving their opinion in all the major projects that are undertaken by the company. It is done by conducting surveys, organizing meetings and gathering opinions through social media and other available online portals.
  • Involvement of Communities: Downer is working on a number of project specific plans that aim at engaging community through the involvement of local media. According to Martens and Carvalho (2017), the aim of these projects to engage maximum people of the local community and providing them with employment opportunities in order to make sure that the environmental needs of the community are met.

Reporting Parameters: There are a number of parameters that have been implemented by Downer and have reported that the practices that are undertaken by the company are in accordance to the various aspects of sustainable development. The three bottom lines are religiously followed by Downer and have become an integrated part of their work process.

  • Pay equality: Downer ensures that not only there is an equal participation of women in their work processes and constructional operations, but there is equal pay scale for both men and women, depending upon their job roles and skill sets (Dyllick and Muff, 2016).
  • Engagement of students: There are a number of university students who are engaged in the Downer construction projects every year. This is in order to make sure that the work force consists of a diversity of people not only over gender, but also over age.
  • Diversity in culture: Cultural diversity is aimed at Downer by making sure that they engage maximum local community in their projects. While undertaking various projects in South America and Africa, the workforce is local and their opinions on each project are of the final value (Tate and Bals, 2016).

Governance, Commitments and Engagement: The governance at Downer is designed in its framework in such a way that maximum transparency and accountability for shareholders is ensured. This makes sure that the relationship with the shareholders is strengthened, which in turn makes the idea of sustainable development and maximum profit accomplishable for them at the same time (Ahi and Searcy, 2015).

  • Nomination and Corporate Governance Committee: The objective of this committee is to make sure that the board members are efficiently able to perform their job roles and have a complete consideration for environmental and community concerns.
  • Remuneration Committee: This committee works with the board of directors in order to make sure that the fair and equal wage concept is followed. The committee works on the incentives, bonuses, remuneration and other employee welfare aspects (Onat, Kucukvar and Tatari, 2014).

Management Approach: The other committees at Downer ensure that the effective employment of sustainable practices is ensured.

  • Audit and Risk Committee: This team manages the risk framework at Downer and ensures that risk factors at work sites are eliminated or reduced to the maximum.
  • Zero harm Committee: This committee takes care of the general practices that are undertaken at Downer and evaluates them with respect to the harm that they are causing to the environment and other units that are involved in the construction process.

Challenges and Issues in Reporting Sustainability
According to Dyllick and Muff (2016), even though the three bottom lines provide a well constructed framework for the implementation of the idea of sustainable development and issues the necessary guidelines that need to be followed by construction companies. Further, this to make sure that the goals of sustainable development are achieved, there are a number of challenges and issues that may be faced in the process.

General challenges for using TBL in ST

  • Multiple reporting frameworks: Each reporting concept that has been included in the overall idea of sustainable development is independently complete and perfect. However, if the factors are combined together, the problem of a finding a system of evaluation that is common to each of them has been faced. It is because each of them has different units and hence, no inclusive system has not been identified yet.
  • Volume of ratings and ranking: There is abundance of ranking and rating information that is available for companies that have been gathered by a number of sources and are available to them through many organizations. Some of this information may be irrelevant or not specifically needed for the company of that specific profile to be included in their idea of sustainable development (Kibert, 2016).

Challenges in SC

  • Wide range of target audience: Unlike financial reports that have the investors in its center as the target audience, there are a number of multiple groups and types of people that are the target audience when it comes to sustainable development. The local community, investors, the government and employees, all have their specific concerns with the idea and it can become problematic to prepare a report that suits the interests of all of them.
  • Differences of culture: There are a number of cultural practices and communities that are spread all across the world. Each of them has a different idea of materiality that is based on what elements are held in higher value in that specific culture and which ones are negotiable. In order to incorporate all these cultures in the system of measurement of sustainable development, it is hard to find a standard parameter that can be applied to each of them (Langford et al. 2014).

Challenge in reporting GRI

  • Increasing depth of the concepts and expertise: The level of depth when it comes to sustainable development is increasing day by day. Every other day and research on the concept add a new dimension to the idea of sustainable development and hence the concept is growing wider and wider in terms of the elements that it involves. According to Hwang and Shan (2018), the challenge is to include all this data into the framework of a construction project and to make sure that the individual requirements of each of them are met in a way that the set benchmarks are achieved.

Conclusion
The idea of sustainable development is very wide in its policies and framework. The elements that are included in the concept are spread over a very wide range and if all the aspects of it are satisfied, the idea can transform to reality. There are a number of construction companies like Downer that are following the concept and making sure that all aspects of this concept are covered by them. However, there are a number of challenges that are still faced by experts in finding a standard of sustainable development and the issues need to be addressed immediately.

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