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GRI Sustainability Report For McGruder Industries Assessment Answer

WORD LIMITS: 2000

Your Task 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 Message from the CEO of fictional company McGruder Industries. 

 Assessment Instructions

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

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

 A Message from the CEO 

Dear Employees, 

I wish to personally thank you for your professionalism and continued dedication to McGruder Industries. Last year was certainly the most challenging year our company has faced in its proud history and I would like to take this opportunity to dispel some of the rumours circulating around some of the issues that arose.

 Obviously, the most serious matter for McGruder Industries was the media investigation into the ongoing use of child labour in Somali manufacturing facilities. The investigation revealed that one of our suppliers, Fabian Ltd, engaged manufacturers in Somalia that employ child labour to produce their products. This situation was not known to us and was a clear breach of our supply contract with Fabian Ltd. We therefore terminated our contract with Fabian Ltd. 

The good news is we were able to find a replacement supplier relatively quickly – a local supplier that operates within our own metropolitan area. This new local supplier means that our percentage of products and services purchased locally has risen to 75% of our total procurement budget. Plus the materials from our new supplier are both renewable and recyclable which means our total weight for non-renewable materials has decreased to 55 tonnes while our total weight for renewable materials has increased to 45 tonnes. And our total weight for recycled input materials has increased to 25 tonnes. 

The second serious issue faced by McGruder Industries this year was the Australian Competition and Consumer Commission (ACCC) investigation into our recent marketing communications. The investigation found that McGruder Industries had engaged in false and misleading conduct and issued an Infringement Notice with a penalty of $12,600. McGruder Industries paid the fine and updated our marketing policies to ensure future compliance with all Australian Consumer Law provisions.

 The third serious issue was a significant fuel spill at our warehouse in Flintoff, Victoria. Approximately 8 kilolitres of fuel spilled from a rupture in one of the fuel tanks into the soil around its base. The spill soaked directly into the ground and we have sprayed the affected area with liquid hydrocarbon-eating bacteria to remediate the soil. It has certainly been a challenging year for us but we all must remember there have been some great wins too. The Federal Government awarded our organisation with a $15 million research and development grant that we will use to continue our breakthrough research into biotechnology. 

This was also the year we completed our $10 million health and welfare centre project in Esperance, Western Australia. This centre will provide much needed support to families coping with a range of social issues completely free of charge. It is an extremely worthy initiative and demonstrates our clear commitment to the social well-being of those that are less fortunate in our community.

 Finally, our employee training program on human rights was launched this year and has already completed 100 hours of training on aspects of human rights that are relevant to our operations. This means that 35% of our employees have been trained in human rights principles ranging from gender equality to human dignity and respect. With your continued hard work and support I am extremely confident that McGruder Industries can build further upon our success in the coming year.

 Kind regards,

 David McGruder

Guidelines for Completing Assessment 3

For this exercise, you need to imagine that you have been asked to produce a particular document on behalf of the (fictional) company named in the Case Study document.

The Case Study document provides the information you will require, to in-fill the fields of the various ‘material topics’ to be covered in the report. It is highly likely that most incidents mentioned in the Case Study will best fit just ONE of the 9 material topics provided for Assessment 3.

Everything you put into the report, should be designed to place the company in as good a light as possible. The document admits where an unfortunate incident occurred under a material topic heading. However, you should not dwell on the bad things, simply state them, and go on to explain the Management Approach to such topics. This includes any special steps taken by the company to correct the problem; plus, standard company procedures and policies that are in place to deal with such issues.

Usual rules of report writing apply. Language should be impersonal throughout. No use of first-person language (I, me, we) or of second person language (you).

Answer

Assessment- Sustainability 

Overview

This study is going to focus on different aspects of the GRI sustainability report for the company named McGruder Industries. This study will be shed light on this particular GRI sustainability report for McGruder Industries as the organization has been facing some significant issues for the last few years. For dealing with these significant issues, GRI sustainability report and sustainability standards are required to be developed for the selected company so that the business activities of the selected organization can become sustainable. This study is going to focus on the GRI sustainability report, which is known as the worldwide reporting framework through which sustainability performances of the business organizations can be disclosed properly.     

Introduction

Before describing the aspects of a sustainability report in terms of McGruder Industries, it is much essential to gather background information related to GRI sustainability report and standards. The standards, which are associated with “GRI sustainability reporting” is known as the first international standards in terms of sustainability reporting. The guidelines of GRI sustainability reporting can be restructured and reviewed into some significant modular interrelated standards and guidelines. The GRI standards as per the sustainability reporting can be helpful for different business organizations to protect their investments as these standards are responsible for new developments by staying more relevant and up-to-date.

Background

According to the GRI standards and sustainability reporting, there are three verities of sustainability, which can impact every business organization and those three standards are “economic sustainability (GRI 200)”, “environmental sustainability (GRI 300)” and lastly, “social sustainability (GRI 400)”. This three sustainability is based on the foundation (GRI 100) with which ten significant principles of GRI report and quality are involved such as stakeholder inclusiveness, completeness, materiality and sustainability context in the form of report content and accuracy, comparability, reliability, balance, timeliness and clarity in the form of report quality (Global Reporting 2020).

For all the business organizations, it is much required and essential to care about their sustainability records as, by this, the impacts of the current sustainability problems on these organizations can be considered and understood properly. As the sustainability report is considered as the most useful and effective risk management tool, the business organizations can with these issues by taking care about the sustainability records or reports (Gallego-Álvarez, Lozano & Rodríguez-Rosa 2018). All the business organizations should care about their sustainability records or reports so that they can generate the overall organizational savings effectively. Lastly, it can be said that the business organizations should decide to offer sustainability report so that the entire decision-making process can be enhanced.             

Methodology             

By the utilization of these three types of sustainability, the most significant matters, which can impact on their business activities, can be evaluated effectually. GRI 102, which are known as the general disclosures, are helpful for the business organizations in reporting the contextual information of the organizations along with its reporting practices. After describing these two aspects, it has also been observed that GRI 103 (Management Approach) is another significant aspect in which the ways through which material topics can be managed, are discussed (Shoaf, Jermakowicz & Epstein 2018). Lastly, it can be said that all the GRI standards are based on three significant aspects such as reporting requirements, recommendations and guidelines, which can be helpful for different business organizations what they require to report and how they require to report these aspects. 

The methods, which has been taken to gather information for his study is secondary data collection procedure and all the data has been collected from different websites in which the GRI sustainability reporting and standards have been mentioned. Near about thousands, different organizations have been using GRI sustainability standards and reporting so that they can report the impacts of the organizational activities on the society, environment and economy. Global Sustainability Standards Board (GSSB) issued the GRI standards and all these standards are incorporated with the key disclosures and concepts from the G4 Implementation Manual and G4 guidelines (De Villiers & Maroun 2017). The GRI standards have been using enormously for many years so that the business organizations can prepare their sustainability reports in association with the standards. Lastly, it can be said that some particular GRI standards can be utilized for reporting some particular information of the business organizations.                                                                                                     

Body

1. Economic sustainability of McGruder industries

The support of long term economic growth of a business industry without any negative impact on the cultural, social and economic growth of the society is termed as economic sustainability of a company. The sustainable position of the McGruder industries must be taken into consideration for growth and promote into a stronger economy.  A company like McGruder might face an issue of economic sustainability just because of the poorness of infrastructure, distribution systems are poor, renewable energy options are unexplored (Global Reporting 2020). The company gets affected in all the ways which may be in a social way, in a cultural way.

Material Topic
Description
Management Approach
“Disclosure 201-4
Financial assistance received
from the government”
i. Relief of tax and credits;
ii. Subsidy
iii. Grant of investment, investigate and growth grant, and other relevant types of grant
iv. Awards
v. Royal holiday
vi. Assisting financially from Export Credit Agencies (ECAs)
vii. Incentives monetarily
viii. For any operation benefits which are received from the government. 

The subsidy from the government, the financially help from the Export credit agencies and the benefit receive from the government helps the management area to manage their portion in a most efficient way so that the McGruder industry may not get lost again due to the problem of the economic sustainability.
“Disclosure 203-1 Infrastructure
investments and services
supplied”
The standard of GRI is accurately used in this digital tool and software. The sustainability report as per the GRI standards is not guaranteed by the Snizer (Global Reporting 2020).
By using this particular disclosure management can have more accessibility to innovative digital technologies. Through the application of new and enhanced technologies overall growth of the economic condition of McGruder, industries can be ensured and the revenue stream can also be improved in a significant and efficient manner.

“Disclosure 204-1 Proportion of spending on local suppliers”
Global Sustainability Standards Boards (GSSB) have issued this disclosure for giving more priority to the local suppliers and stakeholders (Global Reporting 2020).

Based on this particular disclosure, the management board of McGruder industries can acknowledge the local suppliers and can have an affordable supply of raw material from them.

Table 1: Economic sustainability of McGruder Industries

(Source: Created by the researcher) 

2. Environmental Sustainability of McGruder industries

The sustainability of environmental resources for our future generations which need to be maintained and protected is termed as environmental sustainability. This sustainability of environment depends on the intergenerational decisions to make decisions economically for long term consequences. The issues faced by the McGruder Company for its environmental sustainability is that the industry does not prevent any cost for manmade global warming. The company also face the issue as they did not protect the diverse culture and the ecological culture of the species. It has also seen that the company does not have any target of social happiness and social welfare. So for all the reason, the McGruder industry faces all these issues.

Material topic
Description
Management Approach
“Disclosure 301-1 Materials used by weight or volume”
Management approach of this disclosure stated that materials which are weighted heavily and the volume are increased which have an effect to the environment should get reduced its weight as well as volume (Global Reporting 2020)

By using this specific disclosure the volume and the total weight of McGruder industry can easily use for the proper packaging and producing of the primary products. In respect of this disclosure t6he suppliers replacement is also acknowledged
“Disclosure 301-2 Recycled input materials used”
In this disclosure, the direct materials and the proportion of recycled materials are reused in an optimal manner.

Solvating and packaging of the used material in a better and efficient way helps to recycle the inputs of McGruder which can increase the production for at least up to 25 tons per year.
“Disclosure 306-3 Significant spills”
As per the standards of GRI, 2016, this disclosure of 306-3 emerges for the mitigation of risk factors an understandable of the policies in a very better way (Global Reporting 2020).

Based on the 306-3 disclosure the McGruder industries can easily identify the spills in a significant way. As per the report, McGruder in the year has spilt out fuel of near about 8 kilometres due to the leakage of its tanks at the Victoria warehouse. So this oil soaks by the soil of that area for which a large hectare of the area gets affected that's why this organization n is looking forward to meeting this type of obstacles and achieve any issue in the coming future

Table 2: Environmental Sustainability of McGruder Industries

(Source: Developed by the author) 

C. Social Sustainability of McGruder industries

Before describing the aspects of social sustainability of McGruder industries, it is much important to know and understand the notion of social sustainability and it can be illustrated as management and identification or recognition of both negative and positive impacts of the business activities of different organizations on the people or society. The sorts of social sustainability issues, which the business organizations like McGruder industries can face are performance issues including wellness, health and safety of all the individuals both externally and internally of the organizations, human rights, living conditions, work-life-balance, equality, diversity, community engagement, empowerment and fair labour practices. 

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

According to Disclosure 408-1, if the governments of different nations will be capable of identifying any types of unethical behaviours or any incidents of child labour, they can take strict actions against the accused business organizations (Global Reporting 2020). From the message of the CEO of McGruder Industries, it has been observed that one of the suppliers of this organization named Fabian Ltd has been using child labour in Somali manufacturing facilities. After the revelation of this incident, the management of McGruder Industries took immediate action and they switch to another supplier. Due to this incident, the management of the company also breached their contract with Fabian Ltd and such activity can affect the business activities of this supplier.                     

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

As per the basic concept of Disclosure 412-2, it is the minimum and basic right of the employees of different business organizations to get appropriate training on human right procedures or policies and they can also put this demand to the management of their respective organizations. For dealing with this particular social sustainability issue, McGruder Industries has recently launched a training program for the employees based on the concepts of human right procedures and policies. Moreover, from the report of the CEO of the organization, it has been observed that McGruder Industries has developed a “100 hours training program” for the employees. 

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

This particular disclosure, which is related to social sustainability, describes the basic concepts of labelling and information related to the measures of marketing communication. From the report of the CEO of McGruder Industries, it has been noticed that lack of marketing communication has considered as one of the most significant issues (Global Reporting 2020). For this reason, The Australian Competition and Consumer Commission disclosed that the organization was involved with misleading and false communications with the consumers and due to this, McGruder Industries had also fined a vast amount of money (Near about $12,600 AUD) last year. After this incident, the organization has focused on its marketing policies and reviewed those so that the problems of marketing communications can be solved.                                       

Conclusion  

From the above-discussed points, it can be summarized that there are three major types of sustainability, which can impact on the business activities of the organizations including environmental sustainability, economic sustainability and social sustainability. According to the GRI standards, Disclosure 200 is known as economic sustainability, Disclosure 300 is known as environmental sustainability, whereas Disclosure 400 is known as social sustainability. The brief description of all these sustainability has been described along with the management approaches, which McGruder Industries has taken for dealing with the past issues. Overview of the GRI standards of sustainability and reporting has been illustrated.       

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