Governance, Ethics and Sustainability

This study material explores the concepts of governance, ethics, and sustainability in the context of businesses. It discusses economic, environmental, and social sustainability and their impact on organizations. The case study of Timberwell Constructions is analyzed based on GRI reporting standards.

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Governance, Ethics and Sustainability

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Table of Contents
Introduction...................................................................................................................2
Economic Sustainability................................................................................................3
Environmental Sustainability........................................................................................5
Social Sustainability......................................................................................................7
Conclusion....................................................................................................................9
References................................................................................................................... 10

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Introduction
There are three types of sustainability factors that impact the operations of a business
which include economic, environmental and social. The management has to focus on
these factors while taking business decisions to ensure that the companies conduct
their operations in a sustainable manner (Schaltegger and Wagner, 2017). Maintaining
these three business sustainability measures is a part of the social responsibility of the
company. GRI reporting standards are the first global standards implemented to
govern sustainability reporting of companies. These standards feature an interrelated
structure and represent the global best practice for reporting on the three key areas of
economic, environmental and social impacts (Global Reporting, 2019). The objective
of these standards is to promote sustainability reporting in a global stage. The case
study of Timberwell Constructions will be analysed in this report to prepare a
sustainability assessment report based on GRI reporting standards.

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Economic Sustainability
Economic sustainability is referred to the practices that support long term economic
growth without adversely affecting the social, cultural and environmental aspects of
the community. Economic sustainability policies are focused on achieving smart
growth, conducting long-range planning, reducing the cost of living, increasing R&D
spending and cost savings (Rigamonti, Sterpi and Grosso, 2016). The key issues with
implementing economic sustainability policies are that organisations did not prefer to
invest their resources in adopting these policies since it could adversely affects their
short term profits; however, sustainability policies are beneficial for the long term
health of ecosystems and economic growth of the organisations (Rigamonti, Sterpi
and Grosso, 2016). The actions taken are companies resulted in adversely affecting the
environment and its resources which become a challenge for the future generations to
fulfil their needs by using these resources (Blandin et al., 2015). Organisations have to
take a strong stand against corrupt activities of their employees to maintain economic
sustainability (Forson et al., 2017). Economic sustainability policies promote
intergenerational decision making and prevent the consequences caused due to global
warming.
Disclosure 201-2 Financial implications and other risks and opportunities due to
climate change
The potential implications of the actions taken by Timberwell Constructions can
adversely affect the profits, expenses or operations of the company. In this case, the
company has faced financial implications which are a result of the complying with the
amendments issued in the proposal of Stanwell Council. These amendments are a part
of the Local Environmental Plan (LEP) which is issued by the council. These
amendments are focused on addressing major issues relating to climate change and
risks which businesses have caused in different areas of Stanwell District. The
development made by companies in these areas meets higher standards of bushfire
safety which include using fire-retardant building materials and increasing the space
between building and land boundaries.

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One of the development sites of Timberwell Constructions is situated in the area of
Stanwell Council that is rezoned as a bushfire prone based on the amendments
introduced in the LEP. The company is in consultation with the Stanwell Council in
order to comply with the amendments of LEP which will take effect in six weeks.
Based on these policies, the company is likely to suffer financial consequences of $4
million. Moreover, the company has hired an external town planning company which
is charging $50,000 from the company to manage development application and
minimise potential costs.
Disclosure 205-3 Confirmed incidents of corruption and actions taken
Five employees and two external consultants of Timberwell Constructions have been
charged for corruption because they bribed a council project officer. The response of
Timberwell Constructions to these charges has been strict and the company has
suspended the employees without pay who were involved in corrupt activities.
Moreover, the company provides that it will not involve with any business consultants
who engage in corrupt practices and it will terminate its current partnership with those
business partners as well. The management will redraft the Code of Conduct of the
company and educate employees on a regular basis to comply with the Code. The
objectives of these actions are to ensure that good business practices are conducted by
the company which is crucial in order to achieve economic sustainability goals of the
enterprise (Khlif and Hussainey, 2016).
Disclosure 206-1 Legal actions for anti-competitive behaviour, anti-trust, and
monopoly practices
Different cases are filled against Timberwell Constructions in which the company
alleged for engaging in anti-competitive, anti-trust and monopoly practices. These
actions have negative impact on the economic growth of the company which makes it
challenging for the enterprise to achieve its sustainability goals (Herdegen, 2016). The
Australian Competition and Consumer Commission (ACCC) have initiated a suit
against Timberwell Constructions by alleging the company for engaging in anti-
competitive practices. It is reported by the ACCC that the senior level executives of

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the company were aware that a small group of builder are deciding to join together to
start a group in the Stanwell District in order to compete with local businesses in the
area.
The executives of Timberwell Constructions addressed this competitive threat by
threatening the builders that they will lose their business with the company if they
continued with this plan. It shows that the senior level executives are misusing their
powers in order to create a monopolistic approach in the market which will negatively
affect the economic growth of Stanwell District and create challenges for the
achievement of economic sustainability goals (Cosimato and Troisi, 2015). This case
has not been heard yet, and the Federal Court provides its judgement in the next four
year. Timberwell Constructions is budgeting for the costs of defending the court case
and the company is taking stricter measures to reinforce its Code of Conduct by
ensuring that the senior level executives comply with the Code.
Environmental Sustainability
Environment sustainability is referred to practices which are taken by organisations to
meet the demands placed on the environment without reducing the capability of others
to live well currently and in the future (Alshuwaikhat et al., 2017). Natural resources
are limited in number and their excessive use negatively affects the environment and
the ability of the future generations to fulfil their needs by using these resources.
Sustainable energy consumption is key for companies to fulfil their environmental
sustainability objectives which enable them to ensure that they did not exploit
environmental resources (Owusu and Asumadu-Sarkodie, 2016). Environmental laws
and regulations are aimed to ensure that companies ethically conduct their operations
without exploiting natural resources (Percival et al., 2017). Organisations face issues
when it comes to the achievement of environmental sustainability since there is
limited number of resources and it leads to exploitation of these resources if they did
not use them in sustainable manner. Globalisation and industrialisation have created
challenges for the achievement of environmental sustainability since it has become
easier for businesses to exploit environmental resources.

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Disclosure 302-1 Energy consumption within the organisation
The company is efficient when it comes to energy consumption. It uses calculation
tool which is recommended by the Australian Department of Industry and Science in
order to report its fuel consumption. Fuel consumption of Timberwell Constructions
through non-renewable sources is 1.0 Gigajoule. From renewable sources, its fuel
consumption is 0.5 Gigajoule, and its electricity consumption is 2.0 Gigajoules. The
company is planning to increase its reliance upon renewable sources by 50 percent
within the period of new three years.
Disclosure 304-2 Significant impacts of activities, products, and services on
biodiversity
Organisations have to take reasonable precautions and measures to ensure that their
actions did not adversely affect the biodiversity in the areas where they conduct their
business operations (Bennett et al., 2015). The company has a site situated in Otford
Park which is the home of rare wallum sedge frogs. In case the company continued its
operations, then it can make it difficult for these frogs to live in the area which could
lead to their extinction. In order to address this issue, the company is working together
with Stanwell Council and other environmental groups. The objective of the enterprise
is to develop a strategy which will enable it to conduct its operations while conserving
the wallum sedge frogs. The management of the company has developed biodiversity
management and conservation plan which is a key part of the social responsibility of
the company (Turnhout, Dewulf and Hulme, 2016). The company has undertaken an
Environmental Impact Assessment in order to reveal the actions taken by its
management for conservation of rare wallum sedge frog in its site at Otford Park. The
company is considering changing its location as well to protect the biodiversity in the
area.
Disclosure 307-1 Non-compliance with environmental laws and regulations
A fine of $200,000 is charged on Timberwell Constructions because the company
cleared 0.45 hectares of critically endangered ecological community coastal
grasslands while conducting its business operations. The company was ordered to

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review its vegetation management plan and extend its audit program which oversees
the operation of contractors. Moreover, the company was ordered to implement a
rehabilitation plan for no less than $440,000. The management approach is focused on
training all contractors to make them aware of their environmental responsibilities
which will leads to achieve environmental sustainability goals.
Social Sustainability
Social sustainability is defined as a proactive way of managing and identifying
business impacts on employees, customers, and local communities to promote their
well-being and support the ability of future generations to maintain a healthy
community (Eizenberg and Jabareen, 2017). Providing a safe work environment is a
duty of companies to fulfil their social sustainability goals which include prohibiting
discrimination in the workplace between employees based on race, colour, age, gender
and religion (Mani, Agrawal and Sharma, 2015). Social sustainability issues have
become a bigger problem as the number of discrimination cases increases across the
globe. Organisations are expected to take strict actions to protect their stakeholders in
order to achieve their social sustainability targets.
Disclosure 401-1 New employee hires and employee turnover
There are 58 male staff members hired by Timberwell Constructions for conducting
its operations along with 12 apprentices. 17 employees of the company left to join its
competitors or start their own businesses. The hiring rate of the company is 20.6
percent whereas its employee turnover rate is 29.3 percent. Moreover, the majority of
the employees in the company are between the age of 30 and 50 years. One of the key
social sustainability goals of companies is maintaining equality between their
employees and protects them from discriminatory behaviour (Mani, Agrawal and
Sharma, 2015). Timberwell Constructions is focusing on increasing the percentage of
female employee by launching policy that 60 percent of newly hired employees are
females. It aims to increase the number of female employees up to 48 percent by the
next year to promote gender diversity and equality in the workplace.

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Total Employees 58 male
New Apprentices Joined 12
Employee left 17
Rate of hiring 20.6%
Rate of turnover 29.3%
Disclosure 406-1 Incidents of discrimination and corrective actions taken
The Fair Work Commission upheld a complaint against Timberwell Constructions on
the grounds of age-based discrimination which involves the use of age-based jokes
against the employee in the workplace. It is reported by the employee that other
workers used inappropriate humour against him because he was above 50 years
whereas others were between the age of 30 and 50 years. The employee is
compensated by the company, and the company has updated its anti-discrimination
policy. Training is given to employees as well in order to avoid anti-discriminatory
behaviour in the workplace.
Disclosure 413-1 Operations with local community engagement, impact
assessments, and development programs
The company initiated different programs for engagement and participation in the
development of the local community. The management of the company engaged with
local community in development programs and local resident meetings which were
conducted under the need of affordable social housing in the community. The
company is working with the Stanwell Council and external town planning firm for
frog conservation in order to protect the biodiversity in the local area.

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Conclusion
In conclusion, Timberwell Constructions faced many economic, environmental and
social sustainability issues which affect its profits, expenses and operations. The
company took measures to update its anti-discrimination policies and educate its
employees to avoid discriminatory behaviour in the workplace. The Code of Conduct
is reinforced by the company to avoid anti-competitive behaviour and training its
employees to avoid corruption. The management has taken many decisions to protect
the biodiversity in the area and support the development of local communities.
Timberwell Constructions looks forward to providing a more positive GRI report in
the next reporting period.

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