Triple Bottom Line and Sustainable Development
This report emphasizes on providing information related to sustainable development and triple bottom line framework. It also provides the information related to strong and weak sustainability and significance of triple bottom line framework over traditional approaches. Besides this, it also entails information related to the emergence of sustainable construction as it provides the information related to sustainability reporting of a hypothetical company Green World Developers. This is the reason that it also emphasizes on the significance and key considerations related to sustainable construction. It also includes a section that provides the information related to the profile, strategies, reporting parameters, governance and commitments and management approach adopted by Green World Developers. It also provides the information related to the challenges faced regarding the sustainability reporting by the companies.
The concept of triple bottom line is coined in the year 1994 by John Elkington. Triple bottom line is a sustainability concept which is also considered as an accounting framework that focuses on three elements of performance i.e. financial, environmental and social. These elements are also known as three Ps i.e. profits, people and planet. It also differs from the traditional reporting frameworks in a way that it also takes into consideration ecological and social measures which poses a difficulty in assigning of the appropriate means of measurement. This framework also takes into consideration the importance of sustainability by evaluating the effect of the activities of the organization on different elements of the world such as profitability, social, environmental and human capital and shareholder value (Sarkis and Dhavale, 2015).
Besides this, sustainable development refers to the phenomenon in which the development takes place in the society to meet the needs of the people in the present time without comprising the ability of the future generations in meeting their needs. Besides this, it also takes into consideration the meeting of the needs of the present generations by avoiding the wastage of available resources and preserving it so that the future generations can meet their needs in an effective manner (Barkemeyer, Holt, Preuss and Tsang, 2014). Weak sustainability refers to the process in which the natural resources and services can be replaced easily by manufactured goods and services. Besides this, strong sustainability refers to the maintenance and enhancement of the natural capital i.e. resources and services as it cannot be replaced by the manufactured goods and services (Wilson and Wu, 2017).
Triple bottom line framework emphasizes on three elements in order to maintain sustainability of the company such as people, planet and profits. Triple bottom line framework is important for maintenance of the sustainable development as it considers different aspects that make human resources or employees accountable for their actions in the business. In a similar manner, the use of triple bottom line helps in disclosing of the material information related to the activities being carried out by the business to its stakeholders in order to bring transparency in the operations. This helps in building trust and harmonious relationships with different stakeholders of the company. In addition to this, this framework also helps businesses to identify the consequences of different activities on the stakeholders for which they are accountable to them (Hammer and Pivo, 2017).
Significance of Triple Bottom Line in Sustainable Development
Along with this, this framework also provides different measures that can be adopted by the companies to measure the performance of the company with respect to three dimensions i.e. people, profit and planet in order to maintain the sustainable development of the economy. The different tools adopted to measure the performance in these three dimensions include amount of taxes paid, average hours of training per employee and safety incident rate. There are also other parameters that are used to measure the performance of the company from these three dimensions (Alhaddi, 2015). Thus the construction organizations must consider the elements of triple bottom line in their business operations to establish the goals of sustainable development in the associated industry.
Besides this, there is no presence of a common unit of measure for three dimensions considered in triple bottom line. This is the reason that the companies are emphasizing on setting the benchmarks for the measures to evaluate the performance of the companies for these three dimensions in the form of index. This helped in the elimination of the incompatible units and encourages adoption of the universally accepted accounting method which helps in making comparison between different entities such as comparison of the performance between the companies, development projects and cities (Gou and Xie, 2017). In this concern, the concept of triple bottom line plays an essential role in the construction companies in achieving the goals of sustainable development in an effective manner.
Sustainable construction refers to renovation, designing and conversion of a building in a way to comply with the environmental rules and adoption of the energy saving methods. Sustainable construction emphasizes on the promotion of the environmentally friendly materials that are needed to be utilized by the companies in order to contribute towards the wellbeing and sustainability of the buildings. It also emphasizes on adoption of the different efforts that results in the reduction in the carbon emissions while constructing a building or carrying out a construction project by emphasizing on the use of better insulation, mobility, use of renewable sources of energy, natural embodied energy materials and use of energy in a rational manner (Gan, et.al, 2015).
Along with this, while carrying out the construction project, there is a need to consider the well being of the occupants and workers carrying out activities on construction sites in order to maintain the sustainable development of the building or infrastructure. Sustainable construction put together the principles of green building methods and adoption of eco-friendly practices to reduce the environmental impact of commercial and residential structures. It emphasizes on the utilization of resource efficient construction methods for constructing, designing and renovating of the buildings. The main purpose of the sustainable construction is to use the materials that help in the preservation of the natural resources, reduction in the pollution and development of a healthy natural environment (Ogunbiyi, Goulding and Oladapo, 2014).
Concept and Key Consideration in the Sustainable Construction
It is also found out that the companies that are engaged in construction of buildings focuses on fulfilling the needs of three elements which are considered in sustainable development such as economics, ecology and society. For this purpose, there is a requirement of the usage of different tools and systems for the purpose of the harmonization of the process such as standards, building codes and certification systems. There is a presence of complexity in the construction process of a building requires integration at all stages in order to fulfill the three different needs (Waris, et.al, 2014).
There is a need to use different certification tools that helps in maintaining the accessibility, functionality and health aspects that are related to environmental protection, social and economic over building lifecycle. The different key considerations related to sustainable construction includes compliance with different legislative developments, enforcement of international rating tools like LEED, and emphasis on establishing national priorities (Mok, Shen and Yang, 2015).
Overview of Green World Developer
Green World Developers is an Australian based construction company that not only delivers construction projects across Australia but also in other countries such as New Zealand. The success of the company depends on the blue chip client base that comprises of different private and institutional corporate. Besides this, the company emphasizes on adoption of service based culture and non adversarial approach towards project delivery. The company provides services to its clients not based on size and location of the project. The company provides services to different industrial sectors such as aged care, aviation, education, short term and student accommodation and so on (Kliuchnikova and Pobegaylov, 2016).
It is identified that the company ensure compliance of the delivery and performance of the work with highest quality as per the standards in the industry. For this purpose the company has implemented integrated management system for the purpose of the formalization of the procedures and processes to ensure high standard of safety, quality and environmental management. This has been regularly audited by the third parties for continuous improvement to remain at the forefront of the industry (Aarseth, et.al, 2017).
The company has attained several accreditations in various domains such as the safety management system complied the AS4801:2001 to ensure that the different risks associated with the projects are controlled, managed and eliminated in an effective manner. Besides this, the company also complied with the ISO 14001: 2004 standard that shows that the company has complied with the legislative requirements of environment management by ensuring fulfillment of the industry practices. The company has also incorporated strict protocols and procedures for ensuring the delivery of high quality projects by complying with the AS/NZS ISO 9001: 2008. The company is a member of Green Building Council of Australia and committed towards the adoption of the sustainable construction practices to provide long term economic benefits to building owners, developers and occupants (Epstein, 2018).
Overview of Green World Developers
In order to spread awareness among the clients regarding the meeting with the sustainability principles, the company has developed in-house expertise of a range of Green Star accredited professionals. Apart from this, the company has successfully delivered 4, 5 and 6 star green star buildings in the last few years. The company has adopted a relationship based procurement model named ECI to leverage the experience offered by the company at the earliest opportunity in the project delivery cycle. It allows the clients to add value to the project by tailoring the design and construction expertise to influence the long term decisions which has a direct impact on the time, quality and cost of the project (Benn, Edwards and Williams, 2014).
Along with this, the professionals and staff of the company partners with external consultants for the purpose of delivery and design of the project to fulfill the requirements of the clients in an effective manner. The design team considers different design alternatives and issues that can be faced related to construction and build ability to ensure provision of efficient design solutions to the clients. This is also used as a risk mitigation tool as it helps in establishing coordination of the design with different disciplines which in turn helps in elimination of the possibility of variations in the construction phase due to presence of conflicts in design documentation (De Villiers, Rouse and Kerr, 2016).
The main strength of the company is the presence of flexibility, resources and sound knowledge of different industry sectors and individual needs. This is the reason that the company is able to develop a strong client base which results in the occurrence of 80% of the repeat business which includes federal and state government entities and leading international corporations. The team of the company is able to complete the projects in a timely manner at reasonable costs. This is the reason that the company is able to deliver the projects to different market sectors in a consistent manner. The different sectors to which the company delivers the projects include aged care, aviation, and commercial and so on. The company also has an extensive experience in the management of the roles of the contractors in a situations wherein there is a need to focus on fast track delivery and presence of undefined designs (Higgins, Milne and Van Gramberg, 2015).
The company has implemented sophisticated project management and reporting systems for the effective management of the trade contractors and provision of timely and accurate information to take key strategic decisions. It is also found out that the company has delivered diverse range of construction projects pertaining to private and government sector in an effective manner by developing loyal repeat business relationships with a project ranges from $1 million to $150 million covering majority of the business sectors. The company has also extend its construction services on the Greenfield sites and extension, refurbishment and fit out works (Ruparathna and Hewage, 2015).
The construction activities are carried out under the Integrated Management System of the company for ensuring the delivery of best level of safety, quality and environmental management. The team of the company is supported by extensive network of suppliers and subcontractors. Besides this, the company also provides different cost planning and budgeting services to the clients that carry out transactions repeatedly with the company as it applies to the current market rates at the early stages to enhance the confidence in financial outcomes like project feasibility analysis and funding approvals (Jiang and Wong, 2016).
The staff members prepare competitive pricing estimations for the clients that are involved in potential value management processes. The team of the company includes services managers, design managers and green star accredited professionals for ensuring the provision of innovative design solutions. Company employed employees belonging to different locations and for the purpose of upgrading their knowledge, transfers and provide promotions which helps in the development of new skills and abilities which helps in accelerating their career growth (Sabnis, 2015).
The company also provides and offers different products related to building, civil engineering and energies and services. It is essential for the company to expand its business operations by the way of mergers and acquisitions and joint ventures for the purpose of capturing an increased market share. This also helps in the attainment of the competitive edge over other players in the market. This also helps in maintaining the sustainability of the business in the market.
It is essential for the company to assess its carbon footprint due to the reason that it helps in the identification of the risks and opportunities related to energy and climate issues need to be communicated and reported by suppliers and subcontractors regarding their products and services for each business segment. It is difficult to gauge the emissions as its quality depends on different parameters such as availability and reliability of the information systems, changes in emission factors and extent of disparity between data sources.
The company develops the carbon or energy strategy based on two pillars i.e. provision of low carbon solutions to end users through leveraging best practice and innovative projects by promoting carbon solutions in operational phase i.e. design and construction of the structures. It can be reported by the way of attaining a certification on a residential project of a True Zero Carbon which results in the provision of the information to the customers regarding the efforts made by the company for pursuing sustainable construction.
The company also discloses the information related to the amount of carbon being emitted from different activities which also helps in bringing transparency in the information related to sustainability reporting parameters to stakeholders. This has helped in improving the commitment level of the stakeholders. Carbon audit has been done by the company to disclose information related to carbon emission carried out by the activities performed by the company to its stakeholders. It also gives emphasis on disclosure of the information related to the efforts that have been carried out to promote sustainable construction.
In addition to this, the company has adopted Autonomous Building for Citizens to design the structures for the customers as it helps in mitigating the consequences of climate change. The different parameters used for reporting of the social information include employment and regional development, occurrence of the dialogues between local residents and organizations, purchasing procedure, initiatives taken to curb corruption,
The company has adopted Actitudes’ policy for underpinning the response towards the challenges posed by sustainable development. This policy has helped in gaining understanding related to the responsibilities of the company in terms of social, community and environment. It is considered as an integral part of the company and facilitates in bringing innovation and creating value for the customers. It has been rooted in the construction stategy of the company in a way that it helps in bringing research, development, sustainable development, innovation, strategic marketing and forward planning departments together in a sustainable construction department. The department that implemented this policy consists of 100 sustainable development representatives within the entities of the company. The policy is structured around four priorities and twelve commitments and is measured by key indicators and extra financial reporting system (Siew, 2015).
The four priorities underpinned by the Actitude policy includes environment and sustainable construction, customers and partners for a sustainable project, local commitment and community aid and respect and development of employees. The company can attain the priority named Environment and sustainable construction by the way of offering of high performance projects for a better quality of life. This in turn can be attained by the attainment of four commitments such as innovating for carrying out sustainable construction, eco-designing of high performance projects, ensuring of environmental friendly worksites and building, operating and maintaining of the projects for delivering controlled performance (Wijethilake, 2017).
In a similar manner, the priority of customers and partners for a sustainable project for ensuring success through bring together different players in the project can be achieved by fulfilling three commitments i.e. establishment of a trust relationship with customers, commitment towards compliance and ethics in relation to partners and customers and shared goals with partners for sustainable performance. The priority of local commitment and community aid that underpins the commitment of the players towards the development of the territories can be achieved by attaining two commitments i.e. contribution towards local development and getting involved with civil society and local communities (Barkemeyer, Preuss and Lee, 2015).
The priority named respect and development of employees focuses on management of diversity for the purpose of achievement of success of the projects which can be fulfilled by the attainment of three commitments i.e. guaranteeing of health and safety of employees, ensure compliance of equal opportunities and improvement of the skills and fostering cohesion and wellbeing in the workplace. The key indicators to measure the performance of 12 commitments that helps in the achievement of four priorities in the Actitude policy includes the following:
- proportion of research and development related to sustainable construction
- emission of carbon dioxide per million euros of sales
- Involvement of buildings towards the labeling and certification schemes
- number of worksites with labeling of eco-site
- number of completed projects that have high level of customer satisfaction gained by conducting a survey
- Purchases made from the suppliers that are evaluated towards CSR
- Number of businesses that involves suppliers, subcontractors and partners to develop an action plan
- Number of managers and executives towards permanent contracts that has provided training in the procedures and policies of anticorruption
- Number of projects that are taken up with the cooperation with local integrated bodies
- Number of partnerships formed with NGOs that are committed towards health, education, and emergency response
- frequency and severity rate of occurrence of industrial accidents that involves production workers
- percentage of women at managerial position
- number of disabled employees positioned in permanent contracts
- number of staff members that attain training
The management of the company issues a methodological reporting guide to every personnel who is involved in the reporting of the indicators for the purpose of bringing uniformity in the indicators. It consists the information related to comments of the contributors and previous year data which acts as a basis for decision making by the personnel. It also includes the information related to the principles, definitions, calculation formulas, units and conversion functions. Employees are also provided the space in the intranet for downloading and storing different reporting tools that are frequently used by them to measure the performance (Song, Li and Zeng, 2015).
There is a use of Enablon reporting software to gather, control and consolidate the information related to sustainable development indicators as it incorporates the work flow process. It is also identified that in case an indicator is not taken into consideration in a full manner then a percentage is being specified that covers the scope. Apart from this, the indicators related to human resources involved in all entities are consolidated in extra financial reporting structure (Khalfan, et.al, 2015).
The reporting has been done by the lead company in case a project is carried out by the consortium of different entities of the company. In case a project is being carried out in a joint venture or partnership then it is reported in proportion of the sales being recorded by the company. The sustainable development department has established a framework for indicators relating to social, community and environmental that facilitates in monitoring the progress that can be achieved through the implementation of Actitudes policy to improve the scope of the indicators (Säynäjoki, Heinonen, Junnila and Horvath, 2017).
The information related to social indicators are provided by the human resource department which is then consolidated by sustainable development department for the purpose of ensuring consistency. Along with this, the different indicators which are used to measure the performance of the company in terms of social, environmental and community have been verified by the external auditor (Khalfan, et.al, 2015).
In addition, the management approach is known as risk management approach, which determines the risks related to health & safety, well integrity, water & energy, infrastructure & logistics and public engagement & communication. It is essential for a construction organization to consider these risks while developing an effective management or business approach (Kuo and Lu, 2013). The organization can develop a risk free environment through considering these risks in the business approach. This approach is determined in the below diagram:
In a construction company, there may be different risks that may influence to the business operations in a great manner. Through the risk management approach the construction company can operate its business operations in an effective manner and can make balance between the business operations and sustainable development. Through an appropriate management approach the construction organizations can eliminate the issues related to environmental risks, health & safety risks, infrastructure risks, water & energy risks and communication risks in proper manner. In this concern, it is essential for a construction company to have a risk management approach to achieve the objectives of sustainable development in an effective manner.
The major challenge of sustainability reporting is the determination and identification of the audience as the reports entails the information regarding the approach and performance of the issues relating to environment, social and governance which are significant for the stakeholders of the company. The other challenge can be lack of compliance with the best practices standards that promotes green building concept. There is a lack of organizational commitment which is required for compiling the report in order to create value for stakeholders. It is essential for the business to comply with the code of ethics that facilitate organizations to create responsible business strategies and relationships with stakeholders and provision of training in sustainability reporting in Australia and New Zealand (Bouten and Hoozée, 2015).
It is difficult to create a balanced and comprehensive approach of impact of sustainability to promote the positive actions carried out by the company. It is also challenging for the companies to select the metrics which are considered significant and useful for decision making to evaluate the sustainability performance for helping investors and stakeholders. They might also find difficulty in the evaluation of the suitable reporting frameworks and standards (Brown and Dillard, 2014).
There is a requirement for the companies to determine and implement appropriate or suitable systems, processes and controls for the production of the metrics that are reliable. There are certain issues that are not considered by GRI standards but are considered important from the perspective of the customers such as environmental stewardship, social justice, community building, risk and compliance, education of employees and provision of employment opportunities (Vigneau, Humphreys and Moon, 2015).
Conclusion
It can be concluded that triple bottom line framework is considered for the compliance of the sustainability issues faced by the company. Nowadays, customers and other stakeholders are becoming conscious about the well being of the society and environment due to which it is essential for the company to report regarding the three important aspects which are identified in triple bottom line framework in its sustainability report i.e. people, planet and profit.
It can also summarized that Green World Developers is a construction company based in Australia and also carries out operations in New Zealand. The company emphasizes on adoption of the Green Building concept by carrying out efforts to minimize carbon emission in the environment. It also emphasizes on sustainable construction that refers to the concept of carrying out different processes those results in construction of the structures by the use of resources in an optimum manner without comprising the needs of the future generations. Apart from this, the company also complies with the guidelines of GRI and made Actitudes policy an integral part of the company.
Besides this, it can also concluded that sustainability team of the company puts together different functions of the company to ensure sustainable development. This policy entails four priorities and 12 commitments which are being carried out to attain sustainable construction. There are different indicators used by the company to measure the attainment of these priorities and commitments in a successful manner which in turn helps in complying with the components of triple bottom line framework.
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