Corporate social R,A,R

Glencore’s accountability to the stakeholders

Introduction

Glencore is a mining giant where it has established its copper mines in New South Wales. The company has employed more than 500 employees who the management of the company has been working towards ensuring that they are motivated to achieve an increase in the cash flow (Gottschall, 2013). Glencore Company has adopted various strategies that have to be designed to ensure that the company is ethically responsible to its various stakeholders. Since the midst of the 1980s, a large number of companies in the mining industry have reported many cases related to the ethical issues (Gottschall, 2013). However, Glencore Company has been ensuring that it effectively manages issues related to environment, ethical, and also ethical issues. The report is exploring the various ways that it has been accountable to its stakeholders where the seven GRI G4 economic aspects, social aspects, environmental aspects and 2015 indicators are explored.

Stakeholder engagement

The key stakeholders of Glencore Company do include suppliers, market regulators, investors, customers, employees, and civil society. The Glencore Company does play an important role in informing the stakeholders concerning the materiality assessment of the company. The considering of the interests of the stakeholders has been critical in ensuring robust understanding of the company’s social, economic, and environmental impacts (Black, 2013). Besides, the how these aspects do relate to the resilience and value of the business can be realized through ensuring engagement of the stakeholders. The management of the company has been ensuring that there is fundamental connection between sustainability of the company and strategies for the business operations. The company has been employing materiality and strategic approach to ensure greater value and returns for the invested funds.

The stakeholder engagement is a significant process that has assisted the Glencore Company to understand its main environmental and also social impacts. Through the stakeholder engagement, the Glencore Company can identify its risks and acquire some innovative solutions to the challenges facing this Company. The stakeholders here refer to the individuals or groups of people, either from outside the company or within who are affected by the activities of Glencore Company. The management of the company has been working towards ensuring that the wealth of the shareholders is maximized. For instance, the company management has been engaging the shareholders, especially when making risky financial and investment decisions (Mason, 2015). In the process of engagement, employees are always the key driver in sustaining the performance. The employees of the Glencore Company have been playing the role of advocates for their rights of labor. Recently, the interests and commitment of employees in Glencore Company have always directed them towards pursuing in their innovations and sustainability. The efforts of this Company in engaging internal stakeholders have moved beyond appointing the internal CSR departments.

On the other hand, the stakeholders from outside the Glencore Company are also getting more concerned about its operations. Additionally, the response to the external stakeholders has helped the Glencore Company in establishing its credibility and also supporting their license of operation. It is very important for this company to put into consideration about the input of stakeholders in various markets to understand all the local effects. However, the role of stakeholders in the process of engagement has evolved over a period.

Economic performance

The Glencore Company is always different from other companies which deal with mining in that, apart from extracting raw materials, the Glencore Companies also operates largely in other operations such as trading commodities like oil and metals. Sometimes, the trading activities of this Company have held up a better position in the market as compared to its mining activities. In the year 2015, the Glencore Company gave a report that it had achieved a profit of more than $778 million from the trading activities of energy (Gottschall, 2013). This is an increase compared to the profit of previous year. The volatile oil prices created by the Glen-core Company contributed to the attraction of the stakeholders to the environment with the rich market.

Also, the Glencore Company said that there was a reduction in its debt, therefore, creating an important concern to the investors. The Company also said that it was planning to reduce the net debt to around $18 billion in this year (Gottschall, 2013). The Glen-core Company had to struggle more than the other mining Companies in selling their assets and trying to reduce its spending to ensure that there is balance in its net debt levels. Additionally, this Company has brought in more than $1.4 billion from the activities of selling both silver and byproducts of gold from the copper mines.

Indirect economic impacts

Some of the indirect economic impacts of the company can include innovative management of pollution through making use of smartphone app. The innovative approach was geared towards ensuring that safety of the health of the people through pollution as the smartphone up could detect sulphur dioxide. Through the innovative application, people could be in a position to monitor changes in pollution levels. The Glen-core company said that the copper mines and Townsville copper refinery would only stay open until the year 2022. This is as a result of the agreement made by the Swiss miner and the government of Queensland concerning the new conditions for issuing of licenses (Sequeira, et al. 2016). The chief officer in charge of Queensland copper mining activities, in the year 2011 agreed on the decision of closing the smelter which was not in connection to the state government since had a temporary environmental plan which slowly reduced the environmental emissions up to 2016. Within that period of five years, the company was capable of developing the environmental performance to the extent that the government is very happy in the way we are performing. The Glencore Company ensured smoothly operates the two facilities which are the Mount Isa and Townsville provided that they were economically stable. The organization ensured that it invested more than $60 million in the maintenance of smelter for the next seven years.

Energy consumption

Mining in the remote areas and off- grid locations have many high operational costs as compared to the operations which are connected to the grids where there is both electricity and natural gas. The main expenses incurred in the mining operations of Glencore Company conducted in remote areas usually results from utilizing the on-site power generation. In this process of generating power, fuel is driven to the site and then it is burned in generators to produce electricity for providing some services such as lighting and also ventilation.

The Glencore Company has the capability of reducing the consumption of power by just creating awareness about energy at all business levels. Energy awareness involves understanding about the consumption of energy, and also it includes the knowledge surrounding the consumption. The Glencore Company has achieved this through posting notices and also posters to illustrate how the Company has been using energy. Moreover, the implementation of energy tracking has greatly helped the Glen-core Company in creating an important data, for the purpose of communicating information that assists in creating energy awareness (Sequeira, et al. 2016). The optimization of energy in the company has been given priority where the management of the company ensured that conservation of energy whenever possible. Some systems were employed in the management energy in the company where such systems include renewable energy and electrical storage systems.

Water conservation

The management of the company has been working towards minimizing the consumption of water where by the year 2012 the copper concentrator achieved reduced consumption of fresh water by 40%. Besides, the managed ensured that it secured additional water processing resulting in approximately 50% reduction in the consumption of water in the year 2013 (Gottschall, 2013). Glencore management ensured that some installations were in place to ensure control of the water consumption. For instance, some control vales are used in the process of controlling the consumption of water in the operations. Also, improvements were made in the process of dewatering the underground mines leading to water re use in the systems.

The importance of regional fresh water to the Glencore Company was highly discussed in 2008 because there was limited rainfall in that year. However, due to this prevailing condition, `the Company decided to select a group for conserving water, which mainly focused on minimizing the usage of fresh water as well as maximizing the usage of recycled water. Mount Isa usually experiences a semi- arid climate during the summer season. Therefore, all the people and also businesses in Mount Isa should come up with the ideas on how to minimize the usage of water in both domestic and also for industrial use thus ensuring that there is efficiency in the use of water in the company. However, over time the Glencore Company has identified and developed some ways in which Company should use to conserve water (Weijermars, 2014). Some of the ways implanted were constructing onsite dams for storing storm water and also the installation of water pumps as well as tapping borehole water for supplementing the fresh water.

Emissions

The contribution of the Glencore Company towards the reduction of emissions is always connected to the role of reducing global GHG pollution. For a period, we have heavily invested in a wide range of projects and also numerous initiatives to control emissions, which are produced by the operations in our company and also through the utilization of the products from our mining company. As from the year 2009, the coal business in Australia has now abated more than eleven millions of tones carbon dioxide gas from the GHG emissions (Sadler, 2004). This gas has been utilized in the following ways: the gas produced from the process of coal mining as a waste has been utilized to produce power. The installation of megawatts that uses methane emissions from our coal mining has facilitated the conversion of methane gas into energy which is utilized onsite. Besides, the company was seeking to explore alternative sources of energy that can assist in managing emissions. Therefore, this energy has helped in supplementing the already existing sources of the company.

Occupational safety and health

The Bulga Coal mining of the Glencore Company had a double fine on appealing when the Company was found to be operating the safety conditions. The Bulga Coal Mining was fined an amount of $100,000 after the occurrence of an incident in which an employee was knocked into unconscious. In the previous year, the Glen-core was proved to be guilty of the safety breaches because of the injuries of two employees New-sead and McNb in the year of 2010 (Oldenziel and Wilde, 2010). According to the NSW District Court said that the employee Newstead was not properly trained and also he was not given the relevant information concerning the issues of the Glen-core Company and thus resulted in him standing under a roof which was not supported and unfortunately, the unsupported roof knocked him down. The court argued that if the risk of the roof was inspected well, then the necessary information could be obtained and therefore prevents this kind of incidence.

McNab who was also a worker in the Bulga Coal mining was injured severely in the year 2010 when he was crushed between an advanced roof and the side of an armored face of conveyer which was in a continuous state. He was found in between the machinery while in a semi-conscious state. McNab did not know how the incident came to happen, but the possibility of how the flying rock hit him his head was identified.

How Glencore Company met GRI G4 stakeholder sustainability and inclusiveness

Glencore Company has been ensuring that the various stakeholders are involved in the management of the organization. The management of the Glencore Company does consider the interests of the stakeholders in the process of managing its affairs where the stakeholder’s opinions were used in the process of making organizational decisions. This assisted in the process of making the company achieve sustainability in its operations. Glencore Company has been ensuring that it considers the economic, environment and social implications of its operations thus ensuring that it is responsible for its operations. For instance, the management of Glencore Company has ensured that the environment is protected through operation in a way that does minimize pollution. The management has ensured that the emission of the greenhouse gases is controlled to avoid air pollution affecting the health of the public (Kirschke, 2013). Also, the company has been committed to making sure that water is conserved through ensuring efficiency in the consumption of water in the company operations. For example, the company has installed some systems geared towards managing the water usage and controlling water use. Glencore Company has been recycling water in the mining process ensuring that the water used in the mining process is minimized.

The company has been working toward sustainability through engaging the stakeholder in the various decision making processes. The engagement of the stakeholders has been crucial n ensuring that the company can achieve its set goals in long term. For instance, the shareholders have been conserved as important tools in the process of coming up with the best ways of ensuring economic and social sustainability (Landén and Malmberg, 2016). Despite the efforts of the management of Glencore Company ensured in the process of ensuring sustainability and inclusiveness of the stakeholders, the evaluation faced some limitations. These limitations can include failure of the sustainability report to cover all aspects of sustainability in the organization.

Recommendations

SMART objectives: Glencore Company need to ensure that it has SMART objectives in place that can assists in achieving the accountability objectives. The management of the company needs to consider the capability of the organization to ensure successful implementation of the set objectives. This can entail considering the availability of the necessary resources for implementing the accountability strategies. The management needs to ensure that the objectives of the company are specific, measurable, attainable, relevant, and timely. The SMART objectives can be crucial in ensuring that the objectives are aligned with the organizational goals of achieving accountability in its management.

Ensuring good leadership: the managements of the company need to ensure that there is good leadership is provided in the process of ensuring accountability of the company. Through proper leadership the behavior of the employees can be influenced towards ensuring accountability. Also, through leadership can assist in ensuring accountability in the process managing the organization.

TABLE 1 Water GRI Indicators: G4-EN8 & G4-EN10

G4-EN8 TOTAL WATER WITHDRAWAL

Level of compliance

Partially

Not at all

  1. The total volume of water

  • Surface water

The volume not shown

  • Ground water

The volume not shown

  • Rainwater

The volume not shown

  • Waste water from other firms

The volume not shown

  • Municipal water supplies

The volume not shown

  • Formation

  1. Standards

G4-EN10 WATER RECYCLED

  1. Total volume of water

The volume not shown

  1. Total volume of water recycled and reused in % under indicators G4-EN8

No quantitative measures provided.

  1. Standards, methodologies & assumptions used

The volume not shown

TABLE 2 Emissions GRI Indicators

G4-EN 15 DIRECT GREENHOUSE GAS EMISSIONS

Level of Compliance

Partially

Not at all

  1. Gross direct GHG emissions

No quantitative measures provided.

  1. Gases included in the calculation

No quantitative measures provided.

  1. Standards used

  1. GWP rates

No quantitative measures provided.

G4-EN 19 REDUCTION of GREENHOUSE GAS EMISSIONS

No quantitative measures provided.

  1. The amount of GHG emissions reductions achieved

No quantitative measures provided.

  1. Gases included in the calculation

No quantitative measures provided.

  1. The chosen base year or baseline

No quantitative measures provided.

  1. Standards and assumptions.

No quantitative measures provided.

  1. The reductions in emissions of GHG and direct quantitative measures provided.

No quantitative measures provided.

References

Black, L., 2013. The social licence to operate: your management framework for complex times. Do Sustainability.

Gottschall, A., 2013. Increasing Glencore’s sustainable management performance (Doctoral dissertation, Haute école de gestion de Genève).

Kirschke, J., 2013. CSR, Sustainability and the Mining Business.Engineering and Mining Journal214(9), p.30.

Landén, J. and Malmberg, E., 2016. Sustainability reports: Environmental friendly or a greenwashing tool.

Mason, M., 2015. Aligning organisational environmental policy and practice in the Australian coal industry.

Oldenziel, J. and Wilde-Ramsing, J., 2010. 10 Years on: Assessing the Contribution of the OECD Guidelines for Multinational Enterprises to Responsible Business Conduct. Available at SSRN 1641036.

Sadler, D., 2004. Trade unions, coalitions and communities: Australia’s Construction, Forestry, Mining and Energy Union and the international stakeholder campaign against Rio Tinto. Geoforum35(1), pp.35-46.

Sequeira, A.R., McHenry, M.P., Morrison-Saunders, A., Mtegha, H. and Doepel, D., 2016. Is the Extractive Industry Transparency Initiative (EITI) sufficient to generate transparency in environmental impact and legacy risks? The Zambian minerals sector. Journal of Cleaner Production129, pp.427-436.

Weijermars, R., 2014. Natural Resource Wealth Optimization: Making mineral extraction equitable for natural resource holders and mining companies. Working Paper C-ENRD-002. Center for Equitable Natural Resource Development, Global Initiative. http://​ www.​ c-enrd.​ org/​ files/​ 2014/​ 02/​ C-ENRD-002.​ pdf. Accessed 31 Dec.