Case study 2: Building a Sustainable Culture

The Australian Food Manufacturing Company (AMFC), a fictitious manufacturer of cereals, confectionary, biscuits and soft drinks, has eight manufacturing on the eastern seaboards of Australia. All of AFMC's products are made in Australia, sourced mainly from local ingredients before being shipped in trucks to distribution centres before going to supermarkets and convenience stores throughout Australia and south-east Asian and Pacific islands countries.

In July 2012, the chairman of the Board of AFMC, Mr Trevor Granville, wanted to know what the company is doing about being sustainable. AFMC has always been focused on being efficient, always looking at its cost base as it produces high volumes of product.

The CEO, George Ulrich, tasked the safety, health and environment department with formulating an ongoing process to implement sustainable practices throughout AFMC.

AFMC set about defining 'sustainability' and decided on 'the wellbeing and success of our consumers and employees, the support of our community and shareholders and the health of our environment'. This would then be measured on the metrics of environmental, social, governance and economic performance and reported on each year.

A sustainability policy was developed and placed onto the company's website and included in the starter packs for new employees. Induction program also included a reference to sustainable practices, and that all employees of AMFC must, where possible, always look to be efficient and sustainable in their roles.

By July 2014, two years of data had been collected and when reported on to the board, Trevor Granville was unhappy with what the figures said about the company's sustainability performance. Negative metrics were reported on and included: waste had not come down; truck movements were still high; power and gas usage was increasing, and employee were still being injured at the same rates as in 2011. There were good initiative that included supporting two charities, one for homeless youth in Melbourne and the other supplying food products to charities in Brisbane and Sydney.

Trevor Granville sent an email to George Ulrich informing him that at the next board meeting he has to present on the initiatives he was undertaking to turn around the metrics associated with sustainability; what processes he undertook in 2012 to embed sustainability into AFMC; his own key performance indicators relating to sustainability; and the barriers that hindered the implementation of sustainable practices.

Explain the reasons why AFMC has failed to make any improvements in sustainability outcomes after 2 years of operation