2019 Sustainability Report
Committed to using financial, natural and human resources wisely without compromising the ability of future generations to meet their needs
Maintaining our commitments through difficult situations.
Greif mitigates risks that may negatively impact our customers through risk management and our business continuity efforts. By focusing on effectively managing our risks, we ensure quality in our products, safety of our colleagues and are able to maintain commitments to our customers.
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In conjunction with other internal and external sources that are considered in our ERM process, the trend report improves our ability to forecast and plan for long-term trends that may impact our business in the future. For more information regarding our trends report, please see the Innovation section of our Sustainability Report.
In 2019, Greif participated in a working session led by WBCSD to better understand how to consider and incorporate environmental, social and governance risks into our ERM process. Through the workshop, we discussed opportunities to better align risks that are communicated in our financial reporting with our sustainability risks, improve the line of communication regarding enterprise risks between our RLC, Operations, Executive Leadership Team and Board and better incorporate our preparedness to respond to enterprise risks into our assessments.
In 2020, we will be reviewing the recommendations that we developed from the workshop and the impact they may have to our ERM process. We will continue collaborating with WBCSD to evaluate our climate risks specifically and have begun conducting a scenario analysis in support of that work. The ERM program is being updated to expand the risk identification process, enhance the risk assessment process, engage with other companies on ERM best practices and improve engagement and awareness.
To improve our ability to respond to potential crises, we launched a Crisis Management Program in 2019. Greif partnered with a third-party mass notification system to launch an alert system capable of notifying and updating our colleagues via text message, phone call, email and smartphone app during emergencies and significant situations that pose danger or disrupt work operations. The system is also used to convene Greif’s Crisis Response Team, a team of executive leaders responsible for coordinating communications and response to crises and executing Greif’s Crisis Communications Playbook. The system is currently active for all legacy Greif facilities and colleagues in the United States and will be introduced to all global and legacy Caraustar facilities in 2020.
Our We Got Chu program, established in 2017 in our Rigid Industrial Packaging & Services (RIPS) business, manages risk and business continuity through inventory and production redundancy capabilities, facility risk assessments and proactive labor relations. The program outlines a 25 step process to identify customer orders that may be impacted if a disaster impacts one of our facilities, identify alternative products that meet customer specifications and facilities that are able to produce the products our customers have ordered. We conduct random mock disasters monthly to ensure the process is understood in the organization and can be implemented should a disaster occur. We have conducted 24 mock disasters since introducing the program. The program, and our associated Disaster Recovery Business Continuity policy, are reviewed annually. Colleagues from sales, customer service, operations, marketing and logistics administer the program in tandem with business unit leadership.
Greif’s global network of 290 locations allows us to manufacture identical products at multiple sites, giving us the flexibility to shift production based on inventory, customer needs or in the unlikely event a shutdown would occur. This capability is enabled by centralized inventory management and our robust Sales and Operations Planning process (S&OP), which allows for visibility into raw and finished good materials across our facilities. Each facility multi-sources raw materials, ensuring production will not be interrupted due to delays or shortages from a supplier.
Greif’s facilities undergo loss control engineering inspections by our property insurance company periodically. These inspections are conducted by engineers and focus on identifying risks to the facility, including those that may be caused by natural disasters, and ways to reduce and control those risks. We make capital investments in our facilities to mitigate the risks identified in these inspections. For example, Greif recently opened a new facility in Pennsylvania. During the site selection process, we evaluated the risk of flooding to ensure the new facility was not located in a flood zone. We also installed a custom designed sprinkler system to best protect the facility in the unfortunate event of a fire.
We also consider the risk of labor disputes to business continuity. We manage collective bargaining agreements on a two-to-three-year timeline, not simply when a negotiation must occur. Our senior leadership actively builds relationships with union leadership and members in each plant. This proactive approach ensures positive labor relations and business continuity.
Greif has not experienced a work stoppage since 2014, when we experienced a labor strike and illegal occupation at a facility in Turkey. In response to the stoppage, Greif conducted in-depth focus groups with management and line colleagues to gain a deeper understanding of the issues that led to the strike and occupation. We implemented new compensation and benefit plans, safety processes, hiring practices and training to address the concerns raised by our colleagues and created a compliance manager position at the facility to help build and strengthen local relationships. From May 2014 to June 2015, Greif directly hired and unionized 1,300 workers. The workforce became the largest non-government direct hiring in our industry in Turkey–where most workers are hired as sub-contractors–and signaled a new approach to hiring in the country. During this period, we shifted production to other sites, ensuring we kept our customer commitments.
We continue to build on our reputation as a model employer in Turkey. Turnover in the facility has reduced from 36 percent in 2014 to 10.3 percent in 2019. We recently implemented our Gallup Q12 Colleague Engagement Survey to create a formal forum for colleague feedback, including those in Turkey. To learn more, please visit Talent Attraction, Development & Retention.
Maintaining Our Commitments Through Natural Disasters
In 2017, Greif’s North American operations were hit by hurricanes Harvey and Irma, resulting in $5.3 million of impact to our business. Despite the impact, our risk management and business continuity practices allowed us to meet our customer commitments during recovery without declaring force majeure. Greif supported our colleagues directly impacted by the hurricanes by continuing to pay wages during the week production was down, paying for hotels and rental cars and setting up a Wish List for colleagues in North America to purchase items for their peers. Greif also matched colleague cash donations to the Red Cross to support relief efforts, donating a match of $11,745.
In 2019, a Greif facility that was previously part of Caraustar was forced to evacuate in advance of a hurricane. The facility ultimately was shut down for a week, however customer demand was able to be fulfilled at other Greif facilities.