2020 Sustainability Report
Committed to using financial, natural and human resources wisely without compromising the ability of future generations to meet their needs
Committed to building robust, effective risk management to quantify, qualify and mitigate specific risks that we may define or discover.
Greif mitigates risks that may negatively impact our customers through risk management and our business continuity efforts. We employ risk management processes that can increase the stability of business operations while decreasing legal liability and providing protection from events that are detrimental to the company or the environment. 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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Greif assesses organization-wide risk through our formal Enterprise Risk Management (ERM) process, which considers all Greif business units and geographies. Risk information is identified and analyzed through Greif’s Risk and Content Monitoring processes by assurance providers across the organization, including Executive Leadership, Internal Audit, Legal/Compliance, feedback from customers and investor engagement and Greif’s Sustainability Steering Committee (SSC). The SSC monitors industry reports (i.e. World Business Council for Sustainable Development (WBCSD) ESG Enterprise Risk Management Framework, WRI’s Assessing the Post-2020 Clean Energy Landscape, and CSSR’s Fourth National Climate Assessment), ESG ratings and rankings, energy pricing, evolving government regulations and programs, and holds formal relationships with ESG-specific associations and NGOs, including WBCSD and the United Nations Global Compact, to identify emerging risks that may impact our business. Information from these groups, including long-term emerging risks, is provided to Greif’s Risk Leader Committee (RLC), led by Greif’s chief audit executive, and is comprised of members of Greif’s Executive, Business Unit and Strategic Business Unit Leadership teams and Greif’s director of sustainability. The RLC identifies, ranks, reviews and prioritizes risks in conjunction with Greif’s Audit Committee to determine the most critical risks based on potential impact and likelihood to occur. Each risk is evaluated for potential opportunities and reported to the Board quarterly for approval. Risks are evaluated by the RLC to develop plans for risk mitigation and opportunity capture. This committee meets quarterly.
Climate-related risks and opportunities are integrated directly into our overall ERM process and considered alongside all information provided by assurance providers across the organization. Through this process, Greif has identified extreme weather events, raw material price and supply volatility and rising sea levels as our most significant climate risks. Additionally, in 2020 through our ERM process, we have identified pandemics as a high-risk topic. For more information regarding our climate-related risk governance, risks and opportunities, please see section C2 of our CDP response.
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. In response to the "Companies are Becoming More Environmentally Friendly" trend, we have elevated sustainability in our business strategy especially in relation to innovation, resulting in an increased focus on post-consumer resin (PCR) products, reconditioning and growth of our intermediate bulk container (IBC) reconditioning networking. 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 began executing on these learnings by incorporating sustainability updates and risk statements into our 10K and proxy statements and including ESG-related issues and risks in Leadership Council meetings. We also selected ESG as a strategic priority area for the Leadership Council in 2021, where a key focus area is embedding our sustainability priorities – climate, waste, environmental compliance, diversity and innovation – into our culture, colleagues’ daily behaviors and risk management processes. During 2021, we will begin reporting key sustainability KPIs to the Leadership Council, Executive Leadership Team and Vice Presidents on a regular basis while also providing monthly sustainability updates to the Executive Leadership Team. We are also developing a communication plan to provide regular sustainability updates to the entire organization including key updates on risks.
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. In 2020, all new Caraustar facilities were trained on the platform, which is now active across the Greif business portfolio. In 2021, we plan to conduct one or more crisis response tabletop exercises to ensure appropriate procedures are in place to respond to unforeseen emergencies.
Our Disaster Recovery/Business Continuity program, established in 2017 in our Global Industrial Packaging (GIP) 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. 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 250 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.
At the onset of the COVID-19 pandemic, we created global and regional pandemic task forces to ensure we safeguard the health of our colleagues and the continuity of supply and service to our valued customers. These task forces met at least weekly to ensure we could continue operations and maintain colleague safety. As an essential business, we were able to continue to operate at nearly all our production facilities in more than 40 countries. Our global portfolio demonstrated our ability to fulfill customer needs worldwide during challenging macroeconomic conditions. To continue delivering on our commitments to our customers, we leveraged our existing Natural Disaster Recovery Protocol. This Protocol requires that all products must be able to be co-produced at multiple facilities and that each facility must maintain an alternate supplier list for the top 35 materials used in the facility. These supplier lists are maintained to ensure continuity of supply and that Greif production can be maintained in the event a supplier is impacted by a natural disaster or other event.
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.
Employing Appropriate Insurance Strategies
Over the last few years, Greif has faced new and additional challenges because of wildfires. To mitigate risks associated with the disruptive nature of these events, we are employing new insurance strategies. We are keeping these risks at the forefront of our risk management approach and considering how the impacts of climate change may further contribute to these risks.