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Sustainability reporting has become a key focus in C-suites and Board Rooms world-wide. Gaining attention in the late 1990’s, reporting on social responsibility was initially met with resistance from corporate managers. It was sometimes seen as a resource utilization with an ill-defined benefit; and there was initially a willingness to report only information that cast the enterprise in a “favorable” light. However as the financial community began to take notice of non-financial issues the idea of sustainability reporting really began to gain traction. In fact, a 2013 survey found that nine out of ten investors, analysts and portfolio managers indicated that non-financial performance factors were integral to their investment decision-making within the last year.
The vision of sustainability reporting has been sometimes confusing, covering a wide range of environmental, social and governance issues, with the ultimate goal of protecting, or “sustaining” our global natural resources. Metrics, definitions and even issues reported varied from one enterprise to the next, and there was little standardization in approaches to reporting. A growing interest in “social investing” and the influence of the millennial generation and their value systems have continue to drive this initiative. Two organizations – the Sustainability Accounting Standards Board (SASB) in the US, and the Global Reporting Initiative (GRI) internationally – have worked extensively to bring some semblance of order and uniformity to the sustainability reporting process.
Sustainability reporting has evolved far beyond the early concepts of limiting resource consumption and reducing waste generated. The issue of enterprise human capital has taken a firm position as one of the six standard capital metrics now recognized in the sustainability arena.
Sustainability offers Occupational Health & Safety (OHS) professionals the opportunity to gain new credibility and support for the programs we have worked to implement. In order to ride this wave OHS professionals must embrace this new spotlight on performance; learning the new language and nomenclature of sustainability, with renewed focus on risk management, and in particular risk mitigation, and seeing the larger picture throughout the supply chain – from raw materials to the finished product and interactions with the end user. Sustainability places a laser focus on the strategic identification and tracking of Key Performance Indicators (KPI).
An EI client recently obtained registration of their North American occupational health, safety and environmental programs to the requirements of ISO14001/OHSAS18001. The program involved a fast tracked plan requiring enormous effort and resources, and was accomplished at the direction of the organization’s CEO. As you are most likely aware, these registrations incorporate many themes in common with today’s sustainability metrics; including KPIs, risk management and mitigation, employee involvement; and goals, targets and objectives. Upon achieving this coveted status the CEO distributed a page long letter to the entire organization, recognizing the contribution and efforts of all involved, stating:
“These consensus standards are considered the world’s benchmark for EHS Management Systems and help companies access new markets, level the playing field for sites with differing regulatory environments and facilitate free and fair global trade. Achieving this milestone has a significant impact on maintaining our position as a market leader in sustainability, and further supports EDP’s position in the Dow Jones Sustainability Index.”
Clearly, this CEO recognizes the contribution of OHS to his company’s success. However that level of attention comes with heightened accountability and scrutiny; and a focus on results. With the notable exception of illness and injury statistics, many OHS professionals have focused more on the “right thing to do” and less on numeric descriptors of OHS programs. Sustainability is forcing a change in that mindset. To be successful in this new arena, today’s OHS professionals must hold their programs more accountable; with more effective quantitative rather than qualitative objectives and targets. Resources are available to chart a sustainability course. The Center for Safety and Health Sustainability (CSHS) was founded in 2011 as a non-profit resource to provide OHS professionals with a stronger voice in shaping sustainability policies and enhancing health and safety sustainability throughout the global workplace.
CSHS has recently published the Best Practice Guide for Occupational Health and Safety in Sustainability Reports. The Guide provides a template for both essential and optional elements of effective OHS sustainability reporting, complete with OHS metrics and definitions. Key OHS metrics recommended in the document include:
- Lost time injury and illness frequency rates, severity rates and number of fatalities for employees/workers and contractors.
- Percent of owned or leased manufacturing, production or warehousing facilities that have implemented an OHS management system that meets nationally or internationally recognized standards or guidelines.
- Percent of owned or leased manufacturing, production or warehousing facilities that have had their OHS management systems audited.
- Percent of direct/first tier suppliers’ facilities that were audited for compliance with OHS standards.
Embracing this heightened awareness and scrutiny of OHS management systems and outcomes will develop new advocates in the C-Suite and Board Room. Enterprising OHS professionals will find new ways to leverage this attention and support; in energizing, improving and executing efforts to protect and sustain human capital – a resource critical to any organization’s success!
Contact any of the EI OHS professionals to discuss ways to develop and improve your OHS KPI and sustainability metrics. We can assist in charting a course for integrating these new reporting requirements into your existing programs; or help in establishing programs and policies to bring your organizational OHS performance to the next level; from the basic building blocks to ISO/OHSAS registrations.