EHS Spend Sees Highest Volatility In Years

EHS Spend Sees Highest Volatility In Years

The latest iteration of the Verdantix EHS Global Corporate Survey has been released, enabling EHS professionals to benchmark their plans to peers, and executives at EHS consulting and technology providers to make data based planning decisions. The 2020 survey explores how global EHS spending has changed in the wake of COVID-19 and what the forward path looks like over the next 12 months.

Whilst the importance of EHS executives within organisations is clear, the presence of the global pandemic has placed a spotlight on EHS functions. Survey responses reveal record EHS spend increases over the past 12 months as firms implement COVID-19 management solutions. As the reactive phase passes and firms adopt a long-term view, the next 12 months will exhibit turbulent EHS spending patterns. Ten per cent of respondents anticipate EHS spend decreases in the next 12 months, which is the highest since the 2016 global survey. In contrast, a significant proportion (7%) expect to increase spend by more than 25%. This is a much more extreme pattern than in previous years Verdantix has collected this data. But what is driving this volatility?

Factors contributing to extreme EHS spending can be grouped into firm wide influencers and EHS specific influencers. A major firm wide influencer is the shape of the recovery path following the economic downturn and market specific turbulence (such as in the oil & gas, and retail sectors). When we analyse the EHS spending data at an industry level the pattern is consistent with expectations of a K-shaped economic recovery. EHS specific factors are also at play – depending on sector and strategy for reopening offices and factories. Unsurprisingly, half (51%) of surveyed respondents confirmed plans to increase PPE spend in 2021 compared to 2020. But we also heard in a recent Verdantix virtual event of firms running critical infrastructure (power stations, telco networks) needing to invest a huge amount in comprehensive systems such as 100% testing waves, mapping of exposure hot spots, and employee self-checking applications, in addition to more common measures.

Although volatile, global EHS spending will remain strong in the next 12 months, boosted by COVID-19 specific expenditure and a growing appetite for implementing digital technologies. If you’re interested in learning more about EHS market trends, read the latest iteration of the Verdantix Global Corporate Survey report.