EHS And The Influx Of ESG: Holding True To The Pillars Of Health And Safety

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EHS And The Influx Of ESG: Holding True To The Pillars Of Health And Safety

In today’s business environment, it is unusual to see EHS mentioned without the inclusion of ESG in some manner. From events, news articles, marketing campaigns and boardroom decisions, the EHS function has found itself intrinsically linked with the ESG movement.

This is not inherently a bad thing, as it has launched the EHS function to near-centre stage, providing funding, visibility and a knock-on impact for health and safety initiatives. Great strides have been made in implementing stand-alone and enterprise-wide digital solutions that enhance the effectiveness of internal data hygiene, workflows, processes and reporting. Further positives can be seen from an environmentalist point of view: EHS operations are now tracking and reporting even more environmental and climate-change-related data, such as Scope 1, 2 and 3 metrics.

However positive this may be, the focus on ESG data, strategies and initiatives sets a dangerous precedence: an overshadowing of EHS functions’ core duties and responsibilities.

This might seem extreme, but ask almost any EHS practitioner and they will reply that they have seen their daily duties and reports grow in size and number to accommodate pressure from the ESG department. In today’s business and climate reality, it does not look like this pressure will soon abate. As such, EHS functions, service providers and vendors should consider the following when examining budgets and strategic directions:

  • Standard EHS compliance continues to present challenges.
    Globally, firms of all sizes are still working to overcome a multitude of EHS hurdles, including improving training completion rates, contractor management and process safety obligations. These longstanding standard operating procedures have seen the integration of digital technologies enhance the capabilities of EHS functions, while at the same time creating challenges associated with buy-in, configuration and execution. The complexities of implementation often require the efforts of service providers with direct expertise to assist these firms in digitizing and optimizing their new systems. Additional challenges arise around permitting and reporting, which differ vastly between regions and industries, as well as increasing regulations. Getting these requirements in order is imperative to creating a strong, resilient and robust EHS function.
  • General injury rates are declining, but SIFs have not.
    As a whole, industries have made leaps and bounds in reducing workplace injuries – but have failed to reduce SIFs. In the US, TRIR numbers have dropped from 3.43 per 100 FTEs in 2011, to 2.67 per 100 in 2021. This is the result of integrating digital solutions, creating a strong safety culture and proper training. However, management techniques and workplace processes have evolved more slowly, failing to make a significant impact on SIFs. An examination of EHS practices will see that the majority rely on lagging and reactive processes, with a need to push towards a proactive approach to counteract the rise in fatalities and preventable fatalities, which has increased since 2011. Firms and functions should be applying the same amount of effort, funding and time to initiatives that target the root causes of SIFs – such as the NSC’s Work to Zero programme – as they do to environmentally-focused ESG efforts.
  • Spending is projected to increase across core EHS operations.
    The latest data from the upcoming Verdantix EHS Global Corporate Survey has shown that over 70% of respondents expect increased investment in EHS budgets. This represents a leap over previous spending, with 35% specifically stating an increase of more than 10%. Line items such as training, incident management, safety hazards and risk management are all leaders in future spending, highlighting an understanding of their criticality alongside the ESG push. Specialized vendors and service firms will find that engagements will be picking up as EHS functions focus on enhancing their capabilities.

Nathan Goldstein

Senior Analyst

Nathan is a Senior Analyst in the Verdantix EHS practice out of the New York office. His current research agenda focuses on the intersection of sustainability and ESG trends within the EHS operational sphere. Prior to joining Verdantix, Nathan worked at Bluefield Research, where he covered the global water industry, with a focus on the energy, industrial and digital segments. Nathan holds a MSc in Water: Science and Governance from King’s College London.