Proactive Resilience: Future Proofing EHS Functions For Emerging Risks

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Proactive Resilience: Future Proofing EHS Functions For Emerging Risks

Over the past three decades, the EHS function has evolved from being primarily pen-and-paper based to a modern-day operation that leverages advanced digital technologies to complete its wide-ranging duties. This evolution, driven in part by advancements in technological capabilities, is a response to the broader avenues of risk that are now present in modern facilities and work environments. Over the past decade alone, the EHS function has grappled with the COVID-19 pandemic and knock-on challenges that have strained supply chains – while climate change is altering standard weather patterns. Gone are the simple challenges and risks of compliance and standards; the EHS function of the future must be resilient and skilled in adapting to novel risk vectors. Some notable risks that an EHS function of the future needs to be vigilant of are:

  • Increased cybersecurity threats.
    While digital solutions provide immense benefits for data collection, workflow optimization and streamlining processes, they also come with an inherent threat simply because they are digital. Risks arise due to the potentially sensitive nature of the data these solutions collect and transfer, with EHS vendors and functions contending with GDPR requirements and data auditability standards imposed by reporting mandates. More extreme is the threat of hacking or other illicit actions taken by ill-intentioned third parties. These can range from simple data hostage situations that demand a ransom to alterations in safety processes that can see critical infrastructure overloaded or sabotaged to produce potentially catastrophic results.
  • Heightened ESG liability and reputational risk. 
    EHS functions are overwhelmingly being leveraged to supply data to ESG reporting, and rightfully so. Their historical positioning as the initial stewards of environmental compliance has directly contributed to the influx of investment in increased data collection and sustainability initiatives. However, one of the largest drivers – and thus requirements – around this data is its audibility, similar to financial data. Ensuring that ESG data is auditable not only requires stringent workflows and unique configuring, but proper data hygiene and cooperation. On top of all of this, reporting opens up an additional risk vector: environmental accountability. Disregarding the more extreme risks of publicly visible accidents or disasters, insufficient or even accurately reported data can contradict firms’ public-facing environmental statements and expose them to greenwashing allegations.
  • Disconnection between the boardroom and the front line.
    Given the nuances of frontline risk and incident reporting when aggregated and reported in boardrooms, EHS functions are in danger of running afoul of a disconnect between boardroom executives and operational initiatives. Executives face different types of risks – such as legal liability and share price dangers – that, while composed with good intentions, can be translated into ineffective policies imposed upon EHS teams. As the risks they face grow in both size and breadth, understanding how these initiatives and KPIs can be translated into meaningful initiatives is a must for EHS operations of the future.

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.