The Role of Worker Safety and Health in Sustainability: Current ... s/eeiFall2013/Sustainabi… ·...

Tom Cecich, CSP, CIH

Chairman, Center for Safety and Health Sustainability

October 7, 2013

The Role of Worker Safety and Health in Sustainability:

Current Challenges and Opportunities

WHY SUSTAINABILITY?

Sustainability

The Brundtland Commission of the United Nations on March 20, 1987: “sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Sustainability is generally considered to be the combination of: (1) Economic (2) Environmental (3) Social principles that when balanced lead to a productive future.

Sustainability May Also Be Viewed as the Four “P’s”

Universe of ESG Issues and Opportunities

Source: Hauser Center for Nonprofit Organizations at Harvard University

Source: Hauser Center for Nonprofit Studies, Harvard University

Importance of Sustainability

Importance of Sustainability

To corporations: • 93% of global CEOs surveyed said that they felt

sustainability issues are critical to their companies’ future success.

• 96% believe that sustainability must be fully integrated into a company’s strategy and operations (up from 72% in 2007).

• Over 3,000 corporations participated in sustainability reporting or reporting for similar issues in 2008 (up from 26 corporations in 1992).

• Of the 250 largest global companies, 95 percent now report on their behavior on key societal issues – a 14 percent increase since 2008

Importance of Sustainability

To investors:

• Socially Responsible Investing, or SRI, now accounts for almost $4 trillion of the $25.1 trillion, or 16% of the total invested in the American marketplace.

• Nearly 50 socially responsible investing (SRI) indices exist.

• There is a movement to include corporate social responsibility reporting as part of integrated reporting requirements.

TRENDS IN REPORTING

Existing Sustainability Indexes (from rating organizations)

• The Global Reporting Initiative • Dow Jones Sustainability Index • The Pacific Sustainability Index • FTSE4Good Index • Dozens of Socially Responsible Investment Funds • Financial Analysis and Intelligence Firms

– Bloomberg – Thomson-Reuters

• Sustainability Accounting Standards Board (SASB) • Wal-Mart Supplier Sustainability Assessment

Why Safety and Health as Part of Sustainability?

• 2.3 million people killed by work accidents and disease

• 337 million work accidents

• 6,300 deaths per day (one every 15 seconds)

• 160 million people with occupational disease

• around 4% of world GDP = occupational accidents and diseases

Source: ILO

Why Safety and Health as Part of Sustainability?

NY Times – 9/12/12

AP – 4/25/2013

OHS Sustainability Has Important Business Drivers

High Profile Tragedies Have Highlighted the Importance of Safety and Health in Sustainability

The Big Unknown – Occupational Illnesses -Raleigh News and Observer 4/5/2013

NIOSH Science Blog – June 13, 2011

• Safety Has Not Been Asked to Prom

– “Environmental stewardship and occupational safety share considerable overlap. Both are key sustainability issues, yet the green movement has outstripped workplace safety. What can OSH learn from green?”

The Status of Safety and Health in Sustainability

• No agreement on the key performance indicators to measure sustainable safety and health performance

• Reporting on safety and health performance is not comprehensive

• Most corporations include safety as part of their annual corporate social responsibility or sustainability reports, but the focus tends to be on lagging indicators

• The scope of the questions on many of the widely recognized global indices is limited, terms are undefined, and the focus is on results rather than process

• There is no widely accepted definition of “safety and health sustainability”

The Way forward….

• The Center for Safety and Health Sustainability (CSHS) is a global collaborative effort among the American Society of Safety Engineers (ASSE), the American Industrial Hygiene Association (AIHA), and the Institution of Occupational Safety and Health (IOSH)

– A 501(c)3 not-for-profit organization launched in 2011

– Represents 100,000 workplace safety and health professionals worldwide

CSHS Vision

For all organizations to recognize their responsibility to ensure that the protection of human life and the safety, health, and well-being of workers, customers, and neighboring communities is among the primary considerations in any business practices, operations, or development.

CSHS Goals

• Goals – To provide a strong voice and comprehensive leadership for

safety and health in shaping sustainability policies

– To educate the business community on the importance of safety as part of good corporate governance and corporate social responsibility/sustainability

– To provide new insights into the measurement, management, and impact of safety and health sustainability

– To be a recognized thought leader for sustainability and corporate social responsibility

CSHS Webpage – www.CenterSHS.org

New Research – February 2013

Examines the occupational health and safety practices of the world’s 100 top rated sustainable companies

(as reported by the Corporate Knight’s 2011 Global 100 Most Sustainable Corporations in the World)

Research Methodology

• Selected a recognized rating organization that publishes an annual ranking of the top 100 sustainable organizations – Corporate Knights (CK)

• Examined publicly facing reports of all one hundred organizations for statements about OHS performance

• Specifically evaluated reporting on GRI 3.1 OHS indicators

• Evaluated reporting on proposed CSHS GRI 4.0 OHS indicators

• Assembled conclusions from reporting data

• Not intended to criticize individual companies or CK

Research Findings

• High variability in degree of reporting and terms making comparison across organizations difficult

• Very low (<10%) reporting to GRI indicators • Reporting for I&I rates relatively high (75%) but

formulas widely varying • Reporting very low for contract/temporary

workers • No organization reported on fatal occupational

diseases • High number of fatalities (>10) reported by 5

organizations. One reported 49 fatalities in past year

So, what’s next?

So, what’s next? (and who all is interested in this?)

So, what’s next? (and who all is interested in this?)

aka – What are the external drivers?

So, what’s next? Who are the external drivers?

• Global Reporting Initiative (GRI)

• Integrated Reporting

– SASB: Sustainability Accounting Standards Board

– IIRC: International Integrated Reporting Council

• GISR: Global Initiative for Sustainability Ratings

• Center for Safety and Health Sustainability

Global Reporting Initiative (GRI)

Global Reporting Initiative (GRI)

• A network-based organization, draws participants from global business, civil society, labor, academic and professional institutions with the core goal of mainstreaming the disclosure on environmental, social and governance performance.

• GRI’s Sustainability Reporting Guidelines have gained

widespread adoption as the de facto global standard for CSR reporting

• 80 percent of G250 are aligning to GRI standards

• 45% increase in reporting in North America in past year

The GRI Guidelines

Environmental

• EN 3 - Direct energy consumption by primary energy source

Labor

• LA 7 - Rates of injury, occupational diseases, lost days and absenteeism, and number of work related fatalities by region.

Human Rights

• HR 4 - Total number of incidents of discrimination and actions taken

Product Responsibility

• PR 6 - Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, ad sponsorship.

Economic

• EC 4 – Significant financial assistance received from government.

American GRI reporters

GRI Sector Leaders:

GRI 3.1 Indicators

Integrated Reporting

Combining Audited Financial Reports with Audited Sustainability Reports

Combine Financial and Sustainability Reporting

Integrated Reporting

• SASB: Sustainability Accounting Standards Board

• IIRC: International Integrated Reporting Council

The Sarbanes-Oxley of Sustainability Reporting?

Global Initiative for Sustainability Ratings (GISR)

• Billions of dollars of capital flow are are based on what 100+ raters decide • How sustainability ratings are determined is neither transparent or comparable

DJSI Occupational Safety and Health Ratings

Beverage

Beverage

Oil and Gas

Utility

Consumer Products

CRO Selects Top 100 DJSI Selects Top 10% Newsweek rates 500 Companies

Wide Variation in Sustainability Ratings

CENTER FOR SAFETY AND HEALTH SUSTAINABILITY

CSHS GRI INITIATIVE

Influence the next generation of occupational health and safety

indicators to be meaningful and more accurately reflect an organization’s commitment to responsible OHS

performance

CSHS Proposed Indicators

1. Lost-time injury and illness incidence rate, lost-time injury and illness severity rate, and number of fatalities (all employees – 5 year period)

– Current reporting practices* – employees

• Lost time Injury Frequency Rate

– 57%

• Occupational Injury and Illness Frequency Rate

– 51%

• Fatalities

– 45%

*sampling of 65 companies reporting sustainability performance from the “Best in Social Responsibility,” “Global 100 most sustainable corporations,” “Super 50 from Forbes”

CSHS Proposed Indicators

2. Lost-time injury and illness incidence rate, lost-time injury and illness severity rate, and number of fatalities (all contractors – 5 year period)

– Current reporting practices* – contractors

• Lost time Injury Frequency Rate

– 28%

• Occupational Injury and Illness Frequency Rate

– 26%

• Fatalities

– 29%

*sampling of 65 companies reporting sustainability performance from the “Best in Social Responsibility,” “Global 100 most sustainable corporations,” “Super 50 from Forbes”

CSHS Proposed Indicators

3. % of owned or leased work locations that have implemented an occupational safety health management system that meets recognized standards – Current reporting practices*

• Organization has implemented an OSH program that meets recognized standards – 48%

• OSH program covers all of the organization’s business units, operations, facilities, subsidiaries, contractors, and suppliers – 32%

*sampling of 65 companies reporting sustainability performance from the “Best in Social Responsibility,” “Global 100 most sustainable corporations,” “Super 50 from Forbes”

CSHS Proposed Indicators

4. % of owned or leased work locations that have had their occupational safety health management systems audited by an independent third-party

– Current reporting practices*

• Processes are in place to verify compliance with the OSH program – 45%

*sampling of 65 companies reporting sustainability performance from the “Best in Social Responsibility,” “Global 100 most sustainable corporations,” “Super 50 from Forbes”

CSHS Proposed Indicators

5. % of direct or first tier suppliers’ facilities in developing countries that were audited for compliance with safety and health standards

• Current reporting practices* – Policy/Code (or other relevant documentation)

» 54%

– Communication of policy/code to suppliers or some monitoring of supply chain

» 49%

*sampling of 65 companies reporting sustainability performance from the “Best in Social Responsibility,” “Global 100 most sustainable corporations,” “Super 50 from Forbes”

MOVING FROM OHS INDICATORS TO AN OHS REPORTING

FRAMEWORK

(OR OHS SUSTAINABILITY PERFORMANCE STANDARDS)

Essential Elements of Safety and Health Sustainability

• Values and Beliefs – Safety and Health Commitment – Codes of Business Conduct

• Operational Excellence – Integrated and Effective Safety and Health Management System – Professional Safety and Health Competencies – Worker Engagement in Safety and Health

• Oversight and Transparency – Executive Leadership Oversight of Safety and Health – Transparent Reporting of Key Safety and Health Performance

Indicators

QUESTIONS?

FOR INFORMATION CONTACT:

TOM CECICH: TOM@TFC-ASSOC.COM

919-601-5224