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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
