Page 16 - OHS, September 2022

ESG
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great head start on ESG reporting.
Within the three ESG broad pillars, much of “environmental” is also already well reported to shareholders through EHS efffforts. These generally have included greenhouse gas, energy and water conservation, wastewater, waste and water management, pollution and compliance. Other areas, possibly new to some in EHS will have an increased focus. In the area of “social,” expect to see emphasis placed on chemical, biological and radiological impacts on people who work in communities with established businesses.
Gaddis says there’s a solid intersection within “governance” in procuring materials and managing risk. He notes that for EHS professionals, their deep expertise in managing risk will be a skill relied upon by organizations for ESG programs.
Chris Ward, a former regulator and principal health and safety inspector in the United Kingdom and a former member of the British Standards Institute committee, says EHS processes provide data for disclosure in ESG operations reporting.
“Through the implementation of and adherence to international standards in relation to these areas (of environment, social and governance)—for example ISO 14001 Environmental, ISO 45001 Occupational Health and Safety and ISO 45003:2021 Psychosocial Risks—EHS practitioners can demonstrate ongoing processes of continual improvement in these areas,” he says. “Also, by ensuring their procurement and supply chains are in conformity with these standards, investors will be reassured of the sustainability, conformity and continuity of these policies throughout an organization’s areas of operation.”
The ESG Opportunity for EHS Practitioners
Many of today’s investors are making bets on companies that are “good for the planet” and doing their part to protect people and the environment. Likewise, more and more consumers want to put their money and loyalty behind such brands.
Research shows nearly two-thirds (64 percent) of Americans say they would pay more for sustainable products and 78 percent of people are more likely to purchase a product that is clearly labeled as environmentally friendly.5,6 What’s more, 77 percent of Americans say they are concerned about the environmental impact of the products they buy.
Gartner research shows 85 percent of investors considered ESG factors in their investments in 2020.7 But the Social Science Research Network (SSRN) observes that “while corporate sustainability and ESG investing are increasingly front and center for U.S. companies,” there is a severe lack of relevant expertise among board members of large U.S. companies as only 29 percent of more than 1,100 Fortune 100 board directors examined have relevant ESG credentials.8 Help is needed and it’s a significant opportunity for EHS professionals to step in.
“Those responsible for talking about ESG at the highest level don’t understand ESG enough to know that it is EHS in many cases,” says Trevor Bronson, a corporate strategy associate and senior product marketing manager at Intelex. “A lot of the things they talk about (regarding ESG) are ultimately managed on a day- to-day basis by the EHS department. ESG in many cases is EHS.”
The ESG metrics that investors and businesses often seek
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For EHS professionals, their
deep expertise in managing risk will be a skill relied upon by organizations for ESG programs.
(IOSH) describes as the second wave of sustainability.4 ThThey explain, “having good sustainability practices and setting high standards in your business for the treatment of your workforce, communities and supply chains will reward you with stronger performance and growth.”
Jillian Stacy, head of global expert services at Enhesa, says ESG regulations are currently being created in Europe, and many countries in Asia have established requirements for ESG compliance. In fact, many regulatory frameworks now see ESG considerations as a fiduciary duty that investor organizations have to clients, which means organizations that do not fulfill their ESG obligations could face legal and regulatory challenges.
“As ESG reporting becomes more regulated—which is already happening around the world—you’re going to need verifiable data in your ESG reports,” she says. “EHS compliance data can feed into that. It’s data you’re already collecting and compiling. It’s a matter of figuring out a way to make it feed into ESG reporting.”
The Intersection of ESG and EHS
No doubt most EHS professionals would rightly declare the work they’ve been doing has aligned with many ESG principles all along. However, Gaddis notes that some in senior business leadership were too often not interested in EHS concerns unless there was a significant miss in compliance and targets, and they typically only looked at a few metrics to measure success. The outline of ESG gives EHS practitioners a platform to be a business partner that’s not simply judged from a cost-avoidance function but as a real partner in the business.
“Their work affects the non-financial impacts investors and shareholders are beginning to demand and an ethical approach to managing businesses,” he says.
There’s a clear common ground and intersection between ESG criteria and EHS. Data that’s currently being gathered by EHS systems, such as emissions tracking, climate change information and health and safety information, could likewise feed the “social” part of ESG reporting.
“There are all these topics that are the same for EHS and ESG,” says Enhesa’s Stacy. “By looking at what you’re already doing well...you have a nice starting point. There’s already knowledge that can be gleaned just by looking at EHS compliance (data and activities) to help drive what makes sense for ESG initiatives and what makes sense for ESG milestones.”
Stacy adds that EHS elements are tied to sustainability reporting, which has been around for decades. If you consider what companies report on for sustainability, a considerable
12 Occupational Health & Safety | SEPTEMBER 2022 www.ohsonline.com