At the mention of the term ESG, most of us automatically default to the Environmental element. In fact, all three aspects of ESG – Environmental, Social and Governance – carry equal weighting. While the ‘E’ and ’S’ pillars are pretty straightforward, the full spectrum of Governance is not always as clear cut. In fact, the area of Corporate Governance contains many strands from differing fields, not least of which is Health and Safety. In this blog, we look at how strong H&S leadership is critical to achieving ESG excellence.
What is ESG?
Environmental, Social and Governance are the three pillars of a corporate framework on which organisations are required to report. ESG takes sustainability beyond the realm of environmental, crossing into the practice of corporate governance and social responsibility. By switching the direct focus from Environmental Management and extending it equally across these three pillars of business practice and performance, it forces organisations to adopt a broader and more holistic mindset towards their sustainability model and strategy.
EHS Leadership & Regulatory Compliance
Good Corporate Governance and robust H&S Risk Management practices are key to achieving optimal ESG. Health and Safety professionals including those falling under the EHS umbrella, are regularly charged with duties crossing H&S regulatory compliance, defining and developing H&S protocols and procedures, and oversight of Risk Management. In fact, ESG has become a key consideration during decision making processes involving culture, employees, governance and of course, sustainability.
EHS professionals are becoming increasingly aware of the need to consider all three aspects of ESG when discussing and agreeing on future practices, protocols and strategies, not least because it is expected of them by stakeholders including existing and future investors. Fundamental to the success of any ESG-based policy or strategy is regulatory compliance. Before any decisions can be made regarding potential changes, EHS leadership must be confident that they are in line with both national and EU regulations.
Safety leadership must ensure they are constantly up to date with regulations as they stand, as well as any impending regulatory or legislative change. To shore up solid corporate governance, EHS professionals must lead the way in driving organisation-wide compliance. By incorporating ESG considerations into Health and Safety best practices, EHS personnel can help drive employee safety, operational performance excellence and sustainability.
Risk Management
By building ESG considerations into H&S planning, organisations can help underpin the safety of its employees through robust risk management. In taking a 360 view of all aspects of risk, from sanitation to office lay out to manual handling, management can ensure they have put robust measures in place to mitigate risk across the entire organisations. From adopting employee-centric ergonomic practices to delivering risk-oriented training programs, organisations can deliver on their obligations both in terms of employment and H&S law. They can also fulfil their obligations under the Human Rights charter.
A Safe & Healthy Workplace is a basic Human Right
Since 2022, providing a clean and safe space for workers to carry out their daily duties has been seen a fundamental human right. Not doing so, is a clear dereliction of duty towards and respect for the workforce. Delivering on safety also includes delivering on social and environmental: employees are part of the wider social or community network whilst driving policies such optimal water and hazardous waste management are a key part of robust environmental management practices which in turn impact the local community.
In delivering a clean and healthy safe workspace, organisations are more likely to drive greater awareness and understanding of risk-averse environmental best practices which are then in turn adopted by their employees, both in the workplace and outside in the wider community. By taking a holistic view of workplace safety, EHS leadership can help promote ESG fundamentals beyond the threshold of the organisation.
Safety Leadership goes beyond H&S
Safety leadership can also make significant contributions to widespread adoption of ESG framework by incorporating all three aspects into their modus operandi. The backbone of any robust H&S management plan includes good governance, social concern and sustainability. For example, for Pharma companies the focus isn’t simply on managing internal employee safety, all measures must be taken to ensure they achieve an acceptable level of due environmental diligence and good governance when it comes to policies and systems around pollution management – chemical waste, run off, hazardous material management etc..
Safety leadership goes beyond the pale of H&S. Its reach extends across governance and social responsibility, ensuring there is widespread adoption and transparency of ESG best practices. This in turn leads to a greater value proposition for the company, increased investor interest and confidence and stronger employee buy-in and performance. By striving to achieve optimal working conditions to underpin employee wellbeing, organisations are publicly demonstrating a commitment not just to their workforce, but to strong corporate governance, accountability and the key principles of CSR.
ESG Reporting
ESG reporting, which is now mandatory for a large chunk of Irish businesses, will, going forward, ensure that leadership acknowledges employee health and safety as a fundamental right and in so doing, will strive to provide a clean, safe and risk-free work environment for workers of all levels and occupations. Such is the pace at which organisations are adapting their business practices to incorporate the three pillars of ESG that it won’t be long before there is a seismic shift towards greater social and governance standards.
In attempting to attain optimal business sustainability through diligent and accurate ESG reporting, many organisations will simultaneously achieve greater levels of systemic or operational consistency across the three avenues of Environmental, Social and Governance. This in turn, will lead to better working conditions including cleaner and safer workplaces and more robust strategies in terms of environmental management in compliance with relevant regulations and laws.
It goes without saying that those companies upon which it is incumbent to deliver ESG reporting will achieve improved standards of employee health and safety. Safety leadership now has a pivotal role not just in delivering optimal worker wellbeing but in helping organisations achieve ESG excellence. Going forward, if not already, EHS professionals will be key contributors to defining and delivering corporate ESG initiatives.
No longer will ESG be seen as an ‘environmental thing’, it will be seen in the round as a strategic framework upon which future growth, performance and reputation will based.
CG Business Consulting and ESG Reporting
CG Business Consulting supports its clients to plan for and adopt the ESG framework. Our consultants work with leadership and their EHS teams to curate a best-fit process-based management system to help drive awareness and underpin adoption of ESG best practices. We partner with our clients to ensure the seamless integration of a management system tailored to meet their existing operational and future business requirements. In compliance with current legislation and moulded to meet the everyday demands of a busy organisation, these risk and people-centric management systems can help businesses to establish good governance, fulfil social obligations and achieve sustainability. This optimum level of ESG excellence can be easily arrived at through the implementation of ISO-driven management systems based on globally recognised standards such as the ISO 45001 Occupational Health and Safety standard.
In addition to the ISO 14001 Environmental and ISO 9001 Quality standards, with which ISO 45001 can be integrated to form a fully fledged ESG-focussed management system, ISO 45001 can act as a robust guide to Safety leadership, helping them to define, document and deliver risk-oriented and employee centric H&S policies, procedures and processes.
Combined, these three pillars of the ISO standards portfolio can ensure any organisation seeking to achieve ESG excellence will do so but not without the support of and contribution from Safety leadership, whose role is pivotal to the success of any current or future ESG-oriented business model.
