Connecting health, safety and human capital
Many are familiar with the story of Paul O’Neill, the CEO of Alcoa from 1987 to 2000 who led the company in quintupling its profits by focusing on one primary factor: worker safety. When employees develop good health and safety practices, they are more engaged, productive and loyal — all critical elements to organizational sustainability.
Recognizing this connection, in June 2011 a number of occupational safety groups launched the Center for Safety and Health Sustainability (CSHS) to advance the management and disclosure of health and safety metrics within the context of corporate sustainability reporting. CSHS now works with over 100,000 occupational health and safety professionals, publishes and funds relevant research and provides guidance to leading sustainability reporting frameworks. CSHS’s past publications and research include a current practices (PDF) guide, best practices (PDF) for sustainability reporting and a guide to sustainability accounting (PDF).
In March, CSHS hosted a precedent-setting workshop in Chicago where researchers from the Labor and Worklife Program at Harvard Law School discussed progress on a benchmark study on corporate disclosure of human capital practices and performance. The study will be released in October, but a summary of the meeting's key themes is available online (PDF).
The gathering included representatives from the leading organizations (PDF) working on corporate responsibility and sustainability reporting: the Global Reporting Initiative (GRI); the International Integrated Reporting Council; the Sustainability Accounting Standards Board; the Global Sustainability Standards Board; the International Labor Organization; and the U.S. Occupational Health and Safety Administration. Representatives from public and private corporations, institutional investors and ESG research firms also were present.
The Chicago workshop was one effort in a series of continued steps CSHS has taken to engage the sustainability field in discussing the materiality of health and safety issues, including a study published this month (PDF) on companies included in the Corporate Knights benchmark.
Researchers collected publicly available information between June and December 2016 for the Corporate Knights "Global 100" sustainable corporations list and found that health and safety issues are still not adequately addressed by companies or accurately valued by ESG ratings and rankings firms. How can a company be sustainable if it isn’t truly caring for the health and well-being of its greatest asset — human capital?
"We’ve learned through our studies that voluntary sustainability reporting lacks rigor and fails to yield the meaningful data needed to effectively evaluate corporate safety and health performance," said Kathy Seabrook, chair of the CSHS Board of Directors.
This study showed sustainable corporations made little improvement in complying with common safety and health performance indicators, finding high variability on data collection methodology, reporting formats and terms and definitions used in reporting. The results indicate that companies are still far from reaching a consensus on the workplace safety and health metrics that should be included in global sustainability indexes.
The mission of CSHS is to increase these levels, and for all organizations to consider the relevance of safety, health and the well-being of workers, customers and the community as part of their sustainable business practice.
Tying it together
CSHS is actively engaged with the GRI, which earlier this year opened a review period of the GRI 403 standards for occupational health and safety disclosure.
According to Seabrook, who serves on the review's working group, "The disclosure of data needs to be standardized to help put companies on a truly holistic path to sustainability that recognizes the well-being of workers along with the environment." GRI plans to release the final updated standard in February and CSHS and its affiliated organizations will continue to help promote such standardization.
Many other groups are working toward the same goal. In a parallel effort, the World Business Council for Sustainable Development is furthering its own Social Capital Protocol. The initiative launched in June 2015 and aims to "bring together the currently fragmented landscape of social measurement and valuation." Another development in this area is the Human Capital Coalition, an investor-led initiative that is calling on the SEC to require human capital management disclosures. By engaging such stakeholders in these discussions, CSHS hopes to help advance a standardized approach to health, safety and human capital reporting.
Get involved, go further
CSHS will host its next workshop Oct. 23 at Harvard Law School in Boston, where key stakeholders will discuss the findings from the Labor & Worklife Program’s research. Those who would like to attend and help shape the future inclusion of health, safety and human capital issues in corporate responsibility and sustainability reporting — including relevant issues, metrics and what organizations are doing — are encouraged to contact CSHS.