Current global trends point directly at leadership; governance and an organization’s assurance frameworks; and technology, as three key factors that business leaders should gain an understanding of, to navigate through a changing operational landscape. These three factors are also of most relevance when it comes to EHS success in that fast evolving business environment.
Leadership and reporting
Leaders can help to build a culture of shared trust and knowledge flow to create a more aligned workforce that is internally driven to bring the EHS strategy to life. To date, the focus has been on setting the right commitments at the top level of the organization and now it is on the right tone from the top. However, more mature organizations have taken this as a step further to ensure leaders, including the board and senior management:
Mature organizations use a mix of performance indicators including:
- Lag - output measures based on historical data, generally related to incidents (e.g., lost time injury frequency rates)
- Lead - input measures that demonstrate an outcome may be imminent (e.g., predicting near miss events)
- Positive performance - measures of management system compliance (e.g., audit action closures, training completion rates and safety culture survey results)
- Have a visible and genuine commitment to EHS and lead by example to demonstrate EHS behaviors they want to see in the workforce
- Engage with employees on EHS issues (including promoting and participating in two-way interactions) and inspire and foster a positive EHS culture
- Provide clear and concise performance expectations that are tied to role descriptions and supported with guidance and knowledge sharing
- Consistently recognize and reward EHS behaviors aligned with the EHS vision and the organization’s values and ensure workers value the reward and recognition systems used
- Receive relevant, robust and timely information relating to EHS performance, risks and outcomes of an organization’s assurance activities regularly, and a mix of lead, lag and positive performance indicators are used to measure performance
EY helped a large energy distributor develop and progress its EHS maturity. The client used maturity assessment data to create a blueprint for a five year EHS maturity advancement strategy with leadership as the key component. EY collaborated with executive and EHS management to execute the EHS transformation strategy. A key component of this was an EHS development program based on shared and transformational leadership. The EHS leadership program extended to third party partners. The program contributed to this energy distributor advancing its overall EHS culture maturity to a proactive state with a more than 50% reduction in key EHS performance indicators such as Lost Time Injuries (LTIs) over a five year period.
Governance and assurance
Having established a strong focus on leadership and setting the tone from the top, it is imperative that governance structures and assurance frameworks are established to support the leadership agenda.
Better practice EHS assurance frameworks articulate how structure, coverage, approach and resourcing will be considered:
- Structure - where assurance fits within the organization’s structure and functions
- Coverage - the scope of assurance such as operational versus strategic risks, site based risks versus organization-wide
- Approach - methods employed to plan, execute, monitor and report on assurance
- Resourcing - the model used to perform the assurance program (e.g., co-source or out-source)
Mature organizations have:
- A clear governance structure in place that is representative of EHS risks and has clearly defined accountabilities
- A board and executive management that understand the hazards and risks associated with its operations and contribute to the development and communication of the EHS vision and goals
- A clearly designed and defined assurance framework that considers “three lines of defense” and is relevant for the EHS risks associated with the organization’s activities
- Personnel performing EHS assurance activities that are appropriately skilled, qualified and experienced
- Processes that ensure outcomes from EHS assurance activities inform decision making, are effectively addressed and are used to drive continuous improvement
Not knowing what you don’t know is a major risk to organizations, with the appropriate capture and analysis of EHS data being vital to help reveal blind spots for leaders and the board.
Mature EHS organizations are establishing digital strategies to ensure:
- Digital technology is used to capture EHS data and information and are integrated into wider organizational systems in order to identify trends and changes in EHS performance, behaviors and functions
- The workforce engages effectively with digital technology and knows when it can be used to benefit performance
- EHS technology is used to capture and analyze data and to predict future performance or incidents
EY assisted a global manufacturer with executing an enterprise offering for an EHS management information system (EMIS). The client wished to use the EMIS to collect, manage and analyze thousands of EHS data points, including air and water emissions, safety incidents and site chemical inventories. EY performed design and configuration services to align the technology with current EHS processes and procedures. We assisted with developing dashboards and analytical reports and performed change management services for over 10,000 employees at nine major manufacturing facilities and 14 distribution and remanufacturing centers. The workflows, notifications and data from this will help the client to streamline and standardize EHS management, track compliance activities better and conduct analysis to identify and address EHS risk
Business leaders should challenge their approach to EHS by continually performing a holistic assessment. The EY EHS Maturity Model helps organizations to not only create, but also drive a new EHS paradigm to tap into what drives human intrinsic motivation. Strong leadership, robust governance and assurance frameworks and leveraging digital technology can help drive efficiency and effectiveness across EHS, now and into the future.