How can we support better environment, health and safety outcomes more effectively and efficiently?

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Part 1

Managing environment, health and safety (EHS) risk is now recognized globally as fundamental to workplace productivity. The following article presents a model for organizations to consider how to move up the maturity curve and become more effective and efficient in managing EHS. It also introduces in more detail, as part one of a two-part discussion, three of the core levers related to an organization’s leadership, assurance framework and technology.

  • Leveraging maturity models to drive step change improvement

    EHS activities have a solid history in striving for compliance (adherence to mandated organizational and legislative requirements). While this has been an important driver, it doesn’t give an overview of an organization’s maturity in managing an ever-increasing set of EHS risks. Organizations should look at how they can effectively and efficiently manage EHS outcomes.

    One noticeable aspect of EHS that may not appropriately be addressed are employee motivations. Often organizations are only tapping into employees’ extrinsic motivators, leaving the more powerful and sustainable intrinsic motivators untapped.

    • Extrinsic motivators relate to the willingness to follow a rule or a procedure mainly because “I have to.” The reliance is on an externally driven energy, for example, avoiding getting into trouble by following the rules when someone is watching me.

    • Intrinsic motivators are a result of the fundamental understanding of the personal value of a situation. The reliance is on an internally driven energy, for example, gaining the opportunity to go home to my family if I do my work in a safe manner.

    It may therefore be time to create a shift and harness the power of employees’ intrinsic motivators to move ahead to a new and likely more effective way of managing EHS. An organization that is willing to continuously challenge its approach to EHS management and tap into more than extrinsic motivators, could not only see EHS performance improvement, but also see the EHS function act as a key driver of effective organizational performance.

    The question therefore is, how do organizations, and more specifically business leaders, begin to create a step change towards an EHS future driven by employees’ intrinsic motivators? The answer starts with the way EHS maturity is assessed.

  • The future of EHS maturity

    There is evidence that the shift in thinking has already begun, with a number of business leaders now accepting that compliance, although essential to attaining an established level of EHS function, is not the end game. They understand that there is a side to the EHS spectrum that can take them to the next level of maturity and performance.

    The challenge is that to move beyond an EHS plateau, business leaders need a method by which to assess their current state of EHS function in order to set a more progressive path forward. A method that is relevant for today’s operational context, as well as focusing on the future of EHS. A method that takes an overall perspective when it comes to EHS and places leadership at the center of the approach is the most effective means to tap into employees’ intrinsic motivators.

    Why are leaders so important to an organization’s EHS success? When a leader shares knowledge, is open about what they do or do not know, is transparent and provides open access to information, they build trust. When a leader is highly trusted, they likely will in turn receive better and more accurate information, and therefore have more knowledge to make better decisions, reinforcing trust in their leadership.

    Organizations that focus their efforts on shared trust and knowledge flow are more likely to experience workforce alignment driven by an intrinsic motivation to advance EHS function and performance. From our experience, EY has identified seven levers that can be drawn on to build shared trust and support knowledge flow.

    These seven levers can be used as the basis for an EHS Maturity Model that can help business leaders to gain a more relevant and holistic perspective on their organization’s EHS maturity and more importantly understand the path towards a more effective and efficient EHS function.

  • Seven levers for EHS maturity

    EY - How can we support better EHS outcomes?

    EY - How can we support better EHS outcomes?

    By understanding how their organization is performing against each of these seven levers, business leaders can proactively and strategically capitalize on the opportunities within each lever to drive intrinsic employee motivators to move beyond compliance. This likely will facilitate an EHS function that can continuously adapt in times of change to improve and sustain its EHS success.

  • Exploring three fundamental EHS levers for intrinsic motivation

    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

    Case study

    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

    Technology

    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

    Case study

    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.

Further detail on the other levers will be provided in Part 2 of this series.