Ethical Performance
inside intelligence for responsible business


Time to focus on the ‘health’ of global supply chains

December 2011

Occupational Health and Safety (OH&S) is an integral part of sustainability, fitting well into the social dimension of the triple bottom line. It features in all the key global reporting frameworks and is an important element of international standards.

OH&S has benefited over the last two decades from being part of the sustainability family, with the increased visibility of performance elevating it from being mainly an operational issue to one of strategic importance in many global companies. Proactive supporters have been able to use the opportunities given by membership indices, like the DJSGI and the GRI reporting requirements, to get OH&S on the corporate agenda. This has helped these companies achieve improved OH&S performance, as well as benefit from the increase in shareholder value that membership of these indices can bring.

However, even though fatality rates have reduced significantly over the last decade, the global OH&S challenge remains huge – it is estimated that every day 6,300 people are killed by work place accidents and occupational ill-health. The financial cost to the global economy is vast at an estimated $1.25tn a year. In the UK alone, it is thought that poor OH&S costs business $12.9bn annually.

So there is a lot to do. Global companies have a key role, not only in protecting their own employees, but in raising the standards of supply chains. This should include suppliers of contract labour as well as products. Not only is this the right thing to do, it is also good business: research shows that investing in labour-friendly practices improves productivity and market confidence. However, there are still many global companies where OH&S is not on the corporate agenda, believing that provided they comply with the local legal requirements all will be okay. It seems that global companies do not always make the connection between OH&S and sustainability.

What is the solution? The reporting frameworks need to more accurately reflect the best practice in global companies. We need to build on the good work done already, but the starting point needs to be a requirement for global companies to have a strategic plan for OH&S, setting out their priorities and key actions over a period of three to five years.

Lead indicators are needed to encourage greater investment in leadership, behaviour and systems to ensure the right OH&S corporate culture is developed. There is also a need to place more emphasis on the ‘health’ in OH&S, which accounts for 86% of work-related deaths each year. It is also important that the global OH&S profession participates more actively in the sustainability debate, acting as a catalyst for change. So, it is encouraging to see that the USA and UK professional bodies have recently launched a Global Centre for Safety & Health Sustainability. This centre will be an organisational stakeholder of the GRI and provides an excellent opportunity to influence the shape of OH&S reporting in G4.

It is important to ensure that any changes are reflected in the other global reporting frameworks, so that we have a co-ordinated and consistent approach to OH&S in the future.

Marc Slater is a consultant and former head of OH&S for ABB

Marc Slater | Global | Health and safety


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