Integrated reports on performance tell a business’s stakeholders of its ability to create value in a sustainable way, and they feature data on a range of non-financial matters.
It means indicators on so-called ‘human capital’ issues considered material, such as the safety and health of a workforce, will be disclosed alongside balance sheets and statements of cash flows.
The trend is down to an increasing recognition among business leaders of the importance of safety and health to decisions made on financial investments – and the accounting principle for organisations to be transparent in this decision-making process.
‘With sustainability as the impetus, we will witness a dramatic transformation in the way that OSH is viewed and managed by organisations in the coming years,’ says the report, The Accounting Revolution and the New Sustainability: Implications for the Occupational Safety and Health Professional.
‘The new focus on human capital will lead to increased recognition by boards of directors that OSH is a material issue that plays a crucial role in establishing the culture, values and ethics of the organisation.’
With integrated reports expected to become standard business practice, CSHS outlines a set of recommendations for OSH professionals to prepare for the move. It recommends:
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Develop a new financial literacy – an understanding of the transformation taking place in the corporate world regarding accounting for non-financial information.
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Review organisations’ human capital activities to identify value creation and risk mitigation opportunities, such as the greater use of contingent or contract workers.
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Review supply chain operations to better understand potential OSH-related vulnerabilities and determine opportunities to strengthen relationships and mitigate risks.
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Identify key external stakeholders and determine if there is an opportunity to better understand their needs, interests, expectations and issues raised, or improve engagement.
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Identify and review gaps in publically-reported OSH KPIs and make the information more useful for key stakeholders.
CSHS Board Chair Kathy Seabrook said: “OSH professionals know their work not only saves lives but contributes to an organisation’s long-term viability and financial stability. By integrating OSH performance into effective sustainability reporting, business leaders and investors will have more interest in OSH as a foundational aspect of human capital in their world of Economic, Social, Governance (ESG) investing.
“OSH professionals now have line of sight to the board room in their organizations as never before. To capitalise on this, OSH professionals should play a leadership role in organizational activities such as horizon scanning, change management, enterprise risk management, supply chain management and developing and implementing new standards such as International Organization for Standardization (ISO) 45001.
“Not recognising the opportunities that sustainability brings will leave OSH professionals behind in reactive, compliance-focused roles.”
IOSH Executive Director of Policy Shelley Frost said: “Occupational Safety and Health is a material issue for all organisations. Ensuring you protect the health, safety, welfare and wellbeing of individuals in the workplace is a value which has proven to motivate workforces, enhance business reputation and reduce business risk.
“As it becomes more integral to an organisation’s sustainability agenda, OSH will increasingly be seen as a source of new ideas promoting innovation and growth.”
The Center for Safety and Health Sustainability (CSHS), established in 2010, is a not-for-profit organisation committed to advancing the safety and health sustainability of the global workplace. CSHS engages safety and health partners around the world to work toward establishing minimum standards that help reduce workplace injuries and ill health.
A collaborative effort by the American Industrial Hygiene Association, the American Society of Safety Engineers, the Canadian Society for Engineering and the Institution for Occupational Safety and Health (UK), CSHS represents over 100,000 occupational safety and health professionals worldwide. For a copy of the report please visit http://www.centershs.org/.