ESG or CSR… How much of the S is about safety?

We look into the extent that companies consider safety as part of their environmental, social and governance policies.

Author: Amy Law

9 minute read

Published: 19.08.21

At a glance

  • Environmental, Social and Governance metrics are a key focus for investors across the globe. While investors look for consistency industries are focusing on what being “more responsible” means for them.
  • Accident and injury rates are reported by country and show great disparity across continents. The UK consistently performs well (0.5 fatalities per 100,000 opposed to 3.5 in the USA).
  • Safety data could provide vital metrics and support employee engagement to help deliver tangible results for businesses who are early adopters of connected technology.
  • GKD can support businesses who recognise a link between safety and social responsibility. SensorZone, a proximity warning system, is a proven technology that provides information so that businesses can demonstrate behavioural change and monitor and manage risk consistently.

Corporate social responsibility (CSR) policies or environmental, social and governance (ESG) standards, however denoted, have the common goal of focusing businesses on the risks and opportunities that their activities create. Providing an opportunity for transparency and a collaborative approach to relationships, it is an opportunity for businesses to have a think about how to be more responsible in their day-to-day activities. While this blog focuses on the construction sector, we are hopeful that common ESG metrics will also support collaboration across sectors and continents.

The Governance and Accountability Institute report that more than 80% of the Standard & Poor’s 500 are publicly reporting their performance on ESG standards. NASDAQ have implemented their own ESG reporting standard, Euronext have established a set of ESG guidelines as part of the “Let’s Grow Together 2022” initiative and the London Stock Exchange has distributed its ESG guidance to over 2,700 companies which have securities listed. They represent a combined market capitalisation of over £5 trillion.

Clearly there is a big shift going on. To attract investment, the best people, and to partner or supply large multinationals or governmental organisations, we all need to look at what ESG means for our businesses and how to measure and report our success in delivering improvement.

As a business that supports the construction industry globally, we have seen first-hand in the UK a myriad of programs and commitments being made by Tier One contractors; the race to Carbon Zero by 2050, a dedicated focus on work Health & Safety best practice and positive steps towards a diverse and engaged workforce. Does it seem to anyone that the UK is ahead in these areas and its attitude and approach to safety? Regardless, what is becoming apparent is that we are experiencing a step change in attitudes across companies and continents. One could very well speculate that this could be the direct effect of more construction companies being evaluated by sustainability rating agencies (SRAs) looking to provide key stakeholders with data around environmental, social and governance indicators. Whatever the driver for change might be, early adoption is likely to be positive for the contractor and all its stakeholders.

It might be that because we spend lots of our time focused on safety, or because we are currently setting out GKD’s values and aligning our own ESG plan, it has nevertheless become very clear to us that “social” in ESG or CSR is intrinsically linked to people and keeping them safe.

The International Labor Organisation published some interesting statistics on accident rates in the workplace. They estimate that every year 2.3million people die because of work-related accidents or disease. They also estimate there are around 340million occupational accidents. Data shows us that the UK consistently has one of the lowest rates of fatal injury across the EU. In 2017 the standardised UK rate was 0.52 per 100,000 employees (compared to Romania which sits just above 3). The Occupational Safety and Health Administration (a US agency) reports a similarly high number of fatalities at 3.5 per 100,000 workers. We also know that data from 2018 showed that one fifth of all fatal accidents at work in the EU-27 took place within the construction sector. Perhaps this focus on safety is linked to an awareness of risk and the need for improvement. Perhaps the data does suggest that the UK is a step ahead on safety?

Commentary on the construction industry, where we are perhaps best known, suggests that the “S” deliberately lags behind the “E”. It’s not really any wonder when you consider that according to a report published by the United Nations Environment Programme, emissions from the construction industry reached the highest ever level in 2019, accounting for 38% of global CO2 emissions. But could it also be because of the “softer” nature of the “S”? Difficult to define, nearly impossible to measure?

For GKD, keeping people safe feels like one of our founding and fundamental values, important for our team and our customers. Focusing on health and safety means fewer accidents and a near misses, fewer near misses means less stress and anxiety for everyone. An employer who is proactive in the management of safety is surely more attractive, more engaging, and likely to have a stronger, more holistic culture. PwC have a great graphic that describes (in their view) the different elements that sit under each of the ESG Pillars. We noted that safety appears in several boxes!

So, it seems obvious that safety should be high on everyone’s ESG agenda, but how can we help to measure that? What is it that we can provide that gives something tangible?

The answer lies in the data that our new connected world can provide. Where are there a high number of incidents? What is the common theme – time of day, piece of equipment? Who needs some support or training? By following the data, businesses can start to see areas that can be improved and provides opportunity to demonstrate and report that improvement.

This is where we come in.

The largest deployment of our SensorZone product (a proximity warning system) demonstrated a 97.5% reduction in near misses over a 6-week period. While this is a fantastic statistic there is more work to be done to understand how effective our SensorZone system is at driving behavioural change (the goal!) and therefore at continually managing and reducing the risk of people and vehicle collision. We suspect that every worker having a hard hat proximity sensor or tag is key to our solutions success: our gut feeling is that this “physical asset” provides a level of engagement from workers. Anecdotally we have feedback that suggests it is seen as another essential item of personal protective equipment (PPE). If you want to support us in researching this, we are looking to engage with trial partners to benchmark behaviour and attitudes before and after system implementation. Please get in touch using the form below.

In 2008 the Health & Safety Laboratory (an agency of the Health & Safety Executive, HSE in the UK) ran a study, focused on the application of behaviour change and worker engagement (BCWE), focusing on its use with Tier One Contractors including Bovis Lend Lease, Kier, Mace and Laing O’Rourke. Notably one of the outputs of the project was “a valuable new emphasis on ‘people centred’ health and safety management in construction”, Gordon Crick, HM Inspector of Health and Safety reported. The concluding report suggested that “integrating ‘top-down’ with ‘bottom up’ incentives should facilitate more rapid spread of effective BCWE practices across the construction sector.” Making everyone responsible for safety, we would suggest, is another nod to the importance of placing safety firmly in the “S” of your ESG plan whether you are in construction or not.

The next GKD Blog will look at Behavioural Safety Change and the various approaches being trialled. If you have any thoughts, please don’t hesitate to drop us a message.

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