Traditional business models are fast disappearing in the face of competition from agile, digitally enabled market disruptors. In many cases, established traditional enterprises have collapsed due to their inability to adapt quickly and respond to unexpected risks in a changing market. New risks now threaten organisations at every turn, with the nature of both business risk and Environment, Health and Safety (EHS) risk changing. In many cases, these risk categories have become one and the same, posing serious financial and reputational risk.

EHS has long been a key focus for heavy industry across South Africa, but even the most safety-focused sectors, such as mining, still suffer costly losses. Last year’s R5 billion silicosis settlement is a prime example of this, delivering a serious business risk to mines already grappling with declining revenues. Globally, massive legal losses and fines have devastated companies that failed to manage EHS effectively.  But losses such as these – significant as they may be – are not the prime driver for a growing focus on EHS around the world.

EHS has to be a top priority for every organisation, not just to mitigate the risk of sanctions and losses, but to underpin safe and sustainable business and responsible corporate citizenship.

Today, organisations of all sizes across all sectors are taking sustainability and corporate citizenship far more seriously due to regulatory compliance concerns, a genuine commitment to employee wellness and a growing need to embed operational excellence and true sustainability across the business.

EHS & S boost business bottom line

EHS and overall sustainability are now inextricably linked, and directly connected to overall governance, risk and compliance, and the organisation’s bottom line.

Illustrating this, the Corporate Knights 2020 Global 100 annual ranking of corporate sustainability performance, released each January during the World Economic Forum in Davos, assesses a broad range of factors, including resource management, financial management, employee management, sanctions, ‘clean’ revenue and overall sustainability.  This year’s report found that considering sustainability issues and sound environment, social and governance (ESG) both improves performance and extends corporate longevity.

Not only are sound EHS and sustainability practices good for brand reputation and revenues; they also help to streamline operations and position organisations as employers of choice, allowing them to attract and retain top skills, improve employee morale and potentially reduce the costs of recruitment and new staff training.

But as fast as organisations move to embed sound EHS and sustainability practices, market changes and new risks emerge:

• Climate change is expected to cause changes in weather patterns that could impact on working conditions – making them hotter, drier or wetter than expected and planned for in long term EHS strategies, and potentially causing new and unanticipated health and safety, and supplier and waste management risks.
• The drive for organisations to absorb more inexperienced interns to alleviate the unemployment crisis will impact on EHS management and training needs.
• The changing expectations of the Generation Z workforce, and the rise of the ‘gig economy’ may place strain on efforts to manage workforces and allocate EHS roles and responsibilities.
• New 4IR technologies are rapidly making their way into the workplace, impacting EHS for better or worse as they drive change in organisational structure and operations.

Digital-first in a changing environment

Maintaining EHS best practice in a fast-changing environment demands a digital technology-enabled approach in which organisations are able to integrate and manage the organisation’s entire EHS risk profile, support management and training, and forecast future risk, for more resilient business.

These capabilities should not be limited to large enterprises: small and mid-sized organisations cannot afford to neglect EHS either. Cloud-based tools now enable these smaller stakeholders to access EHS management functionality too.

Recognising this, global businesses are fast adopting digitized EHS technologies and services, reports Verdantix. The independent research and consulting firm’s 2019 Global EHS Survey indicates that demand for EHS services will rise in the coming year, with 45% of global respondents planning to spend more money on EHS consulting in 2020 than they did in 2019. The biggest budget increases were to be allocated to EHS software implementation, upgrade and support projects, with spend also to be allocated to improving operational compliance, EHS audits, compliance, and EHS strategy and management systems. 56% of those polled said innovation was essential and 23% said innovation was a high priority for the success of their EHS function.

EHS software is currently the primary digital tool for future-proof EHS management, but solutions such as mobile applications, IoT sensors, vehicle telematics, location tracking wearables, drones and virtual reality and augmented reality tools are also gaining ground fast. These tools all offer the potential to significantly enhance EHS efforts, but they too must be integrated into a consolidated management platform for maximum effectiveness.