Safe Companies - A Practical Path for Operationalising Sustainability
Many of today's business leaders are aware of the sustainability debate and believe there's "something in it". Thus the challenges of 'operationalising sustainability' in a way that builds business value and benefits society are already a major preoccupation for executives in today's more progressive corporations, and will have to be confronted by many others. This discussion paper provides a strategic framework for integrating sustainability principles and issues into business. March 2002
executive summary
Many of today's business leaders are aware of the sustainability debate and believe there's
"something in it". Thus the challenges of "operationalizing" sustainability in a way that builds business value
and benefits society are already a major preoccupation for executives in today's more progressive corporations, and will have to be confronted by many
others.
The rise of global
warming/climate change as a key issue for international diplomacy and business
and the controversy surrounding whole new industry sectors like
biotechnology/genetic engineering mean that the level of business awareness
about sustainability will continue to grow. The safety fears of billions of
people - including consumers and investors - will ensure that business takes
notice.
So what is holding back
corporate action on sustainability? Our experience shows that the key blockages
are not so much lack of motivation, but rather confusion over "what to
do", "how to do it" and "where the value is".
Sustainability as it has been served up to the corporate world by many of its
most vocal advocates can be highly confusing for those who run companies. It
also can be too narrowly focused on environmental issues, critical as they are,
losing track of both the people agenda (social) and business reality (financial
and economic).
These failings are
restricting the uptake of sustainability as an organizing framework for
business in the 21st Century. This discussion paper presents Ecos Corporation's
Safe Companies, a strategic framework for integrating sustainability principles
and issues into business. To act decisively, and to shift sustainability from
passion to practice, business leaders need a path to take them past the
blockages.
To be practical such a path
must:
- Demonstrably create value for shareholders
- Be accessible and manageable, and
- Have outcomes that are measurable (and therefore reportable)
We have identified a path
that is shaped by the deeply ingrained human craving for safety and security,
by modern consumer expectations around product safety and corporate
responsibility, by investors' demand for reduced risk and by the market's need
for stability. In preview, the Ecos Safe Companies framework involves:
- Recognizing that corporate uncertainty - about what to do, how to do it and how value will
be created - is now a major blockage to business "buy-in" to
sustainability
- Overcoming the confusion that unfamiliar sustainability issues cause by getting companies
started via a more familiar route based on a company's "core value/s"
- Advocating workplace safety and health as the most logical and effective core value on
which to build a sustainability-based business model
- Empowering Occupational Health and Safety (OHS) and Safety Health and Environment (SHE)
professionals to increase their effectiveness within corporations
- Following a Safety-Sustainability Continuum Footnote 1 beginning with workplace safety as the
readily accessible first stepping stone on the long and poorly signposted path towards sustainability, and
- Focusing (always) on the identification and measurement of the shareholder value that is
created for a business through safety sustainability strategies
Our methodology for this paper was:
- The
major conclusions are based on our working experience with a number of major
corporate clients over several years, in particular DuPont and its safety
consulting arm, DuPont Safety Resources, and extensive consultation with a wide
range of other stakeholders
- An
initial draft of this discussion paper was circulated to more than 20 guest
reviewers around the world - from industry, academia, NGOs, the financial
sector and the safety and sustainability advisory fields - for their comments
and criticisms
- Feedback
provided by our reviewers has been assessed and where appropriate has been
incorporated into this latest and substantially revised version of the
discussion paper
- We
regard the safety-sustainability theme as a dynamic and developing concept and
invite further dialogue on the conclusions we have reached in this paper from business inertia to safe
companies
The main reason for big
business inertia on the need for greater corporate responsibility and the
pursuit of sustainability is no longer active resistance to the idea. Many
companies and business leaders now accept that individual corporate well being
and the stability of the market-based democratic system are influenced by
environmental and social factors as well as financial ones. In essence, they see
that there are good business reasons for being a good company. The real
impediments for these business leaders who have accepted that "we have to
do something" are simple but potent. They are straightforward business
questions:
- What do we do?
- How do we do it?
- How do we ensure value is created?Footnote 2
The unfamiliarity,
controversy and sheer "fuzziness" that surround sustainability as a
concept often repel or baffle business leaders when they attempt to integrate
its key principles and issues into their companies. The long-term nature of the
climate change issue, for example, is understandably an immense challenge to
executives who are focused on the market's demands for 90-day reports on
shareholder value added. The result is often ongoing inaction and considerable
frustration within companies as managers either ignore sustainability or at
best institute isolated ad hoc programs.
It is no longer enough for
sustainability advocates to be preaching to business on sustainability's
virtues without accepting some responsibility for the "what", the
"how" and the "value". They must help business with
practical, affordable and effective approaches to the core challenge of
operationalizing sustainability. The general proposition of this paper,
therefore, is that companies should identify a familiar core value/s for their
business that fits with their corporate culture, and that matches existing
management skills and processes, and then work towards sustainability from that
entry point. If such a core value/s does not exist then it will have to be
created before a company tackles the vast, unfamiliar territory of
sustainability.
Our more specific proposition
is that a core value around workplace safety and health is the most logical and
effective entry point for most companies. There is a Safety-Sustainability
Continuum that runs from accepting responsibility for providing a safe
workplace all the way to fulfilling responsibility for protecting the planet
and its people. Companies with a strong existing safety culture, or at the very
least with effective skills and processes to safeguard their workers, have a
head start on the long road towards sustainability. Those which don't will have
to develop the skills and processes - and ideally the culture as well - because
no corporate regime that presides over avoidable deaths, injuries and illnesses
in the workplace can ever claim to be sustainable, or even to understand what
the concept requires of their business.
In the future the
corporations that will be closest to being sustainable will be Safe Companies.
In this sense, pursuing safety is an ever-expanding mission - a common
dictionary definition of safety is the utopian "absence of risk" -
just as pursuing sustainability is likely to be a never-ending quest. From the
first stepping-stone of workplace safety tomorrow's Safe Companies will move on
up the Safety-Sustainability Continuum to being safe for their neighbors, safe
for their customers, safe for the environment and safe for their shareholders.
This trajectory will take them from being companies that are making themselves
safer by minimizing their negative impacts on society and the environment to
becoming safety-enhancing companies that seek to maximize their positive
impacts.
why workplace safety and why not some other core value or issue?
A number of our guest
reviewers for the first draft of this paper suggested that we should emphasise
the general proposition of using a familiar core value/s as the entry point for
operationalizing sustainability rather than our specific proposition of
workplace safety as the ideal core value. Other core values that were suggested
include shareholder value, customer service, environmental care and quality.
While agreeing that each of these other foci has potential if it represents a
strong core value for a particular corporation - for example customer service
in a retail sector company - our analysis nevertheless is that workplace safety
has a number of clear advantages. These include:
- As
an entry point for sustainability, workplace safety in the first instance is
people focused rather than environment or dollar focused increasing the
likelihood of "buy-in" from a wider range of important internal and
external stakeholders
- Workplace
safety does, however, have clear environmental and financial characteristics as
well as social ones with, for example, a chemical explosion and spill posing a
threat to workers, neighboring communities, the environment and shareholder
value
- The
business culture, policies, management skills, processes and systems that
deliver superior performance on workplace safety can be harnessed to address
other key business challenges in areas like risk management, eco-efficiency,
research and development, quality control, customer service and even
shareholder value creation. We don't see this as strongly with any other core
value
- Targeting
safety (and security) in the broader sense, including the initial specific area
of workplace safety, is directly linked to the established business priority
(and therefore cultural fit) of reducing risk in all areas of a company's
operations
- Making
workplace safety the first of many stepping stones towards sustainability
energizes OHS and SHE professionals, helps to integrate their role into the
wider business and avoids a classic loss-of-interest situation once early goals
are achieved
- There
are strong process similarities between OHS management systems and other
management systems such as quality (e.g. ISO 9000) and environment (e.g. ISO
14000), making workplace safety a valuable systems learning opportunity
- There
are strong case history examples of corporations that have safety as a core
value using it to strengthen other parts of their businesses or their business
as a whole (e.g. Alcoa on leadership) Footnote 3 and using it to guide their handling of
other key challenges (e.g. DuPont on environmental stewardship and security) Footnote 4
- There
are many common points between the narrow challenge of managing for good
workplace safety outcomes and the broader challenge of pursuing good
sustainability outcomes (see Workplace Safety v Sustainability - A Checklist!
in this paper)
- Workplace
safety is relevant to most industries and most companies in most parts of the
world, although we recognize that the specific issues vary greatly from sector
to sector
The pivotal issue is that
workplace safety is first and foremost a human values issue. Using shareholder
value, for example, is overwhelmingly a business value approach. Focusing on
value creation in planning and implementing any sustainability-based business
initiative is very important, and we argue this very strongly. But it is not
enough by itself and there needs also to be a human values filter. The best
equation is value plus values, not one or the other. Merely focusing on
profitability clearly lacks the human values dimension and cannot drive safety
or sustainability on its own. The case for using workplace safety is bolstered
by a view among enlightened managers that it represents "a microcosm of
management more generally, incorporating issues as diverse as engineering
design, maintenance, human psychology and industrial relations". Footnote 5 There
also is growing evidence of a strong "business case" for workplace
safety, with the work being done in this area being an important precursor to
demonstrating a positive business case for sustainability. This is critical to
breaking through common business perceptions that acting on challenges like
safety and sustainability is a cost, not a benefit. Footnote 6
Sustainability-seeking
companies need to crawl before they walk, and walk before they run, meaning
that getting workplace safety right can be a constructive jumping off point for
the sustainability journey. Protecting workers everywhere isn't easy. But
companies that can't do it well will fail or at least struggle to
operationalize sustainability with its diverse and often even greater
challenges.
INCREASING SAFETY MEANS REDUCING RISK (AND SAVING MONEY)
In the narrow sense of workplace safety, accidents avoided can mean dollars saved.
For example, a large chain store company that has direct and indirect accident
costs totaling $10 million a year and has a profit margin of 5 percent of
turnover would need to make $200 million in sales just to cover its safety
failings. Any business opting to sell more of its product rather than pursing
best practice on safety to save lives and avert human misery would clearly fail
the sustainability test and, arguably, the shareholder value one as well.
For the broader safety (or risk minimization) arena there are many examples where
safety enhancement/risk reduction has a strong connection to sustainability
principles and/or issues. For example:
- The consumer risk that Monsanto was hit by when it pushed genetically-modified crops into a European
marketplace gripped by food safety fears
- The sovereign risk that ExxonMobil suffered with its Indonesian oil/gas assets in 2001 due to political
instability, in turn related to socio-economic and cultural issues, making it
impossible to guarantee operational safety for several months
- The damage to brand and the bottom line for the Firestone tire company and the
- Ford Motor Company inflicted by the tire blowout and vehicle roll-over debacle that
hit in 2000
but isn't workplace safety struggling to gain business priority status too?
One of the attractions of
workplace safety as an entry point for sustainability is that both share many
similar characteristics, including blockages for business action, although
generally speaking these are less likely to obstruct action on safety by
comparison with sustainability. The business case for protecting workers is
still debated. There is philosophical, bordering on ideological, debate around
workplace safety, with some arguing that zero accidents is the only moral
target and others proclaiming this a nonsense and making a case for a pragmatic
degree of "acceptable or affordable" risk. Industry and organized
labor often differ about safety issues, especially about whether it is unsafe
workplaces or unsafe behavior that is to blame for killing and maiming workers.
A number of our reviewers
warned against assuming that the need to act on workplace safety is widely
accepted as a core issue within the corporate world, especially in small and
medium sized businesses, and also against assuming that just because companies
have an OHS or SHE capacity that they are committed to anything more than bare regulatory
compliance. One said: "There are many companies with OHS systems (and even
environmental management plans) in place today which do little more than meet
base regulatory requirements."
Another questioned if making
workplace safety the entry point was a "one-size fits all" model,
observing that some firms might see safety as a forbidding and difficult
challenge in its own right. "It is not a universally held value,"
this reviewer said. These question marks are appropriate but do not dissuade us
from recommending workplace safety as an ideal entry point for sustainability
for most companies, especially if it is used in tandem with a focus on value
creation. That said, there will be cases where individual companies have a
strong alternative core value (customer service is one that also has a number
of common points with sustainability) that could be used as the main entry
point or in combination with safety and/or value. As another reviewer noted,
there are "Darwinian forces in play" and in a predatory world
"some companies of today are simply not fit to survive". Those that
cannot safeguard their own employees may well fall into this category, and
increasingly those that fail to be Safe Companies in the broader sense also
will face survival challenges.
Undoubtedly there is a
self-selecting element to the Safety-Sustainability Continuum. Companies choose
to make safety a priority or they don't. They choose whether they will rely on
their own resources to achieve best practice or perhaps bring in outside experts
to help them excel. They also will choose whether they want to pursue
sustainability, and they can choose their own entry point. Our conclusion,
however, is that a company that lacks the business equivalent of a university
degree in managing safety (and ideally a genuine safety culture) will struggle
to do the combined MBA and PhD in sustainability.
There may be exceptions as
more companies sit for the sustainability tests. But we are unaware of any of
today's leading sustainability-seeking companies that don't have a strong focus
on workplace safety, and OHS and SHE are laboratories - though not always
powerful ones - for sustainability thinking in corporations. A reviewer said:
"I would stress that true 'forward-thinking' companies will have a vision
of where they are going organizationally and operationally and will see a
journey to becoming a sustainable enterprise as a series of steps with robust
OHS systems likely to be both an early and necessary target."
should sustainability principles and issues be the drivers for
sustainability?
In working with corporations over seven years Ecos has tried using a number of sustainability principles and
issues as the entry points and drivers for operationalizing sustainability.
These have not been as effective as they need to be to promote increased
business take-up, mainly because of their complexity and unfamiliarity. This
experience has prompted us to use more familiar business issues as the starting
point and then transplant sustainability on to them, rather than trying to
graft the business on to the sustainability rootstock. Sustainability-based
options we have tried previously include:
- Major issues like climate change and biotechnology - While they can be crucial
drivers for change, they are not universal across industries and they are
ideologically divided, presenting many impediments to their effective use
- Reporting - Useful as a guide and focus, but doesn't create new opportunities for
business value and is compliance driven (community compliance rather than
regulatory)
- Stakeholder engagement - A crucial tool and a source of new ideas and perspectives rather
than being a driver for sustainability in its own right. Engaging with
stakeholders including sometimes hostile NGOs also can be intimidating
territory for companies to venture into
starting the climb on the safety-sustainability continuum
Our model for the
Safety-Sustainability Continuum (see Figure 1 next page) places workplace
health and safety at the base, the ambitious goal of being a safe or
sustainable growth company is a midfield checkpoint and the ultimate goal of
sustainability is the elusive aspirational point at the top. Companies that are
ascending the Continuum, while also creating value for shareholders, will be on
a safe or at least safer growth trajectory. The reverse will be true for any
companies that are dropping down, with a falling trajectory meaning growing
risk, especially in regard to the social license to operate.
An expanding, financially
successful company that eliminates its negative social and environmental
footprint could be said to be a true sustainable growth business. If that
hypothetical company progresses further up the Continuum by developing a
positive footprint it could create value for shareholders through making the
world a better place, rather than merely delivering profitability along with
some societal benefits. Those in the current crop of sustainability-seeking
companies - even leaders like Shell, DuPont, BP, Baxter International and
others - are yet to reach the checkpoint, much less go higher.
understanding the purpose of the continuum
The reviewer response to the
Safety-Sustainability Continuum was generally very positive, but again we
received cautions. One asked: "Is the Safety-Sustainability Continuum
linear and path-dependent? yes"> While I
like Figure 1 very much, I still find myself asking whether the entry point of
safe processes necessarily leads to a 'positive footprint' company. There are
some significant leaps that have to be taken to get from the continuous
improvement of existing internal processes (safe processes) to discontinuous
innovation of core technologies, products and services (restorative products,
positive footprint)."
The Continuum is meant to be
indicative rather than trying to dictate one true path towards sustainability.
Different companies and sectors will have different priorities and not all of
the steps that we have portrayed will be relevant to all companies or sectors.
The order in which various steps become relevant to companies also will differ,
and doubtless there are opportunities and challenges that we have not
identified. Companies also will not move up the Continuum in an orderly and
ever-ascending manner. There will be diversions, missteps, slips and surprises.
Different business units within single companies will move at different paces
and on different paths.
We present the Continuum as a
useful tool for companies to grasp the concept that what they do at the bottom
in taking on workplace safety challenges can be much more than the pursuit of a
"zero endgame", being the effort to drive accidents and incidents
towards zero. This is no longer uncharted territory because companies like
DuPont and Alcoa have come amazingly close to zero across their whole global
operations, and have individual plants with extraordinary safety records.
Increasingly the same goes for eco-efficiency targets like zero waste and zero
emissions. The corporate discipline to pursue targets like these needs to be
applauded, and is highly relevant to addressing the big sustainability
challenges like climate change and poverty, but it remains that the primary
focus is on minimizing or eliminating a negative impact. There are two logical
paths for companies that are excelling in the "goal is zero" game:
- Stagnate - Face an increasing challenge to stay focused as other business challenges
arise and command the attention of the company hierarchy, along with the danger
that the law of diminishing returns begins to evaporate interest in the target.
Only the strongest of cultures and core values can resist these pressures and
even then the best that can be hoped for is to edge closer to zero
- Grow - Find a path to apply the skills and processes learned in minimizing harm to
new challenges, thereby maintaining the original focus while also re-energizing
the company around its cultural strengths and core values. This means shifting
on to a positive footing aimed at maximizing the good that a company can
deliver for society and the environment - a "beyond zero" strategy
For practical reasons this paper has focused on the lower part of the Continuum. Firstly, the greatest
blockage to business take-up of sustainability is getting started in the first
place. Secondly, players in the current crop of significant
sustainability-seeking companies are yet to make it to the checkpoint, at which
point they'll be switching to "beyond zero" mode. There is already a
growing body of data about what happens in the lower third of the Continuum.
What happens above that, especially in the top section, still has to be
explored. Nor is the diagram meant to be linear. The journey from the entry
point to the checkpoint may be much shorter than the next section. Arguably the
aspirational goal of sustainability will always remain elusive.
What seems certain based on
existing case histories is that companies can move through a series of
transitions building on their core value/s as they go. In the case of DuPont,
with which we are most familiar, workplace safety is the foundation core value.
Environmental care was built on to the safety base in the 1980s and '90s. By
the late '90s the focus shifted to "sustainable growth", which
incorporates safety and environmental care with the very major addition of
shareholder value into the equation. The DuPont progression shows how workplace
safety can be used as a managing process for different challenges.
the importance of a dual focus on safety and value
The weight of this discussion
paper is devoted to highlighting our arguments in regard to focusing on
workplace safety as an entry point, and safety more widely as a driver for
operationalizing sustainability. A subsequent paper will explore further the
use of a focus on value creation - in traditional areas like margin
improvement, risk management, growth enhancement and capital efficiency - to
initiate and to drive sustainability for corporations.
It is important, however, to
understand that in isolation neither a safety nor a value creation focus is
likely to be comprehensively effective as an entry point and/or driver for
sustainability. A failure to use both to enter and to drive
sustainability-based business strategies is likely to threaten the
sustainability of any such initiatives and, alternatively, also could threaten
the sustainability of the business itself. Any business strategy that is
significantly unsafe for workers or others, or that fails to enhance safety for
society, sooner or later is likely to be rejected by the community. Similarly,
the pursuit of a strategy that fails to reward shareholders is likely to be
rejected by investors.
The strong appeal of
workplace safety, safety more generally and value is that each is familiar for
a business audience. Not all companies make workplace safety a priority, but
there is broad acceptance that they should. Promoting safety more generally
equates to risk reduction. Creating value is what business is all about.
The Big Picture - The Market Needs Safety and Security to Provide Stability
The
stability of the market-based democratic system relies on consumers (people)
and investors feeling safe and secure. If the safety and security of people in
a market economy is compromised, as happened with the US terror attacks,
consumer and investor confidence plummets and the resulting instability can
quickly harm many corporate players. Just look at many of the major airlines'
post-September 11 woes. Other sustainability-related examples include:
- Product recalls - Companies and whole sectors can suffer if their products are
seen to be unsafe and consumers lose confidence in them e.g. Firestone tires
- Consumer scares - For example the progressive collapse of the beef industry in
Britain due to "mad cow disease" and the recent problems in Japan
after discovery of the disease there
- New crises or issues - The impact of the growing cost of weather-related
diasters on the re-insurance industry and on public sentiment regarding climate
change
We
do urge a strong caution. Focusing on safety in the pursuit of sustainability
can't remove all risk nor anticipate all threats. But it can provide
corporations with better over-the-horizon radar, the management capacity to
deal with a wider variety of risks if or when they emerge and a "trust
bank" with a company's own stakeholders and the community more generally
in the event of some disaster occurring. The more Safe Companies there are, the
more stable the overall system is likely to be.
'people-focused' sustainability and the SHE model
Many non-business advocates
for sustainability come from the environmental stream, leaving the social and
often the financial and economic parts of the equation under-represented. The
landmark Rio Earth Summit in 1992 - essentially a mega-green forum - used the
term ecologically sustainable development (ESD). Since then, however, there has
been increasing recognition that sustainability needs to cover the "three
legs of the stool" - environmental, social and financial and economic.
Ecos, for example, defines sustainability as managing our society in a way
that:
- Preserves and restores ecological integrity (to ensure our life support system stays in
place)
Enhances the quality of life of all people (to underpin social, geo-political and market
stability)
- Creates value from the process of achieving the above goals (to motivate business and
to drive investment)
The social dimension is the
least well-understood and articulated stream, and yet this is perhaps the critical
dimension affecting how people live their lives. Since before sustainability
entered the business lexicon companies have been grouping environment together
with health and safety. This social/environmental grouping is variously called
safety, health and environment (SHE), health, safety and environment (HSE) and
environment, health and safety (EHS). Environmental campaigners sometimes
regard this model, by whatever acronym, as corporate obfuscation and as an
attempt to dilute the importance of the environment. But from a
safety-sustainability viewpoint this positioning is vital.
Linking the well being of
people, in this case of workers, to the environmental challenge can be seen as
a positive affirmation that the two are deeply inter-related. It is also a
practical reality. As noted earlier, major accidents that threaten workers,
such as a chemical spill or a tanker catching fire, also can pose a serious
threat to communities and the environment. So can a whole range of more minor
incidents and exposures. Far from being derided as an environmental cop-out,
the SHE model should be encouraged as a step towards business-compatible,
people-focused sustainability. That doesn't mean downgrading environmental
concerns, but it does mean recognizing that people are critical to the whole
equation and that meaningful solutions are unlikely to work without making
sustainability very relevant to them.
overcoming the limitations of the SHE model
Unfortunately, the SHE model
in all but the most committed of corporations can be a very weak engine room
for driving sustainability. This is because while it attempts to integrate the
environmental stream with at least one key social criterion, that of workplace
safety, the SHE area is often poorly integrated into the real business of the
corporation. Many SHE professionals are stuck in an eco-efficiency/risk
minimization "silo" which reflects the early demands that they run a
company's workplace safety and pollution reduction programs and, perhaps, its
reporting. SHE also is viewed as a compliance task and as a cost center, being
given a low priority while areas that are seen to create value are ranked more
highly.
While SHE professionals are
corporate insiders who can help to create Safe Companies, to do so they have to
reinvent themselves as drivers of value creation as well as workplace safety
and eco-efficiency. They also have to move to a new dimension of guiding the
company towards creating a positive footprint rather than primarily reducing
its negative footprint. Currently most SHE professionals are not well equipped
to make the value arguments within their organizations. They aren't steeped in it and they
aren't credible within it, although this can change if they make themselves
more relevant to their company's need to grow as well as to avoid risk. Such a
transformation will be given great impetus if the company's board and/or CEO
are demanding it, and incorporate SHE issues into their own decision-making.
Adding in the focus on value
creation can be a powerful driver for making SHE professionals - in the role of
sustainability champions - more relevant to the overall business and therefore
more able to influence its direction. Like sustainability, health and safety
will wield far more influence on the business if seen as a profit center rather
than a cost center. SHE professionals also will be empowered if one of their
core responsibilities, ensuring the health and safety of workers, is given
enhanced standing as an entry point for the "new big thing" - operationalizing
sustainability. In short, SHE needs to be taken out of its silo and integrated
across and throughout the business as a sustainable or safe growth-oriented
framework for all aspects of business behavior and development - a framework
that in the first instance ensures the safe delivery of environmentally and
socially safe products and services.
The longer-term expectation
of civil society stakeholders will be that subsequent generations of SHE
programs will not be confined to "pockets" within the company but
will define the company as a whole and will influence every decision. The
potential value for both the company and society will underpin cooperation that
will lead to the challenges faced in a long transition period being overcome.
This is a process of evolution. The long-term reward for the company is that it
will be seen as an entity that contributes to the safety and security of the
individual and society - and therefore to the stability on which business
relies so heavily. The reward for the civil society stakeholders is that they
will have enlisted new and powerful partners in the quest for a sustainable,
and by definition, safe and secure society.
in conclusion:
safe companies = business-compatible sustainability
Using workplace safety as a
familiar entry point, requiring evidence that value is being created, plotting
a course on the Safety-Sustainability Continuum and becoming one of the Safe
Companies is a business-compatible approach to operationalizing sustainability.
In practical terms, the company-wide
challenge of delivering workplace safety is a strong entry point for the more
far-reaching task of making sustainability "real" for the business.
Workplace safety is not a perfect microcosm of the sustainability challenge,
but there are enough similarities (as Table 1 shows) to make it extremely
useful. For corporations, this focus on protecting workers helps to bring
business meaning to the sometimes vague and often disputed concept of
sustainability. This arises at levels like:
- Understanding the dimensions of the management and other commitment required
- Recognizing the need to align management with other stakeholders including workers and
suppliers
- Developing the capacity to deal with subjective issues
- Confronting the business case issues raised by sustainability-type issues
- Fostering a solutions-focused organizational culture, and
- Abandoning self-serving business concepts like "affordable or acceptable risk"
and embracing bold targets to drive change.
We see three main scenarios for companies wanting to pursue sustainability based on the conclusions of this
paper. They are:
- Start at the beginning - Companies that want to make a start on sustainability should
develop their workplace safety expertise and culture as a way of fostering the
required corporate mindset, skills and processes. This includes companies with
no significant focus on workplace safety and those with a compliance-based
approach to OHS/SHE. By using the Safety-Sustainability Continuum as a guide it
will be possible to start on the sustainability challenge simultaneously with
the workplace safety one
- Exploit a head start - Companies that have a genuine safety/SHE culture and/or the
skills and processes to achieve strongly beyond-compliance outcomes on
workplace safety and other SHE challenges can re-deploy and re-energize their
efforts by using the Safety-Sustainability Continuum. This will require
board/CEO level support for changing the focus of SHE to a sustainable growth
approach
- Apply the principles - Companies with a very strong core value/s other than workplace
safety may choose to use it as an entry point for operationalizing
sustainability. The general principles of the Continuum may still be useful in
moving forward but nothing we have encountered has the utility of workplace
safety as an entry point and safety more broadly as a driver
(NOTE: In all cases we
advocate that a focus on value creation also be used. Value is the primary
motivator for many people, especially in business, and a partial motivator for
just about everyone. But safety motivates the heart and the deep human instinct
for survival. Used together they represent a powerful "combo" for
framing a business response to the sustainability challenge.)
About the Authors
Paul Gilding assists in formulating sustainable business
strategies for some of the world's leading corporations. As a former Executive
Director of Greenpeace International, his 20-year involvement with social
change organizations has given him a comprehensive insight into the processes
of transformation, enabling him to assist business in forecasting and taking advantage
of emerging trends. He has a thorough understanding of the challenges
sustainability poses for companies, as well as the commercial opportunities it
presents. Since establishing Ecos Corporation in 1995, Paul has advised leading
international corporations including DuPont, SC Johnson, the Ford Motor
Company, Placer Dome, BP (formally BP Amoco) and Suncor Energy as well as
Australian corporations including BHP, Lend Lease, Pacific Power and Western
Mining Corporation. In 1997, Paul received the prestigious Tomorrow Magazine
Environmental Leadership Award. In December 1994, he was listed by Time
International in its "Time's Global 100 Young Leaders for the New
Millennium" and in 1993 the Australian Prime Minister presented Paul with
an Australia Day Award for Outstanding Achievement for services to the
environment. In 1992, the influential World Economic Forum (WEF) appointed him a Global Leader for
Tomorrow at its annual meeting in Davos, Switzerland.
Rick Humphries has extensive international experience in
campaigning and activism, working to protect the environment on major projects
in marine conservation, pastoral lands, forestry protection and in mitigating
the impacts of mining. Before joining Ecos Corporation, Rick worked as
Strategic Director for the Wilderness Society in Australia and previously
established Greenpeace's Genetic Engineering campaign in Sweden. Rick has also
worked for Greenpeace International, managing a major Ocean Ecology campaign,
and in Australia as the organization's principal lobbyist in Canberra. He was
also with the Australian Conservation Foundation for six years. At Ecos
Corporation, he project manages one of our largest projects, with DuPont Safety
Resources, and acts as one of our key stakeholder engagement experts.
Murray Hogarth joined Ecos Corporation in 1999 after working as
Environment Editor at Australia's leading quality newspaper, the Sydney Morning
Herald. His award-winning, 21-year career in print and television journalism
gives him extensive expertise in communications, research and analysis. Murray
plays a leading role in Ecos Corporation's internal and external writing and
publishing affairs, including producing articles on sustainable growth issues
for international journals. He writes a monthly column for Sustainable Business
Insider (www.sustainablebusiness.com). Much of his research and analysis -
together with that of others in the Ecos team - centers on the sustainability
value case for business and, more recently, the safety-sustainability theme.
Murray also works directly with clients on value case and safety issues and
across a range of other areas including biotechnology, transport, mining, water
and sustainable agriculture.
Footnotes
-
Footnote 1: The Safety-Sustainability Continuum is an Ecos Corporation tool presented on page 10 of this paper
- Footnote 2: The important role that focusing on value creation can play in driving a company's sustainability
strategizing and operationalizing will be dealt with in a separate Ecos
Corporation discussion paper. There is, however, a brief discussion of a
safety+value approach later in this paper.
- Footnote 3: See speech by US Secretary
of the Treasury Paul O'Neill, formerly chairman and CEO of Alcoa from
1987-2000, at the National Safety Summit, Georgetown University, Washington DC
on March 30, 2001. O'Neill, an ardent safety champion, said: "For me, this
is not about safety, per se; it's about leadership. And it's about a conviction
I have that a truly great organization requires that people be aligned around
important values and they understand what they are. And no matter where you are
in the world, they're the same."
- Footnote 4: From comments by DuPont's global vice president for safety, health and environment since 1993, Dr Paul V. Tebo,
who cites safety as being DuPont's culturally comfortable "managing
process" for sustainable growth while also highlighting its "strong
connect to human values".
- Footnote 5: OHS consultant Malcolm
Brown, formerly manager of health, safety and environment at Shell Australia,
writing in the Australian Financial Review December 12, 2001
- Footnote 6: Ecos business case expert
Don Reed, formerly of the World Resources Institute, is leading our work in
this area. Eminent sources on this issue include Professor Michael E. Porter of
Harvard University. In a presentation in 2000 Porter said: "Just as
competitive firms benefit from productive use of resources and energy, they
also need well trained workers with a sense of opportunity, and workers who are
healthy with safe working conditions." In our experience companies often
cite improved ability to recruit and retain the best employees as one of the
early benefits of a sustainability or corporate responsibility strategy.