Safety first: How to protect the triple bottom line
With recent mining accidents and oil spills still top of mind, corporate executives are well aware of the devastating impact that workplace accidents can have on people, profits and the planet. According to statistics from the UN’s International Labor Organization (ILO), the economic burden of poor occupational safety and health practices is estimated at 4 percent of global Gross Domestic Product each year. The Center for Chemical Process Safety estimates that the lost time for one employee associated with a safety event can result in $100,000 to 1 million dollars of direct cost.
Developing a preventative safety culture has become an imperative for sustainable business strategies. With a proactive risk management system in place (and employees committed to uphold health and safety standards) companies can ensure that catastrophic, costly incidents don’t occur in the first place. Critical to their bottom line, companies can safeguard business continuity so they don’t lose valuable time and revenue dealing with the aftermath of these accidents.
Only with better company-wide insight into operations, can workplace activity be conducted in an intentional, safe and sustainable manner. Operational risk management (ORM) is a holistic approach to ensuring business uptime while protecting the triple bottom line (people, profits and the planet.) Particularly important for process or asset-intensive industries like oil and gas, mining, metal and mill products, chemicals, manufacturing and construction, ORM is a powerful methodology that can offer cost savings, while protecting the safety of workers and the environment.
The foundation of ORM must be a holistic approach that encompasses the entire organization – including all the disparate regions, departments and manufacturing sites. Achieving increased visibility and control over operations is challenging because companies in these industries sometimes act like loose confederations of operating locations rather than unified organizations. But companies can enact a three step process to align people and processes towards achieving proactive risk reduction.
First, companies must proactively identify risks. This means conducting thorough risk assessments to understand what operational risks the company faces, and how effective its controls are. With that knowledge, mitigation plans can be developed to provide additional employee safety training, upgrade systems, provide better documentation, etc. -- and ensure changes are executed consistently across plants.
EHS management and analytic applications can provide the visibility required in this initial stage of the ORM process. Using this software, companies can quickly and consistently produce detailed reports, dashboards and scorecards that evaluate corporate operations, measure the implementation and effect of mitigation steps, and report compliance with EHS and financial regulatory bodies. Second, companies should record and learn from all incidents. For each fatal or catastrophic accident, there are typically 600 near-miss incidents that occur in the background. An ORM system can help companies understand the root cause for these incidents and take the appropriate steps to prevent incidents.