major organizations have adopted the “one report” concept and are providing sustainability information in their annual reports along with continually updated information on their website on sustainability performance rather than publishing a separate sustainability report. This approach is well received by those evaluating sustainability performance. Aside from the more current information, there are not the usual page or information limitations found in printed reports. This also is a good forum for internal and external sharing of information on the safety and health‐related performance.
7 WORLD BUSINESS COUNCIL ON SUSTAINABLE DEVELOPMENT
WBCSD is a global, CEO‐led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world that was formed in 1995 through the merger of a couple of similar organizations. Their member companies come from all business sectors and all major economies, representing a combined revenue of more than US$8.5 trillion and with 19 million employees.
The WBCSD also has national councils in each country they serve.
7.1 Rating Agencies
The growth in the sustainability and CSR movements spurred a growth in responsible investing. There are two concepts in play. First, the socially responsible investor wants to only invest in companies that practice CSR. Second, the proposition that sustainable companies and those that have good CSR are better run, more profitable, and will be sustainable. As a consequence, there were several investment firms that added sustainability or CSR to their financial performance assessments. One of the most well‐known rating schemes for sustainability is the Dow Jones sustainability index (DJSI). This index was first started in 1999 and is done for the Dow Jones by RobecoSAM (formerly SAM). It rates over 2500 of the largest companies in the world.
There are a very large number of firms (more than 100) that provide some form of rating for companies in the sustainability and CSR performance sphere in addition to the DJSI. These include VigeoEIRIS, Trucost, MSCI, Oekem, Ethibel, FTSE4Good (EIRIS), Corporate Knights, Institutional Shareholder Services (ISS), and others. This now includes various business and public publications such as Newsweek and Forbes. In addition, while not a rating agency, Bloomberg provides detailed sustainability information on a very large number of companies for those that subscribe to their service.
Why is this important to sustainability or CSR business practices? The majority of these sustainability or CSR rating is based on either public research or most commonly questionnaires and interviews with the companies. What they view as important translates into what the companies view as important. For example, your company might not believe that global warming or water scarcity is a problem for your business. However, the company will definitely be asked to provide detailed information on a risk assessment and plans to reduce the risk. A simple response that the company is not affected will not suffice. The point here is that the areas of emphasis by the rating agencies become areas of emphasis for the ESH professionals. Wellness or Total Worker Health might be very important to the rating agency so it will become important to you if you want a good rating from them as a safety and health example.
8 MANDATED REPORTING ON CSR OR SUSTAINABILITY
There are a growing number of countries that have legislation or stock market requirements affecting nonfinancial reporting that is publically available. In 2002, the French passed the nouvelles régulations économiques, or NRE which required some social and environmental performance reporting for certain organizations (15). In 2007, the Swedish government announced its commitment to becoming the first country in the world to require state‐owned companies to present sustainability reports based on the GRI guidelines. Similar developments have occurred in China, India, South Africa, and Brazil. Most recently the European Parliament passed a nonfinancial reporting directive in 2014 (DIRECTIVE 2014/95/EU). This measure requires the 28 Member States with organizations and businesses that have more than 500 employees and a balance sheet of 20 million Euros or more (includes credit institutions, insurance companies, and public interest companies) to produce a nonfinancial report. The nonfinancial report must include information on environmental performance, social and employee matters, respect for human rights and anti‐corruption, and must be published within six months of their annual reports and have an auditor's statement. The EU Directive also requires certain diversity information to be provided by each organization as well. This requirement is being implemented by each Member State into their own legislation framework and was effective in 2017 with the first mandated reports due in 2018 (16).
In the United States, there are the requirements of the SASB and currently, a large number of initiatives proposed to the SEC, banking institutions, and other stakeholders to require more information related to sustainability (and safety and health). Even without specific regulations, the pressure of ESG investors is driving more reporting by companies in the sustainability realm.
9 CURRENT TRENDS IN SUSTAINABILITY AFFECTING SAFETY AND HEALTH
The public, ESG financial analysts, and activists groups have concentrated on environmental pollution and sweatshop labor issues that are most prominent in developing countries including China. This has been reinforced in the safety and health areas by some terrible human catastrophes such as the more than 1100 fatalities and 2500 injured from the Rana Plaza building collapse at a garment factory in Bangladesh on 24 April 2013 (17). Today, there is still a push for major corporations to practice CSR and sustainability in their organizations and throughout their supply chains but it has increasingly being driven by the investor and financial community. History has shown that companies with highly rated programs in sustainability outperform others financially and thus are good investments. This might be expected as companies with good sustainability performance could be assumed to be managed well in all areas. An investment survey from Morgan Stanley showed this logic:
…investors appear to place a premium on sustainability: Nearly three quarters (72%) of those surveyed believe that companies with good environmental, social and governance (ESG) practices can achieve higher profitability and are better long‐term investments (18).
As another very recent example, the BlackRock investment firm's annual letter (2017) to the CEOs of the world's largest public companies stated, “Society is demanding that companies, both public and private serve a social purpose…to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society” (19). The Wall Street Journal reported that there are over 460 US equity funds with an ESG focus (20). The significance is that the current trend in nonfinancial reporting is to view safety and health as a major contributor to what is termed, “human capital.” Additionally, many large institutional investors such as the AFL‐CIO pension fund, the California pension funds for teachers and state employees (CalSTRS and CalPERS represent over $500 billion) and a number of others have established benchmarks for investing that included ESG performance. Investors today are looking at more than simply the “bottom line” for their investments. This is a strong driving force for sustainability and EHS departments to demonstrate good performance.
9.1 Human Capital
Human capital is a concept that has been in use for quite some time and dates back to the early seventeenth century (21). It is the concept behind the practice of safety and health since it promotes an intrinsic value for workers. It has not been a cornerstone of stakeholder concerns in sustainability in the past. This is changing, especially as many of the environmental and societal issues have been better defined. IOSH held a working group meeting on safety and health materiality in sustainability in 2003 and suggested
…most directors would acknowledge “people are the company's most valuable asset” and that consequently, protection of employees is material to all employers. It is by ensuring the health and safety of their workers that businesses help maintain their reliability and their skill and experience base – crucial in today's competitive environment