Revised standard breathes new life (and value!) into corporate health and safety disclosures

One of the biggest impacts any organisation can have is on the health and safety of its workforce. That’s why disclosures on the management of health and safety at work have almost always featured in sustainability reporting.

And as sustainability reporting over time has become a core element of corporate disclosure suites, so too the management of health and safety at work has evolved to a more holistic, wellbeing-focussed approach. Now the world’s most widely used sustainability reporting framework is shifting the dial on corporate disclosures on work health and safety.

Health and safety disclosures – current state of play

Regardless of sector, the management of health and safety impacts are almost always featured in sustainability reporting, reflecting their importance from community, legislative, productivity, and social license to operate perspectives. The Global Reporting Initiative’s (GRI) sustainability reporting framework is the most widely cited disclosure guidance for the 90% of ASX200 companies that provide some form of meaningful sustainability disclosures in the most recent reporting period.[1]

Despite this, disclosures have remained largely stagnant over recent years and focused predominately on lag safety indicators outlined in the GRI’s existing Occupational Health and Safety Standard (GRI-403 2016).

While Total Recordable Injury Frequency Rates continue to decline for many organisations (or plateau, with others), instances of workplace fatalities and permanently disabling injuries continue to occur, raising questions as to the value of existing disclosures –and the internal systems and processes that support them. At the same time, disclosures have largely failed to keep up with the shifting understanding of health and safety, which encapsulates a broader notion of keeping the whole worker safe and healthy whilst at work – being both physically and psychologically.

In this context it is timely that GRI has recently released a revised occupational health and safety standard (GRI-403 2018), following input from an expert multi-stakeholder working group. This is the first significant update to the GRI’s recommended disclosures in this area since the release of its G3 reporting guidance in 2006.

As we outline below, the revised standard is expected to shift the dial on corporate health and safety disclosures by facilitating more holistic and consistent insights into how health and safety issues are being managed. Although alignment with the revised standard is not required until January 2021, we anticipate a number of organisations, particularly in high risk industries with multinational footprints, will begin transitioning much sooner than this. We do however suggest caution. Whilst the standard updates are a great move forward, some of the updates do not necessarily and completely align with the requirements for managing the health and safety of workers and others in Australian workplaces.

What’s changed in the revised Standard?

The revised Standard includes the following key changes:

  • Change in the scope of ‘workers’ covered by Standard: The Standard covers employees and workers whose work and/or workplace is controlled by the organisation. In certain disclosures, this extends to circumstances where the organisation’s operations, products or services are directly linked to significant health and safety impacts on other workers through its business relationships

    Whilst this scope of workers has expanded from previous GRI iterations, legislative instruments such as the Australian Work Health and Safety Act 2011 (Cth) go beyond the Standard and provide onus on the person conducting a business or undertaking (PCBU) to ensure workers and others are not exposed to the risk of health and safety. Importantly, the term worker was expanded to included direct employees of the PCBU, but also importantly (for example) contractors, subcontractors, and volunteers.

    For example, specifically in Australia, where a PCBU has engaged a contractor to carry out work, and the contractor has engaged a sub-contractor, the PBCU has a duty of care through its supply chain to the extent that it has control and influence over the work and workplace. The law also places a duty on the PCBU to consult, co-operate, and co-ordinate its activities with other PCBUs – ‘a shared duty’. So whether or not the PCBU is carrying out the actual work or not, it should ensure that it works with its supply chain to do all that is reasonably practicable to prevent harm. Therefore, organisations will need to continue to be cognisant of inconsistencies between local legislation and the GRI’s disclosure requirements

  • Inclusion of positive assertions as part of the company’s management approach to health and safety: The Standard aligns to the broader principles of ISO 45001:2018 Occupational Health and Safety Management System and mandates disclosure of proactive controls in place including the status of health and safety management system design and implementation, hazard identification, assessment and management processes, incident investigation processes, scope of health and safety training provided to workers and active consultation mechanisms
  • Greater emphasis on occupational health: focus on the active promotion of occupational health, including access to occupational health services and how the organisation facilitates non occupational medical and health services. As part of the revision, health now stands on its own in the form of a separate management disclosure and topic-specific indicator. For organisations within high-risk sectors, disclosures on this topic have been evolving over recent years. For low risk organisations, this prompts a greater exploration, understanding and consideration of health
  • Refreshed methodology for reporting work-related injuries and health: As opposed to measuring the loss of productivity for work-related injuries, the emphasis is on the recovery time for the worker.
Next steps for organisations looking to align with the revised Standard

Health and Safety practitioners will be breathing a sigh of relief as these disclosures are aligned with to the broader principles of ISO 45001:2018. While alignment is not required until January 2021, early adoption is encouraged.

As organisations look to transition to the revised Standard, we recommend the following is considered:

  • Conduct a gap analysis of revised disclosures against current safety disclosures taking into account local legislative and regulatory requirements. This gap analysis should also look at aligning internal reporting frameworks, to enable consistent and effective reporting
  • Prepare for the transition by ensuring robust systems and processes are in place to capture the revised data points – especially when it comes to recording and measuring exposure hours for your extended supply chain
  • Develop and communicate health and safety targets in line with the GRI disclosures.
Supporting Footnotes

[1]According to ACSI, 36% of ASX200 companies used iterations of the GRI framework to inform their 2017 sustainability disclosures.

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