Connecting the Dots: ISO 45001, the Supply Chain and Risk Thinkstock

Connecting the Dots: ISO 45001, the Supply Chain and Risk

On March 26, voting began on ISO 45001, which sets requirements for occupational health and safety management systems. Kathy Seabrook, former president of the American Society of Safety Engineers, shared her thoughts on ISO 45001 at a recent event.

ISO 45001, inspired by the well-known OHSAS 18001, is designed to help companies and organizations around the world ensure the health and safety of the people who work for them. ISO 45001 currently is at the committee draft stage of development, the first consultation phase. During this stage, the countries (ISO members) that have chosen to participate in the standard's development have two months to form a national position on the draft and comment on it.

Many experts in occupational health and safety have lobbied for an ISO standard that would help integrate occupational safety and health into sustainability, quality and management systems efforts.

Kathy A. Seabrook, CSP, CFIOSH, EurOSHM, recently spoke about supply chain accountability, the market economy, sustainability/corporate social responsibility (CSR), materiality reporting and the ISO 45001 management system standard for workplace safety and health at the Standards and the Global Supply Chain event hosted by ANSI.

“Risk is the common thread connecting supply chain accountability, the market economy, sustainability, materiality reporting and ISO 45001,” said Seabrook, adding, “ll of these risks can have an impact public policy. This interconnectedness of risk impacts society, the economy and trade, an industry, an organization, its reputation and brand, its shareholders, business processes, product and service delivery capability, its workers and its supply chain. 

The premise of a management system standard is to set out requirements to establish, implement, maintain and continually improve a system to manage risk. Current management systems standards are environmental (ISO 14001), quality (ISO 9001), food safety (ISO 22000) and consumer product safety.  ISO has over 70 management systems standards, covering everything from energy to asset management. The ISO 45001 standard is focused on the management of an organization’s occupational safety and health (OH&S) risk.  

Seabrook reminded her audience of the garment fires and Rana Plaza building collapse in Bangladesh two years ago. The fires took the lives of dozens of workers who were trapped in the buildings when fires broke out. The Rana Plaza collapse killed 1,129 workers, who were crushed in the wreckage of the building when it fell. 

Seabrook noted that investigations of the garment fires found the basic provision of adequate emergency exits did not exist, and that due to concerns of theft by the workers, the exits that did exist were locked.  There was no way out for the workers caught in the fires. In the case of Rana Plaza, she said, the building and company owners knew there was issue with the integrity of the building “but chose not to provide a safe place of work for those in their employ.”

Several efforts were launched following those tragedies, including The Alliance for Bangladesh Worker Safety and the Accord on Fire and Building Safety in Bangladesh, to promote occupational health and safety efforts for workers in Bangladesh.   

“The fire life safety inspections organized by these groups are an important feedback mechanism for continual improvement and they are part of the ISO 45001 systems approach to managing the OH&S RISKs of injury, ill health and/or death to workers,” said Seabrook.

The basic premise of the ISO standard is to proactively identify OH&S risks, said Seabrook “before an incident occurs and assuring controls are in place can help to minimize or eliminate these causation factors in the future.” 

Connecting OH&S and Sustainability

According to Seabrook, there are two drivers impacting change by some organizations to be more accountable for their supply chain: the market economy and sustainability reporting, and they are closely tied, she noted. “The investment community and organizational stakeholders are driving market demand for more transparency from the organizations they invest in,” said Seabrook. “To give you a business perspective, the UN Global Compact and Accenture conducted a CEO Study on sustainability about a year an a half ago. They surveyed 1,000 CEOs from around the world and 93 percent of these CEOs stated [that] sustainability is important to the future success of their business.” 

Sustainability reports published annually or biannually by publicly traded companies increasingly re disclosing supply chain and worker safety and health risks that are material to their organization, said Seabrook.  Globally, the investment community and other organizational stakeholders have embraced the voluntary Global Reporting Initiative’s (GRI) Framework for reporting disclosures in sustainability reports.  Over 95 percent of the companies on the Dow Jones Sustainability Index now meet the reporting requirements of the GRI Framework. 

Some of these companies are moving to towards integrated reporting, which combines their sustainability and financial performance into one report.   It is important to note Occupational safety and health performance is one of the reporting or disclosure requirements in the GRI Framework. The Center for Safety and Health Sustainability has been working to influence the OH&S GRI Framework requirements so they are more proactive and aligned with recognized management systems thinking.    

Supply Chain Accountability

The most recent version of the GRI Framework focuses on supply chain accountability and materiality disclosures. Seabrook said that what this means is depending upon the industry sector, the supply chain and nature of risk and operations, OH&S risks may be identified as material to an organization’s financial condition and operational performance, and therefore must be disclosed or reported to shareholders as a requirement by the U.S. Security and Exchange Commission. 

“This is where the markets, sustainability, public policy and ISO 45001 converge,” Seabrook said.

In ISO 45001, she explained, an organization considers its external issues and the needs and expectations of interested parties to determine its OH&S risks. “An example of this is sustainability performance,” said Seabrook. “In this case, the interested party is the investment community and the external issue is transparency on OH&S performance in the sustainability report. Since OH&S performance and materiality reporting are becoming expectations of the investment community, this external issue impacts the organization’s ISO 45001 OH&S management system.”

To take it a step further, she said, “if the OH&S risk is determined to be material to the organization’s financial condition and operational performance, it should be reported. Saving workers’ lives and providing safe working conditions also pays off in the health and sustainability of the global supply chains themselves.”

OH&S and Materiality Maps

Treating OH&S risk as material to the viability of a company or industry also prioritizes worker safety and health initiatives, said Seabrook. 

For example, Owens Corning is a U.S. manufacturer of building materials and has identified 22 medium-high materiality topics in their sustainability report, and OH&S risk (employee safety and Health) is one of them. Seabrook calls this “a trend to watch.”

The NGO Sustainability Accounting Standards Board (known as SASB) is chaired by Michael Bloomberg with Mary Shapiro (former chair of the SEC) as vice chair.  “These are two powerful influencers in the investment community and policy development arena,” said Seabrook. They are overseeing the development of SASB materiality maps, similar to what Owens Corning is doing, which identify materiality issues on an industry-by-industry basis.

Materiality maps have been created for the financial services, technology and communications, transportation, mining and the oil and gas industries to name a few. SASB‘s goal is to get companies to focus their sustainability strategies on the most important issues and to understand the metrics that underpin each materiality issue that is reported. They also are encouraging Investors and other market participants to use the SASB materiality map “to analyze portfolio exposure to specific sustainability risks and opportunities represented by each material issue,” she added. 

In the end, the market will determine the future of SASB’s influence. 

Full Circle to ISO 45001

According to Seabrook, ISO 45001 can inform and play a role in creating solutions that cross borders. While the scope of ISO 45001 is not intended to include supply chain workers, “an organization can choose to leverage the ISO 45001 management systems approach as a solution to identify, control and continually improve opportunities to reduce or eliminate worker safety and health risk to workers in the supply chain,” she noted.

The American Society of Safety Engineers (ASSE) is the administrator of the U.S. Technical Advisory Group to ISO 45001.

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