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Integrating Health & Safety into Sustainability Reporting, What does it Mean for Duty of Care?


The International SOS Foundation Duty of Care Awards 2021 has just ended and for the first time included a dedicated stream to sustainability. We invited two renowned experts, Karla Guerrero Lozoya and Louis Wustemann, to discuss with us recent trends on Environmental, Social Governance (ESG) reporting, the impact of COVID-19 on sustainability and Duty of Care, and finally some prediction on what we can expect in the near future regarding pledges to global health and sustainability.

There is an increased expectation from each stakeholder on more transparency regarding ESG data and standards. ESG factors are important drivers for economic performance and impact financial risk and return, and this is key for shareholders as well as investors. However, it is not only shareholders and investors that are keen on ESG data, each stakeholder and pressure groups want to better understand and compare sustainability performance. We should move towards a place where there are similarities of data within the same sector and these should be comparable, then individual companies have specific ESG based on their materiality assessment.

As demands for transparency and comparability increase and standards multiply, materiality is also evolving. In June 2019, the EU introduced the concept of double materiality: the impacts of environment and society on a company, the impacts of the company on the environment and society. It started with a focus on E (climate change), but it is now clearly extended to the S (social, health, human rights and economic dimensions). In 2020 “dynamic materiality” was also discussed by the World Economic Forum (WEF). Finally, the five reporting standards organizations, CDP, CDSB, GRI, IIRC, and SASB in September 2020 described materiality as "nested and dynamic" and presented a comprehensive corporate reporting system with three lenses.

These changes in the concept of materiality reflect a change in expectation from reporting to strategy: a necessary shift in the corporate approach. COVID-19 has accelerated pre-existing trends. But it has changed the reporting landscape as well:

  • it is the context in which companies operate and therefore it must be accounted for and reported;
  • it has put health and human resources firmly on the ESG framework, also by expanding the understanding of risk and Duty of Care;
  • supply chain and its disruption became central to business continuity as well as sustainability;
  • it has highlighted vulnerabilities and inequalities in the system and these issues will require a new way to be dealt with.

Health and safety as well as sustainability are clearly a C-suite priority now. Unfortunately, it looks like sustainability has not joined fully the COVID-19 crisis management response team and efforts, and this will require new adjustments (pg 53). Companies will need to evaluate their response to the COVID-19 pandemic and ensure they are better prepared for new health events and ensure their response are sustainable and just.

There is an increasing complexity of ESG data produced that require capturing and reporting, additionally COVID-19 generated many new data, further increasing the complexity of this aspect. At the same time, we want more concise and comparable reports. How to reconcile these opposite pressures? And how can companies with a global footprint operating in the diverse legislative frameworks, report consistently all these data? Materiality assessment should be the guide to identify what is really material for a company, identify the risks and impacts and reflect those in the business plans, allows companies to devise appropriate implementation and tracking systems bringing together all the needed departments. Additionally, there should be a bigger share of ESG data covering occupational health and safety. Most companies follow national requirements and have clear policies in place.

These should be strengthened by strong implementations procedures and monitored through comprehensive and harmonised data tracking. In this context, an important contribution is the adoption of a comprehensive health management system (e.g. in line with the Global Reporting Initiative (GRI) Standard 403: Occupational Health and Safety 2018), coupled with the company’s commitments to community engagement and consumers‘ health and safety. The role of the Chief Health Officer (CHO) in coordinating and monitoring the health, safety, and wellbeing efforts towards workers, consumers and society is essential. These efforts require to show the effectiveness and long term sustainability, therefore measurement of outcomes and impacts in the form of ESG data is routinely included in sustainability reports. The CHO is an important player of the sustainability team.

This is the way for a company to demonstrated that it is “future-proofed” as in the end, all the E and S issues are G ones, and good governance deals with those aspects. So ESG, including health and safety, should regularly be on the board’s agenda.

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