August 3, 2023 / Charles Redinger and Mary O’Reilly

ESG: Why You Need to Engage and Lead

The environmental, social, and governance (ESG) train has left the station, and whether you like it or not, you're on it.

It's easy to get caught up in the social and political natter and think that ESG isn't germane to what we do as industrial hygienists and occupational and environmental health and safety professionals. But it is, and ignoring it professionally is a mistake. Whether you're in the field or engaging in policy or governance-level activities, you are expected to understand the basics of the IH and OHS metrics that feed into the ESG decision-making process.

The ESG space can feel like a carnival funhouse, where there is surprise, challenge, and possibly distorted reality. Carnivals are fun on the weekends, but not when the workweek begins to mimic them and their qualities impact decision-making.

Whether the train or funhouse metaphors resonate, it's important to understand what ESG is and isn't, how it impacts your professional endeavors, and how you need to engage with it. Beyond the basics of metrics and programmatic needs, we suggest there is a leadership imperative that our profession can support based on our decades of sound professional practice.

AIHA formed a Human Capital/ESG Task Force in 2021 to help the association navigate the ESG standards-development arena and increase members' understanding and competencies. The task force has developed a guidance document (PDF) to help OEHS practitioners understand ESG fundamentals and ensure that their programs anticipate and, at a minimum, meet current expectations of their organizations and stakeholders. The guidance document focuses on baseline metrics because they play a central role in disclosures and reporting. For more information on specifics such as the integration of human capital (HC) and ESG with existing management systems, auditing, leadership, and training, the guidance document provides a list of resources.

ESG is, at its roots, a finance-driven phenomenon, where "materiality" is the driving distinction. Materiality can be thought of as that which is important to creating and maintaining value for the organization. Examples of events that affect value are climate phenomena, fatalities, toxic spill cleanups, workers' compensation costs, and health litigation.

For many practitioners, ESG has evolved into a broader governance norm where the driving distinction is "double materiality," which encompasses the costs, financial and otherwise, that doing business extracts from stakeholders, surrounding communities, and the environment as a whole. Examples of double materiality include the external impact that an enterprise has on the climate, environment, society, humans, or any of the numerous aspects of sustainability.

OEHS metrics are foundational for regulatory compliance, management system conformance, and organizational risk decision-making. They are also foundational in ESG disclosures and external reporting. AIHA's HC/ESG guidance document offers numerous metrics for consideration. Ultimately, for ESG disclosures and reporting, it is important to understand the originating criteria for metrics, whether requested by a rating agency or required by a consensus standard. It's also smart to understand the materiality context of each metric: is its purpose for materiality or double materiality determinations or decision-making?

AIHA Connect 2024 will have an HC/ESG track. For those with HC/ESG experience, consider how you can contribute and offer leadership. Read the guidance document and think about how your work in management systems, auditing, leadership, training, Total Worker Health, and other areas links with HC/ESG.

There is ample time to submit proposals for education sessions and professional development courses by the September 13, 2023, deadline. To ensure your proposal is considered for the HC/ESG track, be sure to mark the appropriate checkbox on the submission form. If you'd like to discuss ideas for submission, reach out to Charles Redinger or Mary O'Reilly.

As OEHS professionals, we are on the ESG train together. We have a role to play in bringing clarity and sanity to this space, and to shift it from a funhouse atmosphere to one grounded in sound professional practice.

Charles Redinger and Mary O’Reilly

Charles Redinger is chair of the AIHA Human Capital/ESG Task Force.

Mary O'Reilly is chair of the AIHA Stewardship and Sustainability Committee.


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