The approach towards Environmental, Social, and Governance (ESG) considerations are changing for businesses in Australia. It seems that most of the companies see ESG only in the context of sustainability reporting and corporate social responsibility, but its implications are far wider than reporting on carbon emissions or being socially responsible.
One of the most important but often neglected parts of ESG is workplace safety and the general welfare of the employees. Here, the safety consultant and the ESG consultant must work together to make sure that safety and sustainability and corporate social responsibility are embedded in business processes.
Instead of viewing ESG compliance and safety compliance as two separate problems, more progressive Australian businesses should combine these two important areas to mitigate risks, improve reputation, and create a healthy workforce.
What Is Stopping Australian Businesses from Connecting ESG with Workplace Safety
A lot of businesses in various sectors like construction, mining, manufacturing, and logistics have started employing workplace safety consultants to comply with Work Health and Safety (WHS) laws. At the same time, pressure on corporate governance and sustaining economic growth has forced the hiring of ESG consultants to develop corporate governance strategies.
Unfortunately, both of those teams often operate separately, resulting in:
🔹 The inability to leverage ESG strategies to improve employee health and wellbeing.
🔹 Reports that omit important information such as health and safety at work neglect in their reporting of sustainability.
🔹 ESG has to be integrated into long-term risk management, rather than being treated as an obligation.
Australian businesses that do not try to link ESG with safety will have lower global competitiveness, less investor goodwill, and high unattended workplace hazards.
How can Safety Consultants and ESG Consultants Improve Workplaces
Instead of approaching the problem individually, ESG and safety consultants need to come together in a more holistic approach to make workplaces more sustainable and responsible.
- Consider employee safety and wellness as core part of ESG.
With respect to health and safety, ESG issues focus on the:
✅ Carbon footprint
✅ Inclusion and diversity policies
✅ Governance and management of the organization.
Nevertheless, workers’ health and safety should be a primary focus of their attention and included in the list of ESG metrics.
✔️ Include the incidence of injuries at work as an ESG metric.
✔️ Measure air quality, level of noise, and ergonomic conditions at the workplace and report them.
✔️ Set sustainability objectives that aim at improving safety, such as stopping the use of hazardous materials or helping reduce noise levels.
After integrating safety in ESG reports, businesses will prove that sustainability is not only about the environment, but also concerns people.
- Australia’s Climate Change Issue and Risks to Workplace Safety
As a result of Australia weathering more severe weather events, companies need to look at climate risk through an ESG and safety perspective. The following are worsened by climate change:
☀️ Extreme heat: New workplace safety risks in mining, agriculture, and logistics.
🔥 Bushfire risks: There’s a direct impact on outdoor workers and construction workers.
🌊 Flooding and rising sea levels: This impacts infrastructural development and emergency preparedness.
Safety consultants and ESG consultants can:
✔️ Adopt policies that shield workers from extreme weather events through climate-adjustable workplace policies.
✔️ Safeguard new infrastructure investment regarding climates’ fury.
✔️ Stop work-related heat stress, exposure to air pollution, or flood-related hazards through proactive environmental monitoring.
Combining real heat-resiliency with workplace safety policies increases ESG compliance while shielding workers.
- Ethical Supply Chains: Compliance with ESG Safety Risks
An increasing number of Australian businesses report sustainability risks within the supply chains they audit, but few take into account worker safety in their ESG policies.
Ethical sourcing policy should include more than just the environmental aspects of those suppliers:
✔️ Ensure suppliers follow outlined safety policies.
✔️ Supervise workplace conditions in high risk industries such as mining, textile manufacturing, and agriculture.
✔️ Make third party subcontractors responsible for the health of the workers.
Incorporating ESG consulting into safety consulting enables firms to enhance their ethical supply chain commitments while safeguarding workers at all levels of the value chain.
- Operational Safety and Infrastructure Sustainability
While ESG consultants focus on green buildings, sustainable infrastructure, and the carbon-neutral operation of facilities, they also need to think about worker safety in relation to those projects.
Other common projects within ESG efforts, like building solar farms, wind energy sites, and eco-friendly construction, have specific hazards associated with them which include:
🔹 Wind turbine noise.
🔹 Electrical hazards in renewable energy installations.
🔹 Exposure to hazardous materials in green construction.
If safety consultants are included in the ESG planning phase, businesses can:
✔️ Avoid creating new workplace risks from sustainability projects.
✔️ Incorporate safety-by-design approaches to green infrastructure.
✔️ Implement the use of worker safe materials that need to be used in the construction.
Such collaboration ensures that there will be no tension between sustainability/environmental protection and occupational health and safety.
Gaining Competitive Advantages Through Ignoring ESG Policies and Safety Protocol
If a company does not align its ESG and safety policies, this could result in consequences such as:
❌ Damage to reputation as companies are perceived to be claiming sustainability while in fact having bad worker safety standards.
❌ Increased costs from worker injuries, penalties due to litigation, and claims-covered expenses.
❌ Not complying with regulations where Australian WHS laws are changing with the introduction of more ESG policies.
In contrast to the above, businesses that integrate ESG with workplace safety gain from:
✅ Responsible workplace practices mitigates long term liabilities leading to increased investor confidence.
✅ Businesses that take care of their employees’ safety and well being have lowered turnover among workers.
✅ Increased efficiency as there is less disruption to business operations due to absenteeism.
The Future of ESG and Safety Consulting in Australia
- AI and Data Driven Safety and ESG Reporting
New technology comes with the ability to monitor workplace risks in real time within ESG frameworks.
🤖 AI-based risk assessment estimates probable safety risks.
📊 ESG compliance dashboards automate the tracking of environmental and workplace safety goals.
🚨 Monitoring worker’s exposure in real time enhances decision making for ESG and safety personnel.
Greater regulation of ESG policies covering work place safety
Australia is likely to implement tougher ESG legislation covering employee welfare in light of international ESG reporting norms.
This means:
🔹 Companies will be responsible for safety in their supply chains and overseas business activities.
🔹 There will be a requirement that corporate sustainability reports include safety disclosures.
🔹 There is a possibility of increased monetary penalties due to breaches regarding safety and ESG issues.
Forward thinking businesses will seek to combine ESG and safety measures ahead of legislation requiring such action.
Concluding Remarks: What is Australia’s ESG and Workplace Safety Outlook?
It is no longer viable to manage ESG issues in conjunction with workplace safety issues separately. In their quest toward building ethical, resilient, and future-ready businesses, Australian organisations need to:
✔️ Put employee health into ESG reporting outcomes.
✔️ Create responsive workplace policies that deal with climate-related safety hazards.
✔️ Protect workers in responsible supply chains that guarantee sustainability.
✔️ Integrate safety and sustainability targets in infrastructure and operational investments.
Merging the roles of ESG consultants with that of safety consultants enables the business to mitigate risks in a rapidly changing world while making their workplaces safe, green, and socially responsible.
