Transcript GEMI March 2002 Benchmarking Survey Choosing HSE

GEMI March 2002 Benchmarking Survey
Choosing HSE Priorities
in a Time of
Economic Difficulties
George Nagle
Bristol-Myers Squibb Company
March 14, 2002
1. Which of the following best describes the
overall change to your company’s employee
population over the last 2 years?
32%
52%
16%
Increased
Stayed Same
Decreased
2. If it has decreased, by how much?
21%
43%
36%
Less than 10%
10% - 20%
More than 20%
3. Which of the following best describes the
overall change to your company’s HSE staff
over the last 2 years?
20%
52%
28%
Increased
Stayed Same
Decreased
4. If it has decreased, by how much?
20%
47%
33%
Less than 10%
10% - 20%
More than 20%
5. Compared with 2 years ago, has your
current companywide HSE operating
(non-capital) budget…..?
28%
44%
28%
Increased
Stayed the Same
Decreased
• Overall average change in
operating budget: -2%
• Average operating budget
increase: 20%
– Range of responses:
5% - 70%
• Average operating budget
decrease: 20%
– Range of responses:
5% - 50%
6. Compared with 2 years ago, has your
current companywide HSE capital budget…..?
24%
36%
40%
Increased
Stayed the Same
Decreased
• Overall average change in
capital budget: -7%
• Average capital budget
increase: 34%
– Range of responses:
5% - 100%
• Average capital budget
decrease: 21%
– Range of responses:
10% - 50%
7. If there have been decreases in HSE staff,
in which of the following areas have they
occurred?
15
10
5
0
Corporate Group
Business Sector Groups
Site Staff
8. If downsizing has occurred, how has the
HSE staff been impacted as opposed to other
groups?
19%
19%
62%
Impacted More
The Same
Impacted Less
9. Have you discontinued certain HSE activities
over the past 2 years due to decreased resources?
48%
52%
Yes
No
10. If the answer to Q-9 was Yes, in which
areas were activities decreased?
• Participation in industry trade
associations (10)
• Participation in professional
associations (9)
• External Affairs (8)
• Regulator/Legislative Affairs
(7)
• Internal Communications (5)
• External HSE Reporting (4)
•
•
•
•
•
•
Safety (4)
Environmental (4)
Training (4)
Medical (3)
Industrial Hygiene (2)
HSE-related
Engineering (2)
• Analytical Testing (1)
• Process Safety (0)
11. If the answer to Q-9 was Yes, in which
areas were activities outsourced?
•
•
•
•
Medical (4)
Analytical Testing (4)
Training (4)
HSE-related Engineering
(4)
• Environmental (3)
• Industrial Hygiene (3)
• Regulatory/Legislative
Affairs (3)
•
•
•
•
•
External HSE Reporting (3)
Safety (2)
External Affairs (1)
Internal Communication (1)
Participation in industry
trade associations (0)
• Participation in professional
associations (0)
• Process Safety (0)
12. Are there any areas in which activities has
increased?
36%
64%
Yes
No
12. Areas in which activities has increased
(continued)
•
•
•
•
•
•
•
•
•
Environmental (2)
Training (2)
External/Internal Relations (2)
Participation in Industry/
Professional Organizations (2)
Environmental air issues (2),
environmental due diligence
Ext. Environmental Reporting (2)
Increased focus on Product
Stewardship and Product Safety (2)
ISO Certification/Verification
Process
Corporate Citizenship activities
•
•
•
•
•
•
•
•
•
Staff at facility and business group
level has been increased to address
program enhancements
Internal governance programs
Supply chain environmental
management
OSHA Star Program
Technical support to sites’ compliance
efforts
Title 5 and MACT requirements
(US only)
Regulatory Monitoring
Stakeholder relations
Six Sigma
13. How would you rate the breakdown of
your HSE activities at this time?
• Average % of current proactive HSE
activities: 45%
– Range of responses: 5% - 90%
14. How would you rate the breakdown of
your HSE activities 2 years ago?
• Average % of proactive HSE activities 2
years ago: 44%
– Range of responses: 5% - 90%
15. Which of the following actions have you
undertaken in response to changes in resources?
•
•
•
•
•
•
•
•
•
Reorganized HSE functions (18)
Changing auditing frequency (13)
Delegated more responsibilities to line management (13)
Implemented new HSE information management
systems (12)
Installed more management systems (9)
Rewriting standards (7)
Hired more consultants (7)
Outsourced activities (6)
Changing subject matters areas audited (5)
15. Continued.
• Others:
–
–
–
–
–
–
Undertaken Worldwide EMS Review
Instituted Corporate & OpCo Compliance Functions
Priorities setting, managing
Time management
Reduce redundancy
Better pair skills, synergies, staff development
16. In decision-making on changing priorities,
which of the following have you utilized?
•
•
•
•
•
Multi-disciplinary team (18)
Survey of customers (16)
Benchmarking peer companies (16)
HSE staff decision (14)
Other:
– Review & assessment of internal needs
17. What issues are you expecting to take
increasing amounts of your resources in the
next year?
• Public reporting/
transparency (16)
• Product stewardship (15)
• Air (12)
• Sustainability (11)
• Water (11)
• Corporate Citizenship or
Social Responsibility (10)
• Safety (8)
• Pollution Prevention (7)
• Regulatory reporting (7)
• Complying with voluntary
standards (4)
• Health (3)
• Stormwater (3)
• Others:
– Supply Chain EHS Management
– Investor Relations
18. What is your current HSE strategic
planning time horizon?
15
10
5
0
1 Year
2 Years
3 Years
5 Years
10 Years
19. Do you believe that a company’s HSE performance
can “coast” for a period of time after resources are cut
until performance begins to noticeably deteriorate?
12%
32%
Yes
56%
No
Don't Know
• 1-2 years (11)
• 9-18 months (2)
• Variable, but no more than 2-3
years
• Very dependent upon how
advanced the current
performance is
• Depends on condition of the
EHS management system when
cut took place
20. Based on your experience, what are the first
signs or symptoms that a company’s HSE program
may be suffering from lack of resources?
• Responses were grouped into the following
categories:
–
–
–
–
–
Compliance Issues (14)
Internal Audit Performance (6)
Increased Accident Rates (5)
Poorer Employee Opinion Surveys (3)
Lack of Progress on Company Goals (3)
(Specific comments are listed on the following 3 pages.)
20. Based on your experience, what are the first
signs or symptoms that a company’s HSE program
may be suffering from lack of resources?
• Increase in accident rates and increase in compliance issues
• Compliance problems, increases in emissions, unhappy colleagues
leaving the company
• Performance metrics on EH&S, employee opinion survey,
customer survey decrease
• Poorer audit performance
• NOV’s, bad audits
• Beyond compliance program accomplishments diminish
• Surprise issues appear, regulatory recordkeeping and compliance
issues appear for routine type items. Regulatory deadlines are
missed. Organization is constantly in a reactive mode.
• Ignoring issues until they blow up in your face.
20. Continued.
• Increase in accident rates.
• Relative increase in Notices of Violations from government
regulatory inspections.
• Decrease in employees perception of company’s EHS performance
in periodic employee opinion surveys.
• Increased incident rates.
• Basic compliance performance start to suffer (e.g. recordkeeping)
• Program execution problems (training, recordkeeping, audit
frequency slippage, etc.)
• Short term decrease in effort directed to proactive activities. More
outside contracting/consulting of required activities and less
outside contracting/consulting on proactive activities.
• Noncompliance - fines
• Near miss and recordables increase
20. Continued.
• Increased audit findings, more frequent permit exceedances.
• Poor results on company E&S assessments.
• Lack of progress toward established goals and regulatory noncompliance.
• Personnel (staff issues)
• Increased variety and quantity of “minor” issues in compliance,
training, staff utilization and competence.
• Employees lose focus of their role in ESH and improvements
began to slow down. Something needs fixing but may not
involve more personnel or resources.
• The nature and number of audit findings and increased safety
and environmental incidents.
• Things fall through the cracks; compliance problems.
• Lack of timeliness, no progress on strategic plan.
21. Do you consider your company an HSE
leader?
4%
20%
76%
Yes
No
Unsure
22. Do you feel that your company is currently
adequately covering all HSE compliance issues?
20%
12%
68%
Yes
No
Unsure
23. What are your major concerns for the
future related to HSE staffing and resources?
• Lack of specialized HSE knowledge, loss of institutional knowledge, no
depth on the “HSE bench,” lack of career development opportunities in
HSE
• We are less concerned than we were since senior management is clearly
focusing on the whole area of Social Responsibility far more than ever
before
• Development of colleagues across the organization to anticipate EHS
opportunity as a regular part of their overall decision making. Integrating
EHS into the regular mindset of all colleagues. Developing EHS
professional to be the facilitators, expert advisors, and communications
specialists. They are not necessarily prepared for these new roles.
• That we take a SMART approach to compliance and continuous
improvement and don’t fall into the trap that simply “throwing more
people” at the issues will fix them.
23. Continued.
• Expectations of flat budget will continually pressure means to reduce costs
including staff. We are trying to focus on transitioning the perspective of the
group from a necessary overhead to one of value added to businesses where
they desire stronger support with more resources. You have to try.
• Potential continued reductions unless economics improve soon.
• Inadequate attention to detail will result in releases, fines/penalties,
reorganization.
• Concerned that management may decide to outsource the function.
• Employee motivation and the resources will continue to decline while the EHS
issues will increase in complexity.
• We have not seen the bottom.
• Need to continue to invest in EHS team’s professional training and
development.
• Delegation of EHS functions to line management is easier said than done,
especially when line management’s resources are also being reduced.
• Maintaining a proactive/leadership position.
23. Continued.
•
•
•
•
•
•
•
•
•
•
•
Competition for resources in a rapidly expanding organization.
Changing regulations, changing regulatory enforcement emphasis.
An aging demographic with no new hires.
International technical support.
Meeting the sustainable issues.
Change in basic company structure.
Inability to comply with exponentially increasing air requirements (especially
MACT standards).
We would like to eventually be considered an HSE leader and are now trying
to “sell” and implement sustainability. Will we have the staff to do this?
Unintended consequences.
Having enough qualified professionals to meet challenges and inability due to
many HR laws about replacing inadequate personnel.
Transferring knowledge base to new, younger employees as the workforce
transitions; having enough resources to deal with new regulations.
24. If you could anonymously deliver one
message to the CEOs of the Fortune 500 on this
topic, what would it be?
• HSE protects the reputation of a company in many ways and a good
reputation built over a long time can be lost in a very short time.
• Investors will judge companies on how they manage their Social and
Environmental performance in both good and bad times, but, you will
be sanctioned more heavily over a longer period if you let up in these
areas because of “temporary” economic difficulties.
• EHS must remain a key priority of the business.
• Effective EH&S program management is not just a compliance
requirement, but is a competitive advantage if managed correctly.
• Don’t through the baby out with the bathwater.
• Strong EHS programs help achieve business objectives.
• Don’t be short-sighted. Look to long-term sustainability and how HSE
contributes to that.
24. Continued.
• Evaluation and validation of resources is good for the organization, but
make sure you clearly understand the difference between leadership,
compliance, and inadequacy and the resource levels needed for each.
• Take the long view in terms of corporate reputation.
• Would you put a family member on a plane where the preventative
maintenance and flight crew training just barely meet minimum
government requirements? Wouldn’t you want them on an airline with
programs that were reasonable and necessary? Then why not strive for
the same in the level of EHS performance within your own company?
• Don’t sacrifice HSE for the short term.
• Make sustainability a priority: if you do it right, it will pay for itself.
• Ask questions within your organization concerning the HSE
governance capabilities and look closely at the results.
• Cut HSE budgets as an extreme last resort. Be flexible and allow HSE
professionals to adjust priorities with changing business challenges.
24. Continued.
• Pay for people or pay fines!
• Today’s improvement efforts will bring about next years rewards or
punishments.
• Be a leader in Sustainable Development.
• If resources are cut to an extent that our ability to perform our job effectively
is seriously curtailed, the ultimate cost to the corporation in increased fines
and loss of corporate image will be several times the money “saved.”
• E&S (if done correctly) is value added, not something that is required to be
done and that detracts from the main business. It must be implemented and
viewed as adding value to the company’s core business.
• Do not allow a perception in y our senior managers that you are less
committed to EHS while you expect improved efficiencies and productivity
in the company. The assurance process should be emphasized, top-line
opportunity processes vigorously managed, staff developed, and maintain
appropriate proactive programming that you not fail to meet your underlying
core values or future business opportunities.
24. Continued.
• The CEO’s personal leadership is vital to maintaining good HSE
performance.
• The public and non-governmental organizations (NGOs) are better educated
and focused and are putting more pressure on companies. The competition
is funded by the charitable trusts and they have an extensive amount of
funding. We need resources to address these issues.
• HSE requirements do not change with the economy.
25. If you could anonymously deliver one
message to HSE government regulators on this
topic, what would it be?
• Consider offering incentives for those companies that go beyond
compliance
• EHS must remain a key priority of the business.
• EH&S can focus on the correct solutions without all the burdensome
regulatory requirements if they would accept transparent performance
reporting.
• Allow for more innovative approaches but expect good performance
from companies.
• Allow more flexibility to meet targets/objectives.
• Focus government resources on the important stuff. Continue to use
market (emissions trading) to drive improvements.
• The lack of enforcement for the last 10 years encourages companies to
take risks and under-fund the resources. Government requirements and
enforcement assist in bringing visibility to the issues at hand.
25. Continued.
• Eliminate the paperwork nightmare.
• Support research which demonstrates the business benefits of good EHS
performance.
• Use more voluntary programs with incentives.
• Focus regulations on performance/outcome, not nitty-gritty how-to details.
• Understand the real costs of regulation and make sure these requirements
result in improvements to human health.
• Consider long term effect to business, economy, and environment when
evaluating regulatory modifications.
• Everyone must win for anyone to win.
• Regulations need to support all legs of Sustainable Development.
• The same message that should be delivered at any time: Concentrate on
regulations that have an impact on the environment -- don’t burden us with
excessive recordkeeping and reporting that do nothing except increase our
costs.
25. Continued.
• Regulators must have enough resources to review and act upon permit
applications and remediations proposals. Re: otherwise business activities
are unnecessarily slowed down.
• Add real incentives to encourage improvements versus following shallow
comments by NGOs. Also, regulatory agencies are employing many nonqualified individuals that should not be in the job. Believe they would do
better if they outsourced entire function to private industry with certain
checks and balances in place.
• Take a long vacation - you deserve it.
• We need to make our processes work to deliver sound public policy by
balancing the environmental, energy, and economic policies. This would
help us focus on risk and good science.
• Focus on regulations that have a real impact on HSE improvement.
26. Is there any advice or tips that you have found are
particularly effective in managing HSE priorities in times
of economic difficulties that you would like to share?
• We have to learn to better communicate the value being created through HSE
activities in financial terms to the CEO, CFO and to the investors.
• The most important is not to lose (and indeed to transfer) the skills of the
middle managers who manage these issues and see it as their “calling.” Once
you’ve lost the institutional knowledge that these people have, it is very
difficult and costly to restore it.
• Get EHS integrated into the mainstream of the business; put in fully integrated
EHS management systems.
• If the EH&S function focuses more on their company business practices along
the supply chain, they can evolve into a more effective position in their
organizations.
• Be sure and be very up front when discussing what types of support you will
no longer be providing as a result of staff cuts. Senior Management depends
on you to tell the whole story, regardless of how much they don’t like it.
26. Continued.
• Continue to look for efficiencies where possible. Make sure that you are part
of the solution in efforts to reduce costs.
• Make sure you have good cost justifications for as many activities as
possible to ensure that you can show good value for the company.
• Look for corporate initiatives that you can piggyback to improve EHS.
• Try to get a high-level supporter or champion.
• A clear understanding of the business priorities is a must and how EHS
contributes to the key business goals and strategies is exceedingly important
when engaging in dialogue with various management teams.
• Be clear on who makes the decisions.
• Even with diminished resources, maintain visibility, don’t hunker down. Go
out of your way to make friends with your finance and accounting people.
• Eliminate the unnecessary reporting - work on value-added items versus self
gratification items.
26. Continued.
• Continue to focus presentations to management on the financial benefits of
high level of EHS performance - e.g. reduced injuries lead to reduced
workers compensation and insurance costs, certain health and wellness
programs translate into direct bottom line savings in medical benefits costs,
certain pollution prevention projects have translated into significant savings
in raw material and disposal costs as well as risk avoidance, etc.
• Make sure senior management understand how the HSE processes impact
the overall corporate business priorities and that HSE resources are being
efficiently applied to accomplish these priorities.
• Focus on goal setting and priorities. Train your employees in HSE issues,
both regulatory and proactive, and instill in them the attitude to take
responsibility for their HSE actions.
• Keep the NEED TO DO on the table and let go of the NICE TO DO. It can
come back when economy improves.
• It must stay as the number one items and not second.
26. Continued.
• We must get the businesses to understand that E&S is not just the
responsibility of the E&S professionals, but of the businesses as well.
E&S professionals must really focus on “value-added activities.” We must
look at the activities we are currently performing and determine if we
really need to perform them, and if so, we must determine if there is a
more effective way to perform that activity.
• Look for cost-effective ways to get the job accomplished and rack-stack
priorities if crunch severe.
• Don’t give up…COMMUNICATE in advance with upper executives what
an issue is and why it is important before decisions are made. This is key.
• Improve your management systems, drive HSE accountability to the line
management.
27. Would you like to see a GEMI workgroup
formed to investigate the issues around “doing
more with less?”
28%
56%
16%
Yes
No
Unsure