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Why occupational safety, health and wellbeing is a foundation of socially sustainable business November 2021

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Why occupational safety, health and wellbeing is a foundation of socially sustainable business

November 2021

32

Contents

Introduction 4

1 An introduction to sustainability and human capital

1.1 Sustainability isn’t a goal – it’s a balanced, living system. 8

1.2 The sustainability reporting landscape leaves room for improvement. 10

1.3 To understand social sustainability, we first need to understand human capital. 12

1.4 Measuring the value of social sustainability requires universally aligned reporting standards. 14

2 Putting people first

2.1 The modern world of work is full of new opportunities and challenges. 18

2.2 Human capital means something very different to workers – and their families and communities. 22

2.3 Integrated data-driven reporting must reflect the workplace experience of individual workers and worker groups. 24

2.4 Integrated thinking and decent work. 26

3 OSH, social sustainability and organisations

3.1 Making the business case for social sustainability. 30

3.2 The organisational perspective: radical transformation may be required. 32

3.3 The practitioner perspective: in the short term at least, change will need to be self-driven. 34

3.4 Conclusion: Current human capital challenge. 36

Glossary 38 References 40

Introduction

An introduction to sustainability and human capital

Putting people first

OSH, social sustainability and organisations

Glossary

References

54

1Introduction

Sustainability in business has become synonymous with measuring and monitoring the environmental impact business has on the planet, along with economic impact – but while it’s critically important, sound environmental governance is only part of an organisation’s sustainability story… At IOSH we recognise and champion the pressing need to view sustainability as a broader humanitarian issue, putting people alongside planet and profit.

The benefits of decent work are immense, giving all humans a sense of purpose and a dignified means to support themselves and their communities. Our wider societies can then flourish and thrive – and social issues such as occupational safety and health (OSH), human rights, labour rights, equality and human capital are increasingly recognised as central to corporate sustainability.

Indeed, global bodies, investors, and regulators are keen to measure and report on social sustainability, but there is no universally defined and agreed process that organisations can follow with confidence – perhaps through a lack of understanding of the exact contributions individual workers make to organisations and supply chains, and the exact impacts (both positive and negative) that these have in turn on workers. Likewise, there are also shareholders and investors who are interested in transparency and disclosure as part of the corporate governance framework and performance measurement.

We believe that organisations will continue to struggle to develop the capacity to undertake measurement, until they develop a deeper and clearer understanding of the relationship between social sustainability and OSH.

IOSH believes OSH is fundamental to building and maintaining sustainable work for the future.

This paper is designed to overcome one of the key barriers to developing deeper understanding: the huge disconnect between the high-level language of social sustainability and the everyday language of OSH. We aim to empower progressive OSH practitioners and their organisations to catch the wave of social sustainability by giving them the tools and vocabulary they need to respond to the growing demand for social sustainability measurement and disclosure.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

The benefits of decent work are immense, giving all humans a sense of purpose and a dignified means to support themselves and their communities.

76

1 An introduction to sustainability and human capital

98

Manufactured Capital

Social Capital Human Capital

Natural Capital

Finance Capital

1.1 Sustainability isn’t a goal – it’s a balanced, living system.

While convenient, the definition of sustainability as one generation meeting their needs without compromising those of the next (Brundtland Commission, 1987) is too simplistic to be very useful. The reality is that sustainability issues take place within constantly shifting and cross-cutting landscapes, where any number of cultural, social, economic, political, industrial, human and non-human aspects overlap with each other.

These issues can’t be managed with simple linear approaches. Sustainability isn’t a straightforward goal that can be achieved through incremental progress. It’s a system – and a complex one at that – requiring systematic, purpose-driven change (Ben-Eli, 2018). Sustainable organisations are principled, committed, open, and societally and regionally aware (UNGC, 2014). A key aspect of becoming such an organisation is an understanding that all of its key activities take place as part of an interconnected system.

In a financial context, this has been referred to as the balanced interplay between five ‘capitals’: natural, human, social, manufactured and financial (Forum for the Future, 2021). For example, too keen a focus on financial capital growth is likely to be detrimental to social sustainability and natural capital stocks. Like all systems, it’s about carefully managed balance.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

Fig. 1 Sustainability is the balanced interplay between five ‘capitals’.

The growing demand from global bodies, investors and standard setters for organisations to measure and report on each of the five capitals stems, partly from the recognition of this interconnectedness between them, and partly from the belief that sustainable value can only be created by nurturing growth in each area.

OSH professionals are perfectly placed to kickstart a wave of change.

For OSH professionals, with their vested interest in securing work that is sustainably safe and healthy for all, identifying ways to measure and report on the value of human capital is just one consideration. Sustainability remains a radical programme driven by the desire for a “substantive redistribution of power” (Thompson, 2015). By continuing to advocate for the fundamental right to safe and healthy work for everyone, every day, the OSH profession can use its voice to contribute valuably to the second wave of sustainability.

Sustainability issues take place within constantly shifting and cross-cutting landscapes.

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1.2 The sustainability reporting landscape leaves room for improvement.

While there’s been an encouraging increase in sustainable impact reporting…

The number of companies globally who are reporting on their sustainability impacts continues to rise (Van der Lugt, et al., 2020), driven either by decree or by a broader belief in the transparency of the reporting process. Likewise, the number of companies whose reporting makes direct links to the United Nations’ Sustainable Development Goals (UN SDGs) has also increased significantly since their launch in 2015.

…there are question marks over quality and transparency.

On the other hand, the quality of the information that companies disclose has been a source of debate (O’Neill, et al., 2016), with question marks often raised over reliability, timeliness, stakeholder engagement and so on (Badia, et al., 2020; Frank Bold, 2019).

According to research into sustainability reporting in relation to the UN SDGs specifically, non-financial disclosures are often unbalanced and disconnected from business goals: “corporate reporting on [them] focuses almost exclusively on the positive contributions companies make towards achieving the goals and lacks transparency of their negative impacts” (KPMG, 2020). While many organisations have managed to improve their reputation through the reporting process, too few have been able to use the data to meaningfully reflect – or improve – their sustainable performance.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

A mandatory governance approach is desirable – but not straightforward.

Progressive businesses are already recognising the need to catch the wave of social sustainability early in order to get ahead of anticipated mandatory expectations. While IOSH advocates for a shift to a mandatory governance approach that more closely aligns financial and non-financial reporting, there are clear barriers to the widespread adoption of this, not least an understanding of human capital itself.

Increasing numbers of companies are linking reporting to the United Nations’ Sustainable Development Goals (SDGs).

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1.3 To understand social sustainability, we first need to understand human capital.

In a workplace context, the term ‘human capital’ is broadly understood as the value of the skills, knowledge, ideas, innovation, and health of both workers and, by extension, entire workforces. In the right conditions, these qualities dovetail and help develop any number of business-useful capabilities: everything from leadership and reputation to soft skills and OSH competence itself.

These qualities are not limited to use in the workplace; they can be used to benefit wider society. Equally, some may actually originate entirely independently of the workplace and be applied within it. In any case, the value of human capital – and therefore a business’ social sustainability – is like any other form of capital, it can rise and fall. The value of human capital grows because of investment in it, stagnates when investment isn’t forthcoming, and can even depreciate because of neglect, abuse, or lack of protection.

The OSH of a workforce is arguably its most valuable form of capital.

It’s been suggested that worker health is both a form of capital itself, and also an enabler of other forms of human capital (Bleakley, 2010) – the OSH of individual workers facilitates the development of skills, knowledge, innovation, ideas and so on. These characteristics are then utilised to create value within an organisation, across supply chains, and in society more widely. IOSH advocates a transparent, human-centred approach that properly values the role of OSH in developing and protecting human and relationship capital. It’s important that workers are recognised as material to organisational success and sustainability, with people at the heart of the agenda.

Like any other form of capital, the value of human capital can rise as well as fall.

Worker health and business health are inextricably linked.

If human capital is central to the creation of value, and if worker health ultimately facilitates many of its components, then meeting the occupational safety, health and wellbeing needs of workers is arguably the starting point of a wave of change, and the most fundamental aspect of sustainable organisational development.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

Because human capital is so intangible, measuring it starts with a deeper understanding of it.

Given that it is intangible, human capital has naturally been more difficult to measure than other capital – and when social sustainability and human capital disclosures in reports are weak or ineffectual, they do not provide adequate insight for the stakeholders who view them. One key concern is whether the most effective ways to measure and express human capital information are currently being used and many of the organisations and practitioners responsible for the reporting process lack a strategically – and operationally – friendly understanding of the value of human capital.

There is a need, therefore, to bridge the gap between a high-level understanding of what human capital refers to (i.e., what is referred to in international codes, standards, and guidelines) and its meaning in the everyday context of the workplace.

Fig. 2 Meeting the needs of workers is the bedrock of sustainable value creation.

Value CreationWorker Health Ideas

Innovation

Skill Development

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What does good reporting look like?

The sustainability reporting process is not a singular activity driven by the publication of a final report. Instead, a report should be just one output of a broader process that provides opportunities for retrospection, anticipation, and reflection. The whole process should be geared towards generating meaningful, decision-useful information for all stakeholders, both externally and internally.

Reporters should focus on gathering data that may impact the organisation’s condition or its performance. While a report might ultimately communicate positive information about an organisation’s recent environmental, social and governance ESG performance, it should also be capable of demonstrating the long-term value of this performance to interested stakeholders. And it’s important that reporting is balanced and rounded. Where information gathered is unfavourable or simply unclear, it provides a learning opportunity from which adjustments can be made.

Those with a stake in business are no longer interested solely in how it makes profit – they want to understand how its profit-making affects people and the environment. They want to know how sustainable it is.

Before they invest in a business, companies and investors need to know that it has a long-term plan for managing the skills, knowledge and experience that are integral to a sustainable business model. Procurement teams are looking for the same kind of assurances – assurance can’t be captured in financial metrics alone. Let’s not forget that consumers and employees are also seeking sustainable businesses.

Social performance and human capital management reporting evidences how companies pursue profit built on culture, systems and governance protecting the people who work for it long term and people in the supply chain. However, the proliferation and overlap of reporting frameworks can make this challenging for organisations to manage – especially SMEs working across multiple supply chains and sectors.

The bottom line? Social performance can no longer be separated from financial performance.

Back in 2018, IOSH’s The Healthy Profit reported that the social performance of an organisation, and specifically its human capital, has become inseparable from its financial performance.

1.4 Measuring the value of social sustainability requires universally aligned reporting standards.

It has become increasingly important for organisations to be able to accurately quantify the value of social sustainability, including the risks and opportunities it presents, and the level of investment. In line with this, IOSH supports the use of consistent, comparable and reliable OSH performance data in internal and public annual reports.

Internally, such performance data might be used to:

• Improve risk identification, risk management and OSH performance

• Inform policies and plans

• Help management better see the links between non-financial and financial performance.

Externally, such non-financial disclosures can:

• Establish or improve organisational reputation and brand

• Evidence genuine commitment to sustainable development – for example, in procurement exercises

• Secure new investment.

Broad consensus exists on the value of reporting – but not what to measure, and how.

The number of reporting provisions continues to grow at pace, with a raft of new public laws and regulations, codes and guidance having been introduced in recent years (Van der Lugt, et al., 2020). However, while there is broad consensus about sustainability reporting as an instrument of choice for telling an organisation’s sustainability narrative, there is still a lack of consistency over exactly what to measure and how.

This is particularly true in the OSH space, where traditionally the focus on historic data (i.e., lagging indicators such as rates of injury, fatalities etc) is not only limited in its usefulness to the business and shareholders, but also poorly reflects the way that, in reality, OSH permeates throughout an organisation and its wider supply chain. Inclusion and visibility of all workers, and the organisational value of human capital and its materiality to success, are often missed. IOSH would like to see the OSH content of sustainability and socially responsible investment indices strengthened and with a combination of both leading/predictive and lagging indicators.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

Narrow focus on lagging indicators is a poor reflection of the value of OSH.

2 Putting people first

1918

Automation

Climatechange

Low carbon economy

E-commerce

Digitalisation

Globalisation

Platform work Aging populations

and low birthrates

Remoteworking

2.1 The modern world of work is full of new opportunities and challenges.

Seismic shifts in the world of work have taken place in recent years. These include widespread changes to the labour market itself, where factors such as globalisation and automation have created skills shortages that are not easily or quickly resolved. The proliferation of platform work (also known as the gig economy – think Uber, Deliveroo and TaskRabbit) has created entirely new worker types, legal complications and working conditions. Human-induced climate change has heightened the vulnerability of many workers to environmental hazards (ILO, 2018). All told, these changes have made it ultimately more difficult to obtain decent work (ILO, 2016).

Of course, the Covid-19 pandemic has hastened or deepened the impact of some of those changes, as well as bringing about entirely new changes too. The proactive management of human capital therefore becomes even more urgent – the sheer scale of the disruption will result in new OSH risks and opportunities, and a greater need to develop transferrable skills.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

The post-Covid working world will create as many occupational challenges as opportunities.

At a broad level, contemporary factors like greater remote or flexible working, increases in job displacement and automation, and more e-commerce and platform work (McKinsey Global Institute, 2021; Tamers, et al., 2020) are likely to result in as many occupational challenges as opportunities. These megatrends will not benefit or disadvantage workers equally – those who are already most vulnerable to occupational risks (i.e., of poor physical and mental wellbeing, job insecurity, lack of career prospects and so on) will simultaneously be the ones least able to adapt to changes taking place in the world of work.

Indeed, it’s been suggested recently (McKinsey Global Institute, 2021) that many low-skilled workers, particularly those in declining occupations, will have to change occupation to remain in employment. And higher-skilled workers will also be susceptible to adverse impacts of change, despite their greater relative job security, particularly in terms of anxiety, isolation, and a loss of belonging that will come with wholesale changes to the very concept of the workplace itself.

New ways of working mean new risks to navigate and new soft skills to foster.

Responsibility will therefore fall upon policymakers, employers, and practitioners to overcome the significant challenge of navigating all workers through these times. In the first place, this will involve responding and catering to emerging, multidimensional risks, which will impact individual workers in different ways. Beyond that, and given the transformation to the occupational landscape at large, there will also emerge a more pressing responsibility to equip all workers with the soft skills required to remain and to thrive in work – in particular, social, emotional, and technological skills. Finally, in order to fulfil an organisation’s social obligations, there will be increasing pressure for all actors to work collaboratively in order to ensure the human rights, OSH, and inclusion of workers throughout the supply and value chain.

Fig. 3 Labour market megatrends – the complexities of a changing labour market.

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It’s important that workers are recognised as material to organisational success and sustainability.

Consistent ways of reporting the business impact of Covid-19 in particular would be useful.

Given the Covid-19 pandemic is likely to have many repercussions on organisations’ operations, an integrated report drawing together all organisational activities would appear to be a particularly useful tool to represent business-level consequences of the pandemic (García-Sánchez, et al, 2020).

The most valuable learning from the pandemic? A workforce rises when it has agency and choice.

The pandemic has taught us that potential comes to fuller fruition when workers are allowed to take more initiative, leading to the hypothesis that “empowering workers with agency and choice over what work they do creates more value than overly prescriptive approaches” (Deloitte, 2021).

It’s time to put workers before work.

IOSH advocates for a transparent, human-centred approach that properly values the role of OSH in developing and protecting human and relationship capital. It’s important that workers are recognised as material to organisational success and sustainability, and positioned at the heart of the agenda, and that this is reflected in national and corporate reporting.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

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Immediatecommunity

Home

Widersociety

Family & friendshipnetwork

Individualworker

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

2.2 Human capital means something very different to workers – and their families and communities.

In the same way that an organisation’s plant and equipment are assets in which investments are made, workers can (and should) be considered assets too. Investments in training, and the development and protection of workers can lead to worthwhile returns for organisations in the same way that investments in equipment would (Baron & Armstrong, 2007). However, the way that an organisation regards its human capital as a value-generating asset is different to the way that workers themselves perceive it.

It’s important to respect the difference between human capital as an organisational resource that can be harnessed, and as a personal reserve that should be protected and developed. In terms of OSH, while organisational investment in human capital might be regarded as being key to productivity and the creation of long-term value, for workers themselves it’s a fundamental element of their life in and away from work.

Under-investment in human capital at work can lead to health and wellbeing risks at home.

Where workers experience a lack of human capital development (an absence of investment in training, for example), they’re likely to be less employable, which may result in unemployment and, ultimately, greater health, safety, and wellbeing risks – and not just for themselves, but their family.

The long latency impacts of organisations on workers are increasingly being examined, but it’s clear to IOSH that investment in social sustainability is part of the broader social contract of organisations, allowing them to create value beyond their own immediate boundaries through the nurturing of workers. Not only can social sustainability transmit naturally through supply chain relationships (i.e., from organisation to organisation or from worker to worker), but workers are also free agents in their own right, utilising their human capital elsewhere – in the home, in the community, or in other roles.

An organisation’s OSH culture spreads organically beyond the workplace.

For example, the development of safety, health and wellbeing knowledge within a workforce does not only stand to benefit organisations in their day-to-day operations; it contributes to the lifelong learning of workers themselves, who come to appreciate the principles of living healthily and safely, as well as working in these ways. Transferred organically from workplace to home to community, this knowledge finds new audiences who also benefit from it. All types of workers are potential beneficiaries of an organisation’s OSH culture, regardless of their formal employment status or the nature of their affiliation. Whether it’s directly in the form of workplace protection or indirectly in the form of enhanced knowledge and skills, contractors, casual workers, and platform workers etc, benefit from a progressive OSH framework in many of the same ways as permanent employees.

Fig. 4 Socially sustainable OSH practices send influential waves into the world.

Progressive OSH principles widen an organisation’s impact.

Organisations should be aware of the fact that the values, beliefs and behaviours that contribute to its culture (SHRM, 2017) – either intentionally or unintentionally – are inevitably transferred beyond its boundaries. Rather than seeing this spill over effect as another dimension of risk to be managed, organisations should see that investment in workers is simultaneously – and at no extra cost – an opportunity to have a positive impact much further afield. Such a progressive view underscores the broader idea that the provision of OSH education in any setting contributes to safer and healthier future generations of workers.

In support of this approach, IOSH developed the Managing Occupational Health and Wellbeing training programme to help businesses understand and manage the myriad of factors that need to be satisfied for a person to be well – and thus engaged and productive – so that they are supported to work and can perform well and safely at work, and send positive waves into their wider communities.

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Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

2.3 Integrated data-driven reporting must reflect the workplace experience of individual workers and worker groups.

Earlier on, we outlined the growing demand among standard-setters and investors for better quality social sustainability disclosures. Developing the capacity to gather informative and meaningful social sustainability data will enable organisations to meet this demand, quantifying how workers contribute to overall value and, in turn, what impact the organisation has on those workers.

From an OSH perspective, this sort of information will be vital in areas such as identifying where improvements can be made to OSH outcomes, informing decision-making, and supporting the UN SDGs. While gathering social sustainability data might be perceived as time-consuming or source-intensive by some, particularly so in smaller organisations where capacity is limited, greater knowledge of the fundamental benefits of data and data analysis will help to guide practitioners, not only in meeting the growing demand for data-driven disclosures, but also by illuminating gaps, micro risks, and opportunities present within a workforce.

Meaningful social sustainability reporting combines OSH-specific data, business data and external data.

In isolation, the most commonly gathered OSH data has historically been unable to sufficiently identify the causal factors of safety and health outcomes (Pawłowska, 2015), hence the prolonged call for more predictive indicators. It’s telling that, according to James Pomeroy, “many of the factors that are potentially influencing performance are non-OSH information and much of this data is stored in different business systems or external sources” (Pomeroy, 2019). His point? A carefully selected combination of OSH-specific data, business data (i.e., working hours, HR demographics etc), and external data (i.e., time, geospatial information, public health etc) holds the key to understanding both overall performance and individual worker risk.

Data gathering needs to reflect the diversity of the modern workforce.

The importance of understanding and managing OSH risks on a worker-to-worker basis – or, conversely, maximising OSH opportunities – can’t be overstated. Academic research has been useful in highlighting where certain differences in OSH risks and outcomes are driven by any number of circumstantial factors (see Table 1). Such insight only serves to underline how the diversity of modern workforces should be accounted for, so that an “equitable distribution of OSH benefits and risks” can be ensured for all (Tamers, et al., 2020).

Table 1: Different OSH risk and outcomes by worker characteristics.

Researchers Findings

Campos-Serna, et al., 2013

The Spanish study found that employed women experienced more job insecurity, lower control, worse contractual working conditions and poorer self-perceived physical and mental health than men. Men had a higher degree of physically demanding work but showed a higher level of effort-reward imbalance.

Marinaccio, et al., 2013

In a survey of workplace stress variables, a team of Italian researchers found higher risk among female workers, those of older age, those with less job seniority, workers with lower educational level and those who commuted.

Seabury, et al., 2017

The US study found that non-Hispanic white workers consistently had the lowest risk of workplace injury, while black and Hispanic workers were more likely to experience a work-related disability. Asian workers had comparatively low workplace injury risk but higher-than expected prevalence of disability due to workplace injuries.

EU-OSHA, 2021

The discussion paper argued that, among workers with equal occupational characteristics, the prevalence of high Covid-19 exposure risk is greater among migrant workers than among native workers. Migrant workers were also found to be susceptible to the combination of high Covid-19 and MSD exposure risks.

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Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

2.4 Integrated thinking and decent work.

Alongside enhanced data gathering, OSH can drive the development of social sustainability by broadening its horizons to acknowledge all aspects of decent work in its scope. Defined as “decent and productive work in conditions of freedom, equity, security and human dignity” (ILO, 2013), it’s easy to see how OSH can be influential in the pursuit of decent work for all.

In terms of productivity, for example, organisations that protect and promote the health, safety and wellbeing of their workforce are likely to be more productive, innovative and competitive than those that do not. The wider benefits for society are sustained, inclusive and sustainable economic growth, with higher levels of productive employment. And, at an individual level, employees are more likely to call for higher wages in work environments where they are safe from physical harm or intimidation.

In many ways, the mission of decent work provides OSH with a platform upon which to enhance its standing, especially given the prominence it has among the UN SDGs. Traditional approaches to OSH are therefore as relevant as ever and the importance of the local practitioner as a source of information and expertise will be vital (ESG Working Group, 2021).

Multidisciplinary integration within organisations is critical to the decent work mission.

However, while there are many aspects of decent work that fall within the remit of OSH, certain elements are beyond the gift of the OSH function to provide in its current form. It’s therefore important to establish a working framework for greater collaboration and multidisciplinary integration between functions within an organisation. In practical terms, this requires the sort of integrated thinking that can easily be hindered by siloed working, internal struggles, and even active resistance (Ol & Rommerskirchen, 2018).

IOSH calls for all work to be ‘good work’ and to be safe, healthy and supportive. We promote the right for workers to go home safe and healthy as a basic and fundamental freedom, together with the right to refuse dangerous work. Workplace incidents resulting in death, injuries and diseases still continue globally.

We all have a part to play to reduce occupational accidents and diseases.

As an OSH professional, we have a central role within organisations to provide advice, guidance and support to employers and other stakeholders on good occupational health and safety principles, practice and management systems. Which in turn helps tackle the global challenges of occupational accidents, ill health and diseases and also supports targets aligned to the UN SDGs and UN Global Compact Ten Principles.

As OSH professionals, we’re all therefore already doing this! To further aid or enhance integration and embedding of OSH within an organisation it is important we consider our supply chain, collaborate across disciplines, integrate OSH into core business, and consider our measures to demonstrate the value of good OSH and the materiality of workers.

To summarise, it’s keep doing what we are doing and looking for areas of improvement.

Ruth Wilkinson, Head of Health and Safety

3 OSH, social sustainability and organisations

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Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

3.1 Making the business case for social sustainability.

Alongside the broader benefits on offer, a compelling business case exists for organisations to engage in sustainability. Improved reputation and image, competitiveness, cost-reductions, employee motivation, and general working life quality have all been cited (Ching, et al., 2017; Tamers, et al., 2020). Within this, good social sustainability management is associated positively with an organisation’s overall value (Shivaani & Agarwal, 2020), suggesting as a matter of course that investments in OSH are ultimately likely to be value-generating in the long term.

Studies indicate long-term value is created for all stakeholders – including society at large.

The question of whom value is created for doesn’t necessarily lead to a simple response. According to a Deloitte survey of listed Dutch organisations, three quarters of respondents suggested that long-term organisational value was created for all stakeholders (including company employees, customers, or even broader society), while only one in ten suggested that efforts were driven to create shareholder value alone (Valkering & Brouns, 2017).

The tension between labour productivity and human impact will always be there.

For as long as organisations remain commercial enterprises, above all else, they will have to keep managing the fine balance that exists between labour productivity and value creation on the one hand, and human and environmental impacts on the other.

In general terms, the impact of labour productivity on health is thought to be positive where adequate working conditions are present (Urtasun & Nuñez, 2018), as workers are productive when they are happy, and happy when they are productive (Isham, et al., 2021). However, when those conditions are inadequate (i.e., working hours are too long or the work environment is unfit) those positive impacts are lost. Equally, when organisations pursue higher labour productivity at all costs, this will lead to a reduction in wellbeing.

While it might require a change of business model, organisations should therefore consider becoming more balanced in their approach to productivity, to maintain the relationship between financial and human capital. Gains made from increased labour productivity could be reinvested in interventions that actively support wellbeing and sustainable lifestyles – rather than simply pursuing further productivity growth.

Well-meaning interventions can actually negatively impact on wellbeing.

Interestingly, certain interventions that aim towards increasing productivity and wellbeing could well facilitate a reduction in both when utilised unsustainably. For example, improved ICT within an organisation might in the first instance increase productivity and improve staff wellbeing because it increases the ease of communication between individuals and allows for flexible working – factors that are welcomed. Yet, it may also create a culture in which workers are then expected to be constantly available, which may lead to greater work/life conflict and work-related stress. In fact, when considering the matter holistically, those initial improvements in worker wellbeing from upgraded ICT could be achievable with less culturally impactful interventions.

Good social sustainability management is associated positively with an organisation’s overall value.

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It will fall upon leaders and advocates in the field to demonstrate that the pivotal contribution of worker safety, health and wellbeing to long-term value is worthy of greater investment.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

3.2 The organisational perspective: radical transformation may be required.

Given everything we’ve explored in this paper thus far, satisfactorily meeting the social sustainability demands of investors, regulators, the public and so on might ultimately require organisations to fundamentally shift their business purpose. In the perfect scenario, they would transform from inside-out organisations, which continue to focus primarily on creating shareholder value whilst making incremental improvements to their overall footprint, to outside-in organisations where focus is primarily on finding ways to create a significant positive impact for society and the planet, while still offering economic value to shareholders in the process (Dyllick & Muff, 2016).

Progressive businesses will lead the way, giving confidence in the business case for transformation.

Whether or not transformations of this magnitude take place, there’s no doubt that the remit of the OSH profession will continue to broaden as the scrutiny of organisations intensifies. Of course, it will fall upon leaders and advocates in the field to demonstrate that the pivotal contribution of worker safety, health and wellbeing to long-term value is worthy of greater investment.

In a transformed organisation, the primary strategic focus of OSH shifts towards creating positive impacts.

It might be unrealistic for all organisations to transform so drastically, given the scale of the aspiration and the operational change it requires. However, the model at least provides a useful vision of an organisation in which people and environment are meaningfully put front and centre. In such a scenario, the role of OSH would naturally become both a foundational and an expanded function, not least because its primary strategic focus would be the creation of positive impacts within and beyond the organisation, not just the prevention of negative impacts.

There’s something of a chicken and egg conundrum here. Demonstrating the contribution of OSH to the organisation requires gathering the sort of data capable of illuminating key aspects of OSH performance as part of a compelling narrative. However, this is only likely to happen where those driving reporting requirements are in agreement about the insight that is needed, and where OSH practitioners (and their counterparts in HR, finance and so on) possess the enhanced knowledge and skillset needed to facilitate it.

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While recognising the many initiatives and progress made, IOSH flagged up the reported problems of lack of awareness, capacity, national action plans, regulation and governance. We advocated that capacity-building for decision-makers should include requirements for human and labour rights training for all those involved in investment, governance and stewardship.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

3.3 The practitioner perspective: in the short term at least, change may need to be self-driven.

Regardless of their experience, expertise, or capacity, the contribution of the OSH practitioner to the development of social sustainability will be significant, given they interact uniquely with workers and work, in a way that few others do. Those in large, well-resourced and mature organisations will of course have different motivations than their counterparts in SMEs further down the supply chain; however, the core principles of all practitioners (i.e., local health and safety law, risk management, incident management and so on) remain as relevant as ever, even if their scope is being gradually broadened by technological advances and changes to the very organisation of work.

Over time, formal enhancements to the role will be made which recognise the additional skills and competencies that practitioners require, and these enhancements will eventually be reflected in the evolving suite of OSH education on offer (Felknor, et al., 2020). However, in the interim, the development of the role may have to happen independently, in some cases driven by practitioners themselves, perhaps without the full support or resource of a host organisation.

As curators and stewards of social sustainability, especially at a time when there is keen interest in the subject, OSH practitioners will undoubtedly be served well by upskilling themselves in critical and systems thinking, emotional intelligence, collaboration and so on. These are all likely to be necessary when identifying, managing, and reporting on complex OSH outcomes.

Factors influencing worker health and wellbeing now go beyond traditional occupational safety and health (OSH) hazardous exposures and include changing demographic profiles (e.g., aging workers), greater burden of chronic disease, varying employment arrangements including informal work with little to no protections, shifts in work organisation, increased psychosocial stressors, and the role of technology and related intensification of work demands. These combine with individual health and lifestyle and factors in the home, community, and general society to affect worker health and wellbeing (Felknor, et al., 2020).

Beyond this, there’s no denying that technology provides unrivalled opportunities for OSH management. For example, wearable, implantable or placeable sensors capable of generating continuous streams of data, tracking performance, and recognising hazards early are increasingly available and affordable (Tamers, et al., 2020). Investment in OSH analytics software and mobile applications has increased substantially since the outbreak of the Covid-19 pandemic, for example (Verdantix, 2021). However, while data is potentially transformative in its ability to drive equitable and tailored OSH responses, it will be vital for practitioners to develop the analytic skills necessary to work with it.

This is why IOSH advocates improved multidisciplinary working to ensure safe and healthy AI-enabled applications in the workplace, involving OSH professionals, human resources professionals, designers, employers and employees.

OSH practitioners can lead the charge for OSH as a fundamental right.

Finally, where practitioners and advocates begin to advocate for OSH as a fundamental right in large numbers, their championing of it – especially in everyday working spaces – will help to nurture universal competence of occupational safety and health among all workers. In terms of valuing humanity, this competence among workforces will be as indicative a measure as any.

Every worker, everywhere, has the right to OSH.

IOSH has long advocated for OSH to be recognised as a fundamental right for all workers across the world, most recently contributing to the UN Working Group on Business and Human Rights (UNWG) global project, ‘Business and human rights: towards a decade of global implementation’. We promoted ‘beyond compliance’ on sustainability and corporate reporting, with workers recognised as ‘material’ to national and corporate success. We recommended that the next decade should embed the social elements of sustainability, requiring decent work; effective OSH management; and the prevention of modern slavery and protection for those in the informal economy.

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Responding to the social sustainability challenge as an OSH practitioner will require growth in the role.

Introduction

1. An introduction to sustainability and human capital

2. Putting people first

3. OSH, social sustainability and organisations

Glossary

References

3.4 Conclusion: Current human capital challenge.

The language of social sustainability and human capital can seem detached from the everyday language of the OSH practitioner. However, the occupational health, safety and wellbeing of workers is a fundamental driver of social sustainability – within and beyond organisations. Furthermore, it will play a vital role in the creation of truly sustainable organisations in the future. After all, the intangibles that are currently of such importance to policymakers, standard setters, and investors (i.e., workplace skills, competencies, diversity and so on) are stimulated in healthy, safe and motivated and engaged workforces.

On the one hand, the global interest in sustainability provides a huge opportunity to cement the position of OSH as a foundation stone of social sustainability. On the other, there is an equally significant opportunity at the practitioner level to expand the reach of OSH within organisations, through supply chains and among communities. However, this will happen only if the challenge is taken up to look beyond traditional boundaries of OSH in order to see how far its impact extends – or could extend. In short, responding to the social sustainability challenge as an OSH practitioner will require growth in the role.

The demand for agreement over what and how best to measure OSH as an aspect of social sustainability is a valid and pressing concern, and the opportunity mentioned above won’t arrive without this agreement.

However, any high-level, international agreement on standards and codes that can inform practitioners what model to follow, needs to take place alongside a deeper knowledge of what social sustainability is, how it’s managed, who is responsible for it, how it contributes to organisational value, and how it is impacted in turn by organisations.

Equipped with this knowledge, the idea of social sustainability will hopefully be transformed from an abstract idea into a strategic one. OSH practitioners will be increasingly well placed to ask the right questions of their own organisations, to explore the subtler links that emerge subtly over time between workers and particular OSH outcomes, to source the sort of data capable of highlighting changes in those outcomes, to work in partnership and collaborations with other teams, functions and organisations in order to combine these efforts into long-term strategies, and to communicate all of this clearly and meaningfully.

The big disconnect that exists between high-level social sustainability and worker-level OSH is not easily or quickly resolved. Nevertheless, one of the first moves needed towards it is to develop widespread competence within organisations, among practitioners and among workers themselves that the safety, health, and wellbeing of any individual has a unique and ever-changing value. Knowing how to truly understand, manage, or develop that value will duly follow.

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Glossary

Asset A type of resource, tangible or intangible, from which firms can potentially derive competitive advantage (Fulmer & Ployhart, 2014).

Assurance Service (generally independent) used to improve the quality or context of information being gathered for decision makers (Deloitte, 2021).

Comply or explain A reporting practice whereby companies are asked to either comply fully with a given code or clearly and meaningfully explain their reason(s) for not doing so.

Common good That which benefits society and the planet as a whole (Dyllick & Muff, 2016).

Decent work Decent and productive work in conditions of freedom, equity, security and human dignity (ILO, 2013).

Decision-useful Relevant, accurate, comparable and timely information that is capable of informing the decision making of different stakeholders.

Declining occupations Work roles that are increasingly displaced by new technologies, including those such data entry clerks, administrative secretaries, assembly and factory workers etc (WEF, 2020).

Diversity A set of conscious practices that involve understanding and appreciating the interdependence of humanity, cultures, and the natural environment; practicing mutual respect for qualities and experiences that are different from our own; recognising that personal, cultural, and institutionalised discrimination creates and sustains privileges for some while creating and sustaining disadvantages for others (Patrick & Kumar, 2012).

Emotional intelligence The ability to recognise, understand and manage one’s own and others’ emotional states.

Environmental, social, governance (ESG)

Criteria for evaluating organisations used by those looking for socially responsible investment.

Human capital A particular set of acquired human capabilities. These generally are taken to be durable traits, persisting over some significant portion of the life of the person who acquires them, and yielding some positive effects upon the person’s performance in one or more among a wide variety of socially valued activities (David & Lopez, 2001).

Human-centred A design approach that focuses primarily on user needs and requirements and applies human factors/ergonomics etc. This approach enhances effectiveness and efficiency, improves human wellbeing, user satisfaction, accessibility and sustainability; and counteracts possible adverse effects of use on human health, safety and performance (ISO, 2010).

Impact Positive or negative social, environmental, or economic changes resulting from business activities.

Indicators Quantifiable metrics that enable evaluation of efficiency and effectiveness of business process (del-Río-Ortega, et al., 2013).

Intangible An identifiable but non-monetary asset without physical substance (IFRS, 2021).

Integrated report A concise and reliable communication which combines information about how an organisation’s strategy, governance, performance and prospects lead to the creation of value (ACCA, 2021).

Integrated thinking Working in a way that enables “interconnected information across multiple capitals, including natural, social and relationship, human, manufactured and intellectual.” (Value Reporting Foundation, 2021).

Lifelong learning The continuous building of skills in formal, non-formal and informal environments, which takes place throughout life and in various settings (i.e., school, the workplace, home and the community).

Long-term value The ability to align financial value creation with social and environmental value generation in a way that encourages future competitiveness and earning capacity (Kurznack, et al., 2021).

Manufactured capital “Material goods or fixed assets which contribute to the production process rather than being the output itself” (Forum for the Future, 2021).

Materiality The principle that determines which of an organisation’s impacts on the economy, the environment and/or society are sufficiently important that it is essential to report on them (GRI, 2016).

Natural Capital Any stock or flow of energy and material that produces goods and services (Forum for the Future, 2021).

Non-Financial Disclosure Information provided on areas of an organisation’s performance that extent beyond that which is used for developing financial statements. This could include information on intellectual and human capital, environment etc (Erkens, et al., 2015).

Predictive (or leading) indicators

Measures of activities or processes that have a significant effect on future performance, which are causal roots of the outcomes they ultimately influence (Badawy, et al., 2016).

Productivity Expressed either mathematically or narratively, best thought of as the ratio of inputs to production to the production outputs resulting from it.

Reporting Provisions Any requirement or guidance (either voluntary and mandatory) issued by a government, regulator, stock exchange etc, which outlines what organisations should or must report on.

Social contract A set of socially established norms determining what behaviour is and is not acceptable for businesses to engage in. These may exist in the form of formal standards against which companies can easily be measured (Kirkup, 2020).

Social capital Value derived from the links, shared values and understandings that enable individuals and groups to trust each other and work together (OECD, 2007).

Social Sustainability Identifying and managing the impacts an organisation has, both positive and negative, on people within and beyond it.

Socio-emotional skills A number of non-cognitive competencies (i.e., perseverance, sociability, self-esteem) which may help to improve health-related outcomes and subjective wellbeing (OECD, 2015).

Soft skills Set of personal and social competencies which are transferrable to many roles and tasks.

Sustainability reporting The key platform for communicating about an organisation’s non-financial (i.e., environmental and social) performance and impacts.

Stakeholder engagement The ongoing process of identifying to whom an organisation is responsible, and determining how far that obligation extends, with the intention of achieving objectives such as consent, control, co-operation, accountability and involvement (O’Riordan & Fairbass, 2014).

Virtuous (business) Characterised by having high integrity, a striving for excellence in their provision of products and services to consumers, in addition to excellence in business leadership and management practices, a culture of open communication, cooperation and collaboration, and a system of measurement and accountability throughout the organisation (Hein & Wilkinson, 2015).

Workplace wellbeing A positive subjective state which is contributed to by any number of factors including physical health, psychological and emotional safety, economic security and so on.

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