While Environmental Health and Safety (EHS) is a critical focus for many organizations, for manufacturers within high-risk type industries—chemicals, oil and gas, metals, mining, etc.—the stakes get even higher and the challenges perhaps even harder when it comes to EHS. In fact, necessity has made these companies within high-risk, asset-intensive industries early pioneers in EHS management systems and supporting technologies given the hazards inherent in their line of work and the potentially grave consequences of not getting things right. Still, more work lies ahead.
In his latest research report, Peter Bussey, principal analyst at LNS Research, looks at how high-risk industries face the unique EHS challenges and what new opportunities exist for them.
“Our research shows that while high risk industries are advanced in some aspects of EHS management, they also have significant opportunities to take advantage of new approaches, best practices, and technologies to improve performance,” Bussey said. “There are real opportunities for these industries to leverage ongoing Industrial Transformation (IX) initiatives to drive EHS and operational performance improvement.”
According to Bussey, high-risk industrial operations share some common characteristics that impact the scope and intensity of their EHS compliance obligations and operational risk profile—things like managing hazardous materials, heavy regulation, distributed workforces, intense scrutiny of sustainability risks, and potentially major consequences from management system failures, among others.
“This is not to say that other [industrial] sectors don’t have significant EHS requirements, risks, and challenges that must be managed for operational excellence,” Bussey explained. “However, high-risk industries tend to have a broader range of hazards and a more intense risk profile due to the nature of their operations.”
The landscape for high-risk industrial companies only continues to add to these challenges, especially amid a pandemic. While challenges such as supply chain disruption and a growing labor shortage have been issues for many different industries, this only adds more intensity to the impact on EHS. Moreover, COVID-19 has further illuminated the need for workplace safety and increased the focus on regulatory requirements.
So how do manufacturers within high risk, asset-intensive industries handle these growing challenges and ensure optimal EHS objectives are met? LNS Research has identified a number of significant opportunities for these companies to leverage the IX trend to increase EHS capability maturity for improved performance.
Among the recommendations Bussey has for manufacturers in high-risk industries when it comes to EHS opportunities is standardizing business processes. “Our research shows that high-risk industrials reported 21% less enterprise standardization of core EHS business processes compared to the EHS leader group,” he said.
Bussey further suggests that manufacturers should establish an EHS system of record, converge EHS and operations, leverage data analytics for predictive risk management, and perhaps most importantly, “put people at the center” with a connected frontline workforce.