The impact of health and safety on firm value.
Chris Alderson
CEO Construction Health and Safety New Zealand at Construction Health and Safety NZ (CHASNZ)
This is a call out to my linked in network, in particular those who have an interest in and are potential users of information reported by businesses on health and safety.
As part of my continued studies in this area I would appreciate your indulgence in a completing a short survey which will be used in my current Masters studies under the University of Otago.
The purpose of this study is to examine if financial concepts can be used to represent the nature of firm Health Safety and Wellbeing (HSW) capacity. The study will also consider the effect of such a disclosure on stakeholders such as investors, directors and executives in terms of how financial representation of HSW in the financial statements will encourage healthier and safer workplaces.
Background
As business leaders, directors, investors, and preparers of corporate information we commonly represent the value of our organisations using traditional accounting and business terminology. This information drives the common understanding and concept of current and future value for the firm.?
The business world has struggled to reflect that same value in health, safety and wellbeing in a similar manner. Corporate reporting of HSW has historically been limited to non-financial measures such as injury frequency rates which have proved to be of limited and dubious value. More recently, users of financial data such as investors and analysts are requiring better insight into the capacity a firm has in order to avoid negative HSW outcomes and to enhance human capital.
CSR and ESG reporting has started to drive more definition and standardisation of reported health and safety data, however most global reporting frameworks such as GRI, still default to traditional lag measures of poor safety outcomes rather than requiring evidence of health and safety capability and future focused control environment strength.
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In New Zealand and globally we are starting to see corporates being required to report on safety information through NZX and the IFRS. The reporting requirements however may not be lining up with what investors necessarily are desiring which is information not only about past safety performance but more importantly, future cash flows which may be impacted both positively and negatively by health, safety and wellbeing capability.
What these useful measures may be is the subject of much international research currently. I have attached a short summary work in progress of what some of these measures may look like and how they could be used by boards, investors and operations.
As valued members of my linked in business community I would appreciate your help in furthering my research. If you could spend a few minutes completing this survey that would be appreciated.
Alternative link to survey below:
Transforming Workplace Wellbeing | Wellbeing Architect | People-Centric Leadership Development | Mindfulness Based Resilience Frameworks
1 年Thank you for sharing your insightful research initiative. It's crucial to explore novel ways to integrate health, safety, and wellbeing into financial reporting for a safer workplace.
Co-Founder & MD at Safe365. International award winning Safety, Well-being and Risk Product (SaaS/PaaS)
1 年Love this Chris. We have been on the same journey for 8 years now using lead and lagging data to tell a story about the impact that good safety has on business performance or as I call it 'turning safety language into business language''. Our latest research as seen a major Healthcare provider increase their safety culture by 30%, reduce their harm by 34% over a 2 year period and a net savings of $10m in workers compensation not having to be paid out - straight onto the bottom line for the insurer. The same for a major airport with a 5% increase in safety culture, 26% reduction in harm over 18 months and a key business performance indicator doubling in that time period. It is the work you are doing that will make safety more meaningful as a business discpline - awesome stuff.