LEADERSHIP – THE BUSINESS CASE FOR HEALTH & SAFETY

LEADERSHIP –

THE BUSINESS CASE FOR HEALTH & SAFETY

LEADERSHIP –

THE BUSINESS CASE FOR HEALTH & SAFETY

XVIII World Congress on Safety and Health at Work

May 29 – July 2, 2008

Seoul, Korea

XVIII World Congress on Safety and Health at Work

May 29 – July 2, 2008

Seoul, Korea

Maureen Shaw, President and CEOIndustrial Accident Prevention Association (IAPA)July 1, 2008

Leadership – The Business Case for Health & SafetyXVIII World Congress on Safety and Health at WorkSeoul, Korea - July 1, 2008Maureen Shaw, President and CEO, IAPA

We know that health, safety,

and environmental programming

is a corporate economic imperative.

Increasingly, so does the business community.

Leadership – The Business Case for Health & Safety

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IAPA Vision

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A world where risks are controlled

because everyone believes suffering and loss are morally, socially, and

economically unacceptable.


Why Do Businesses Invest?

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Global– The ILO estimates annual global losses

in gross domestic product (GDP) due to workplace illness, injury, and death at $1.25 trillion (US$1,250,000 million), or

4% of annual global GDP


Why Do Businesses Invest? (cont’d)

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Canada– Absence due to employee illness and disability costs Canadian companies CDN$16 billion annually

– Lost productivity due to mental illness costs Canadian companies CDN$11 billion annually


Signs that the business community is recognizing health, safety, and the environment (HSE) as a business imperative:– CEOs are taking on HSE as a measure of their own

performance– Businesses are publishing their HSE results– Financial analysts are watching– Investors are acting– The media are reporting– Regulatory penalties and civil awards are growing

Health, Safety, and Environment – A Business Imperative

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Health and Safety Continuum of Business Advantage

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Satisfied to do the minimumrequired to

comply with law/regulation

See HSW excellence as a

business advantage

Want to build and sustain their HSW program

• Adherence to laws/regulations

• Avoid penalties/fines

• Reduce premiums

• Decrease injury costs

• Lower injury rates

• Increase share price

• Preserve or increase brand value



South Africa

Anglo American offers free antiretroviral treatment to HIV+ employees at an annual cost per employee that exceeds annual income of most black workers

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Canada

DaimlerChrysler plant introduces a program to improve employees’ cardiovascular health:– Half lose an average of 16 lbs (7 kilos)

– 1/3 smokers stop

– Overall risk of heart diseases goes from medium to low

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The bottom line.

What is the Connection?

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Bottom Line Results

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Anglo American– Cost of treatments are more than offset by:

• Lower absenteeism

• Reduced health care

• Greater retention of skilled employees

• Improved Productivity


Bottom Line Results (cont’d)

DaimlerChryslerIf this program were expanded to all Canadian plants, the company would save CDN$2M over a 10 year period

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Financial Returns

Over 60% of CFOs recently surveyed by Liberty Mutual said that each $1 invested in injury prevention generated returns of $2 or more

The US OSHA asserts that companies implementing effective safety and health programs can reduce injury and illness rates by 20% or more, and generate a return of $4 to $6 for every $1

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Alcan : EHS First program IAPA Safety Groups Sears Roebuck

Stories from the Business Community

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Alcan

In 2005, Alcan’s environment, health, and safety management system – EHS FIRST – delivered US$43 million in benefits, mostly from safety.

IAPA Leadership

ForumApril 2007


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IAPA Safety Group

IAPA brings participating companies together, facilitates exchanges of expertise and ideas, and offers one-on-one assistance as needed

Membership has increased by 528% since its formation – from 121 firms in 2004 to 760 firms in 2008

In 2006, there were 548 companies involved. They achieved a 32.67% reduction in lost-time injury rates and more than CDN$3M in a collective rebate

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“Since joining IAPA’s Safety Group, our incident and accident rates have dropped tremendously and our return-to-work program has been a great success.”

Egan and Team Board

IAPA Safety Group (cont’d)

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The Service Profit Chain

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Employee Satisfaction

(+ 5%)

The Bottom Line

(+ 0.5%)

Customer Loyalty

(+ 1.3%)

Source: Harvard Business Review, Jan/Feb, 1998

ManagerAccountability

4% improvement in 1997

= $200 Million



Additional Gains

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Greater productivity and reliability New competencies Enhanced organization capacity Better employee relations More public trust


Creating the Right Culture Setting your own standards and

expectations Establishing an HSE management system Integrate HSE into operations Train employees Integrate HSE into supply chain

management Look beyond financial returns

Common Success Factors

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A 2007 survey of top executives around the world found that 9 out of 10 respondents are incorporating environmental, social and governance issues into their firm’s core strategy more than they were five years ago.

Call to Action

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One voice is a single person. Many voices are a movement. One voice is a single person. Many voices are a movement.


Thank You

For a copy of this presentation, speaking notes and/or the paper on “The Business

Case for Health and Safety” Go to:

www.iapa.ca

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LEADERSHIP – THE BUSINESS CASE FOR HEALTH & SAFETY

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