Impact of Disruptive Business Changes on EHS Profession
Twenty first century heralded an era of disruptive changes and it is likely to continue in 2018 and onwards. The political, economic, technological and social scenario is undergoing a massive change that is impacting almost all of us irrespective of our professional fields. Let us look at some of the changes around and risks and opportunities that they create for EHS professionals.
Political Changes – The world changed from Bipolar world during the Cold War between the Western Bloc (or NATO Allies) to Eastern Bloc (or Warsaw Pact Allies) from 1940s to 1991 to Unipolar World for the next decade to yet again a Bipolar World with two countries in different parts of the world still fighting to prove their supremacy militarily and economically. EHS jobs in this background grew substantially from late 1980s to 1990 riding over the growing oil economies and concerns over tragedies like Bhopal Gas Tragedy in 1984 and Chernobyl Nuclear Accident in 1986. International efforts were reflected in UN Conference on Human Environment and Development at Stockhold in 1972, Establishment of OSHA in 1971, Brundtland Commission Report in 1987 and Environment Protection Act (of India) 1986. Eastern Bloc also had its own set of regulations like General Safety Regulations for Atomic Power Plants During Design, Construction, and Operations from USSR in 1973. While most of the accidents mentioned above took place in Eastern Bloc or Non-Aligned Movement (NAM) countries, most of the opportunities came for EHS professionals in the erstwhile Western and Middle East countries. The next almost two decades from 1990 to 2010 saw the continued increase in opportunities for EHS professionals till it was shake by US economic slow down in 2008. It adversely affected the job market for EHS professionals not only in US but also Europe. However, there was a silver lining that EHS jobs increased in countries like India and China and also with new regulations and increase in the enforcement levels. However, this growth of EHS jobs started plateauing in these countries within next seven to eight years. The crux in the above is reduced timelines of transition from 30 years since the second World War to next 20 years to next 10 years to 7 or 8 years. Also, the other crux is the transition in the geographical locations of the EHS job creation. Hence, EHS professionals have to be prepared for greater and faster mobility and need to learn about new geographies and bear social and family impacts due to the same.
Economic Changes – According to Mark J. Perry, a scholar at AEI and a professor of economics and finance, nearly 9 of every 10 Fortune 500 companies in 1955 are gone, merged, or contracted. It’s reasonable to assume that when the Fortune 500 list is released 60 years from now in 2077, almost all of today’s Fortune 500 companies will no longer exist. According to a 2016 report by Innosight (“Corporate Longevity: Turbulence Ahead for Large Organizations“) corporations in the S&P 500 Index in 1965 stayed in the index for an average of 33 years. By 1990, average tenure in the S&P 500 had narrowed to 20 years and is now forecast to shrink to 14 years by 2026. According to McKinsey & Co. MD, Dominic Barton, the above average tenure stood at 18 years in 2016. The learning is that irrespective of adjustment of EHS professionals to the needs and expectations of our organizations’ management in terms of competence and values, the organization itself may not be present to support EHS and acclimatization. This provides a reason for EHS professionals to take a strong stand honest to their profession and professional colleagues.
At regional and local level, countries like UK have been dislocated from the pedestal of top 5 economies of the world. Countries like India and China have found place in the top 7 economies. Also, growth is shifting from metros to Tier II and II cities. According to an EY report points out that 26.4 trillion of household income in India is concentrated in tier II-III markets as opposed to 800bn in India’s big 8 metro. This means that as the industries move from one country to another and metros to Tier II and Tier III cities, there would be a large amount of relocation required of workforce including that of EHS professionals. This may also mean creation of EHS job opportunities in Tier II and Tier III cities. It will be a challenge for EHS professionals used to the first world countries and major metros to either shift the profession or move to Tier II and Tier III cities.
Technological Changes – The speed of technological change is unimaginable. In 2009, two years after the iPhone’s launch, developers had created around 150,000 applications. As we struggle with some of the challenges across the world related to Road Safety and Climate Change, Artificial Intelligence is changing the entire landscape with concepts like Self Driving cars. Germany has drafted the world’s first set of ethical guidelines for self-driving car programming. Hence, by the time EHS professionals train drivers in developing countries regarding Wearing Seat Belt and Lane Driving, the vehicles as they exist today may have become obsolete.
Similarly, as we struggle with issues like Air pollution and Green House Gas emissions from automobiles and manufacturing, the reduced growth rate, fuel and technological changes may make the subjects obsolete. Hence, investments in Euro IV and similar norms in future may or may not by justified. This would also determine what EHS professionals do and what they research upon. Also, it is important for EHS professionals to look for avenues in newer sectors and also reduce the cycle time for both development and execution exponentially.
However, given the advent of virtual cars and changes in technology that may change the way we live and construct our buildings, EHS professionals may be outpaced in their efforts by technological changes in these sectors. While we move towards automation, very few of the courses on EHS cover hazard and risks of robots/ automated machines.
Challenges – Some of the biggest risks facing the profession are lack of speed in changing policies, administration and learning in the field.
Policy frameworks have become more active and stringent across most of the geographies. However, many of these these changes are following the current policy frameworks that exist in the first world countries and based on past statistics. This is true both at the Government level and at the company level. For example, there are still countries across the world still do not have formal environmental regulations. Also, in many of the first world countries, it takes years to formalize the regulations in line with the economic direction being taken by the world. A classic example of long times being taken to finalize the policies is the backing out of US from Paris Convention on Climate Change. In countries like India, while on one hand, companies are doing trial runs of driver-less cars and moving towards electronic cars, we are spending times in court on fighting cases banning diesel vehicles. Similarly, the speed at which EHS Policies are being framed and reviewed at the company level in most of the organizations including those in the current list of Fortune 500 companies also leave a lot to desire. For example, in many of these companies, Product Stewardship and EHS teams are separate and there is no integration of EHS factors at the design stage and even the implementation and auditing teams are separate.
Administration – Although the speed and effectiveness of implementation of EHS laws has improved in countries like China and India, still there are gaping holes due to different reasons. At the national levels, frequent changes in the political situations from countries ranging from US to UK to India also make a dramatic change in the administrative set ups and also the direction that they are taking leading to a lot of wastage of time increasing the time gap between technological and economic development and administrative framework to support them.
The administration of not only the Government set up but also the speed and effectiveness of projects being implemented by multilateral organizations driving Environment and Safety like United Nations Environmental Program (UNEP), World Bank, etc provide a huge stress on resources and not enough to match the macro-economic scenario explained above.
The organizational structures, the communication barriers and speed of decision at the company level indicate a need to exponentially enhance the speed and have breakthrough changes in the way they are being administered. An example of this is that still almost half the organizations have planned their transition from ISO 14001: 2004 to ISO 14001:2015 version in the last one year provided ie till 15 Sep 2018.
Learning – The speed of learning of EHS professionals is another limiting factor in matching the above scenario. Curriculum in many of the countries are drafted based on learning of more than one to two decades. Further, most of the EHS professionals do not follow a Continuous Professional Development (CPD) path and there are no drivers to push that. Even in countries that mandate CPD for career growth, the methodology and effectiveness of learning from these courses leaves a lot to desire. Based on my personal interactions with over 100 EHS professionals, almost 30% were not aware of the upcoming ISO 45001 for Occupational Health & Safety Management System and more than 70% were not aware of the contents of upcoming standard. Still most of the professionals continue to follow a template or checklist based approach and many of them struggle with anything abstract where they need to relate Environment and/ or Occupational Health & Safety Management System to the overall strategic direction of the business as required by latest version of ISO 14001:2015.
The initiatives like Capability Framework for OHS Professionals under the leadership of International Network of Safety and Health Practitioner Organizations (INSHPO)
Opportunities– While the above changes present a challenge, they also represent opportunities for the overall protection of environment and people. As explained in the above section, shifting of energy sources from non-renewable to renewable presents a significant positive impact. As there are no formal educational barriers to enter this field, many professionals who do not have a formal education in safety and/or environment can enter this field.
Environment and Social Governance (ESG) is being embraced by more and more financial institutions and stock exchanges. Professionals who are willing to learn on these aspects have avenues to learn about them eg on Learning Tools on IFC Web-Sites. This is also increasing the say of EHS in the core business as many loan disbursal and private equity are conditional over compliance of ESG Issues
There are new organizational structures coming up. For example, Institute of Internal Auditors (IIA) that has chapters worldwide has set up EHS Centre in US. There is a huge opportunity for EHS professionals to join such networks and run shoulder to shoulder with their financial counterparts.
Some major economies like India drove spending on CSR including environmental by major corporate. This brings such expenses it in the purview of mandatory financial audits and hence, many Company Secretaries are closely watching this. If EHS professionals can pursue courses like those of IIA or Company Secretaries, they can be a big resource for the organizations.
Movement of growth to Tier II and Tier III cities may reduce the environment and social impact of large scale migration either at the inter-state level or at inter-national level. This would reduce the burden on environment and social issues.
Development of Smart Cities in India and a focus on Clean India is a huge place where EHS professionals can participate if they are able to break mental barriers.
Growth to multiple countries is also an opportunity for EHS professionals to grow if they are flexible with respect to mobility.
Learning more about Artificial Intelligence and use it ethically for the benefit of EHS is another area for learning for many EHS professionals for them to remain relevant.
Learning more about Sustainability Development Goals (SDGs) of 2030 and moving to organizations that are aligning their business to these goals is another method by which EHS professionals do not find themselves in a disappearing company.
Overall, like any other time in history, challenges and opportunities exist for every profession and professional. We have tried to highlight some of them for EHS professionals. Thoughts and comments are welcome and we would be glad to share any additional information for learning that readers may want.