In this in-depth interview series, speakers from Enablon’s offer fresh insights on EHS management, risk and resilience. Carol Singer Neuvelt is the Executive Director at the National Association for Environmental Management, a professional association for environmental, health & safety and sustainability (EHS&S) leaders. Here are NAEM’s insights into the increasing relevance of EHS strategy for C-suite executives, the escalating consumer demand for EHS data, and the revolution in EHS management information systems for companies that want a competitive edge.
Carol, thanks for sharing your research from NAEM. What need does your organization meet in the EHS world?
As the largest professional association for environmental, health & safety and sustainability leaders, NAEM’s mission is to help our members do their jobs better. In doing that, we help companies reduce their environmental footprint, promote safe and healthy workplaces, and advance sustainability globally. We host peer-to-peer conferences, webinars, and conduct benchmarking research that focuses on actionable strategies that empower the corporate EHS&S leaders to make an impact.
So, NAEM has conducted an enormous amount of research into EHS information management systems. What indictors of rising interest in this arena have you noticed in the past 15 years?
Our research reflects the views of our members and what is happening in the real world, and we’ve seen a transformational change in the last 15 years in terms of how data is captured, processed and reported.
Back in 2001 when we first started examining this issue, electronic data management was in its infancy. In those days, we had a Lotus Notes users group and, believe it or not, that was considered a sophisticated system at the time! Back then, EHS data was primarily intended to demonstrate compliance. While many leadership companies published annual environmental reports, those didn’t incorporate the scope and detail of information that would be considered a best practice now.
Today it’s a very different story. Since 2001, we’ve seen an explosion of interest in EHS and sustainability data. The interest in corporate environmental performance goes beyond environmental activists and government regulators and now includes consumers, Wall Street, external ratings firms and even mainstream publishers like Newsweek. These stakeholders are interested in everything from a company’s carbon footprint to how much waste it produces and how it treats its employees.
Is rising customer interest in external reporting changing how companies report their EHS data?
Yes, definitely. The societal push for corporate transparency is transforming the business community. As leadership companies make public commitments to reporting using frameworks such as the Global Reporting Initiative (GRI) and the CDP, and large retailers such as Walmart set new reporting requirements for their vendors, the importance of EHS&S data within those companies is elevated.
In turn, this EHS&S data becomes more relevant throughout the supply chain as the push for reporting ripples through to mid-size and B2B companies. To do this, you need better data, better analytics and, of course, more sophisticated tools. So, we’ve seen tremendous expansion in the offerings available in this market over the past several years.
In my own experience working with clients including Walmart suppliers on reporting and telling their stories, I am familiar with the need for integrating EHS data into sustainability reporting. However, I’m surprised by how many in the C-suite still lack a knowledge base for understanding the relevance of EHS data in reporting.
Indeed! Fortunately, our research shows that EHS metrics are making their way to the very top of organizations. We’ve found that the EHS&S function has grown increasingly strategic over the time I’ve been with the NAEM. When the association started in the 1990s, this was a department with manager-level leaders reporting into the legal, operations or HR functions. Today, most leadership companies have a vice president of EHS.
So, there’s now a greater visibility of EHS metrics at the leadership levels of companies, where it’s more likely to be on the radar of the CEO, if not the board of directors. We’ve documented the importance of EHS concerns in our Green Metrics that Matter research, which looked at what metrics companies are measuring and reported performance indicators.
What are the KPIs that most interest CEOs?
Given the limited number of key performance indicators that are regularly reported to the CEO, our research showed that there are as many as three EHS metrics included. Safety, energy (natural resource usage), and regulatory compliance are among those key metrics regularly reported to senior leadership and that make it to the CEO’s dashboard.
Going back to your comment on Lotus Notes, we’re obviously in a more complex business environment today. How is technology changing to keep pace with this?
The complexity of information management systems has grown commensurate with the higher visibility of the EHS&S function. As the scope of the EHS&S function continues to expand, there has been a progressive push to integrate these concepts into all aspects of a company’s operations.
We know from our EMIS research that companies are using a variety of software tools and approaches to meet the patchwork of business needs, including supply chain and purchasing, regulatory compliance, public relations, reporting, sustainability, pollution prevention, as well as health, safety and security. It’s important to remember that compared with other software segments, use of these systems for EHS data management is still relatively new. And given the complexity, there are opportunities to consolidate and create greater efficiencies.
What have you discovered through your research into how companies are managing this data?
With data coming from so many parts of the business, companies need robust solutions to capture and manage the complex information streams. However, the majority of companies still use a combination of commercial systems, internally developed systems and commonly available tools like Excel.
Companies adopt software systems for different reasons. Yet at its core, we found that companies are mainly seeking software solutions to centralize data collection, drive accountability and manage compliance. In other words, to digitize the foundational aspects of EHS&S management.
Clearly demand for EHS management information systems is poised to increase. What drivers help companies decide what type of solution to implement?
There’s definitely a market need for robust software solutions. However, we’ve learned from what our members say that there is no “one-size-fits all” system. Our research also shows that companies are investing in expansions and enhancements of their current systems. The maturing marketplace will continue to influence changes in software usage, however, companies will likely continue to use of variety of approaches to address a myriad of business objectives.
What can companies do to minimize mistakes and maximize success in selecting their systems?
These systems are huge investments, and implementing a system is a long-term commitment. It’s not so easy to swap them out if you aren’t satisfied with the experience.
We are now beginning to research what drives software satisfaction. What we’ve learned is that satisfaction is not solely based on the software technology. It’s important to have the people and process systems in place. Satisfaction results from the combination of how well the software integrated into the company’s processes, the level of employee training and adoption, and whether the technology facilitated the company’s ability to meet its desired business objectives.
Good to know how more companies can get more satisfaction out of EHS software. Since EHS managers are the ones who are most intimately involved with these systems, do you have any final words of wisdom for them?
Certainly! The work that EHS&S managers undertake to ensure the validity of their information management systems is critical because it leads to the ability of their companies to meet EHS&S goals, as well as other strategic objectives. It’s important to connect with others, and exchange ideas and challenges. Coming together at events like SPF helps raise the bar for both the software providers and companies so that together we can achieve greater impact.
When choosing an EHS management system, there are crucial steps to follow in order to ensure a successful selection. Download NAEM’s report to learn more about best practices for planning, selecting and successfully implementing an EHS software solution.