How can EHS management help reduce your enterprise risk?€¦ · Is flexible and allows for a customizable approach that is outcome-focused. EY’s methodology EHS and business alignment

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How can EHSmanagement help reduce your enterprise risk?

October 2017

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Cont

ents How can EHS management help reduce your

enterprise risk?

About EY

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How can EHS management help reduce yourenterprise risk?

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Driving value from EHS management systems

Risk and efficiency

Streamlined and interconnected management systems

Companies have been implementing environment, health and safety (EHS) and business risk management systems for decades.

These systems are frequently implemented in isolation so risks and costs are not streamlined (e.g., some areas receive duplicative coverage and other areas none at all).

Leading organizations and standard setters are working to harmonize their systems, as this can eliminate risk gaps and reduce costs.

1 Occupational Health and Safety Assessment Series (OHSAS)2 International Organization for Standardization (ISO)3 The Committee of Sponsoring Organizations of the Treadway Commission (COSO)

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Companies should assess if their EHS management system is still relevant

1. “COSO and WBCSD Sign Memorandum of Understanding,” www.coso.org, 7 April 2017.2. “Evaluation of Corporate Compliance Programs,” U.S. Department of Justice, 8 July 2017.

Externalevents

► The COSO is working with the World Business Council for Sustainable Development (WBCSD) to incorporate EHS matters into COSO’s ERM Framework.1

► ISO 45001 for occupational health and safety (OH&S) was approved as a draft standard.

► U.S. Department of Justice (DOJ) issued guidelines2 on how to evaluate corporate compliance programs (including root cause analysis).

Internalactivities

► Does your EHS management system align with your enterprise risk management (ERM) framework?

► When was the last time you updated your EHS management system? Does it incorporate the newest standards?

► How have you considered and assessed the range of potential EHS risks and exposures?

► What is the EHS performance of your organization, and how do you set targets and measure?

► What is the analysis of your EHS data telling you?

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EHS management systemsA potential opportunity for improvement

3. “Demystifying sustainability risk. Integrating the triple bottom line into an enterprise risk management program,” COSO, May 2013.

► Analyzes EHS management system performance in conjunction with the overall business (not just EHS)

► Leverages our technical, industry and business knowledge to facilitate improvement

► Includes leading-edge standards and trends such as big data

► Is flexible and allows for a customizable approach that is outcome-focused

EY’s methodology

► EHS and business alignment► EHS IT Plan to address rapid data growth► EHS cost tracking► Business case for efficient EHS

processes

Example outcomes

EY is a leader in EHS risk and has worked with COSO to outline how companies can consider these risks.3

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Analyzing EHS from a business perspective

A typical customized workflow focuses on risk, data and cost:

Step Current state Future state Gap assessment Recommendations

Activities ► Establish scope► Identify

stakeholders► Conduct current

state assessment► Develop process

map► Identify EHS

data use► Define and identify

relevant risks andopportunities

► Future state development

► Leading practices► Data analysis► Maturity model► Identify criteria or

future state

► Conduct gap assessment to identify gaps between current state and future state by usingobservation, inquiry,analytics, substantive testing and otherprocedures

► Prioritized list of findings

► Develop recommendations

► Identify potentialimplementation plans for select findings

► Consensus building► Develop potential

road map forimplementationof findings

Examplework product(s)

► Defined current state process map

► Identify risks andopportunities

► Future state analysis, including ERM integrationpoints

► EHS datarecommendations

► Gap assessment with list of findings

► Findings and recommendations report

► Road map

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Prioritizing outcomesRisk,4 data,5 cost

4. “ES-RISK Environmental, health and safety (EHS) and sustainability risk services,” Ernst & Young LLP, 2017.5. “Using data analytics to improve EHS and sustainability performance,” Ernst & Young LLP, 2016.

Risk1. Update EHS management system to keep it in

sync with relevant EHS and ERM requirements and practices so as to reduce gaps that can increase risk.

Data2. Develop EHS data management plan to link

EHS data to the business. This includes developing EHS data management dashboards to enhance decision-making and reduce risk.

Cost3. Update EHS procedures and controls to

facilitate better estimating, tracking and analysis of EHS costs for more informed decision-making and cost control.

Impa

ctLo

wM

ediu

mH

igh

Cost to implement

Low Medium High

Prioritized outcomes ― example heatmap

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Taking it to the next level6

6. “Make money, save money and manage risk,” Ernst & Young LLP, 2017.

Integrating EHS into the business by creating a single source of procedures for company processes can lay the foundation for compliance, consistency and continuous improvement.

The end result can be an organization that delivers goods or services in a manner that manages risk, cost and value. Risk

Costs

Data

Value

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EY brings business focus to your EHS management system

EY brings you a mix of skills and resources on a global basis that very few professional services organizations can match.

Industry insights EY participates in the world’s leading standard setting organizations. This can help you identify and stay ahead of new trends and insights.

EY resourcesEY has teams of professionals who can support almost every area of your company. This includes engineers, scientists, accountants, information technology, finance, tax, transaction professionals and many more. This helps us bring you recommendations that consider the implications to your overall company.

Global reachEY’s global network and multidisciplinary teams take a broad view of risks and develop recommendations that can support you on your path to managing risk, reducing costs andcapturing revenue.

Plus OneEY’s concept of Plus One is a safety approach that applies a different way of thinking about EHS risk. We can help your teams make the right connections within your company and move beyond the regular ”zero harm” approach, to help you to take measures to avoid or help mitigate risks, often exceeding regulations.

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About EY

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