Where is process safety on the ESG materiality map?

As the focus on ESG Materiality continues to gain prominence in the realm of business reporting requirements, the perspective of those in the process industries regarding materiality becomes crucial. Where should the emphasis lie? While most financial stakeholders typically prioritise aspects like customer base, pension obligations, long-term environmental liabilities, and sustainability of products and services, how does the industry quantify the performance of process safety?

Examining a traditional materiality map, such as the one crafted by S&P Global* for the chemicals sector (shown above), one would anticipate issues like pollution and community impact to be rated as ‘very high’ for both credit and stakeholder materiality. This reflects the societal concerns regarding environmental damage and the health, safety, and wellbeing of affected individuals. The potential financial ramifications of accidents and subsequent remediation, along with reputational harm, underscore the importance of addressing these concerns thoroughly, impacting the firm’s fundraising capabilities.

But what about high hazard operators?

For industries operating within high-hazard environments, where major accidents can result in loss of life and significant environmental harm, process safety concerns must be deemed as material and necessitate comprehensive attention to safeguard stakeholder and investor interests. The challenge lies in effectively communicating this necessity to decision-makers in the boardroom.

Consider the scenario of loss of containment, which could have far-reaching consequences for individuals on-site, surrounding communities, the environment, and the overall business. Mitigating such risks relies on the competence of personnel, adherence to well-designed systems and procedures, all underpinned by a deep understanding of associated hazards and risks. Businesses need assurance that their systems and procedures are robust and consistently implemented, day and night.

However, information regarding these critical aspects is often fragmented, overly detailed, and challenging to decipher. Addressing this challenge requires transparency, accuracy, and consistency from those responsible for compiling and generating reports.

This is precisely where a tailored software solution like OpenPSM proves invaluable. It empowers operational teams to evaluate the design and implementation of management systems, offering high-level insights into effectiveness, maturity, and avenues for improvement. Built upon internationally recognised best practices in process safety management, OpenPSM provides a global perspective, offering unified insights into overall and site-level process safety management performance.

Real-time board reports, based on real-time action

By providing a real-time reporting mechanism, OpenPSM enables boards to identify areas of vulnerability requiring heightened attention, as well as those demonstrating strong performance. In doing so, it facilitates informed decision-making and proactive risk management at all levels of the organisation.

Insight for the board, stakeholders and shareholders comes from an accurate representation of overall process safety management performance, distilled from data assembled through our structured and systematic process. It provides a unified indicator of performance, for ease of understanding within a materiality context.

*S&P Global May 2022