On Monday, September 23, IsoMetrix hosted their ESG Conference at the wonderful Porsche Experience Center. Delegates from around the world attended to gain insight into trends in the disciplines of Environmental, Social and Governance (ESG), and Health and Safety.
IsoMetrix has gained recognition as a global leader in the provision of software for managing material risks and non-financial reporting aspects. Exciting recent developments have allowed the software company to maintain its growth trajectory and entrench its status as a leader in the EHS space.
Delegates enjoyed meeting and networking with other IsoMetrix customers and discussing their challenges and possible solutions with industry peers. They got an exclusive sneak peak at the exciting IsoMetrix technology roadmap and future innovations.
Speaking at the conference were:
- Thibaut Millet, Sustainability Leader at EY
- Shannon Lardi, SSH & Environmental Specialist at ExxonMobil
- Ekgapark Wonghirunsombat, ERS&S Product Owner at ExxonMobil
- Dr AKB Chigwada, Head of HSE at Zimplats
- Tracey Jacquemin, Corporate Manager HSEC at Trevali
- Stuart Neumann, Director at Verdantix
- Michael Rasmussen, GRC pundit at GRC 20/20
- Karl Campbell, CEO at NOSA
- J R VanOrder, Principal and Digital Solutions Practice Director at Golder
- Mohamed Wann, Director, The Carlyle Group
Co-founders and brothers Paul and Dennis Marketos opened the prestigious event with news of the recent investment and talked about the exciting road ahead. “While we continue to have double digit growth year on year, the investment will ensure more capacity and expertise,” said Dennis. “Accelerated R&D means more features; investment in quality assurance and investment in systems support. We honor our customer commitment to being ‘big enough to cope, small enough to care’,” said Paul.
We then heard from Mohammed Wann, Director at The Carlyle Group
describe how IsoMetrix is preparing for sustainable growth opportunities, “We’re looking at where the industry is going as a whole, and how IsoMetrix can position itself to deliver on the needs of customers.
ESG Factors and Long-Term Value Creation – Thibaut Millet, EY
Thibaut Millet is a Partner at EY and the National leader of the Climate Change & Sustainability practice for Canada. He has 20 years of experience in providing advisory and audit services to leading Canadian and international clients in the field of climate change and sustainability. He is a recognized sustainability strategist and has developed innovative solutions to help his clients create value, improve their Environment, Health and Safety and sustainability performance, manage greenhouse gas emissions, and provide sustainable economic development.
Thibaut Millet asked delegates a poignant question: “Who here can clearly articulate your company’s ESG vision statement?” No-one could answer, highlighting the difficulty that organizations face.
Thibaut explains that ESG risks are increasingly acknowledged on the global risk landscape. According to the World Economic Forum’s top economic risk factors based on its annual Global Risk Perception Survey; the top three risks in terms of likelihood are extreme weather events, failure of climate change mitigation and adaption and natural disasters. Ranking in the top ten risks are man-made environmental disasters, biodiversity loss and ecosystem collapse and water crisis.
“ESG risk is compounded by several macro drivers for change,” he says. “External factors such as regulation and other legal guidance, increasingly complex and demanding stakeholder expectations and multinational drivers such as the Paris Agreement influence the risk landscape. Conversely, the risk landscape (Financial, regulatory and compliance, operational and reputational risks) impact the macro drivers for change.”
Industry developments are also macro drivers for change. “High-profile investors such as Larry Fink acknowledge the materiality of ESG risk. There is a broader interpretation of fiduciary duty to include longer-term value drivers,” he says.
“As a result, investors place greater emphasis on ESG factors when evaluating companies in which to invest,” says Thibaut. 97% of investors say they conduct an evaluation of ESG disclosures, and that these play a pivotal role in investor decision making.
Thibaut shows that in the EY survey “Does your financial reporting tell your value creation story? (EY 2019), four factors emerge as the most important in investor decision making. These are:
- Supply chain
- Human rights
- Climate change
In seeking to better communicate to their stakeholders how organizations create value, it is important to take a broader view of value, and examine the key value drivers of long-term, sustainable growth. These are:
- Human: Human capital deployment, organizational culture, health
- Consumer trends: Consumer trust, innovation
- Societal: Sustainable development goals
- All: corporate governance
“What comes next?” asks Thibaut. Internally, organizations need to improve risk management by streamlining internal processes around identifying, assessing and mitigating potentially financially material ESG risks. Organizations must also improve the definition and management of indicators to create long term value for stakeholders.
ExxonMobil: Journey to Enterprise – Shannon Lardi and Ekgapark Wonghirunsombat, ExxonMobil
Shannon Lardi is the Safety, Security, Health & Environment (SSHE) Specialist at ExxonMobil in Spring, Texas. Prior to getting her Bachelor of Science in Business/e-Business, Shannon honed her technical skills in Communication-Electronics while serving in the United States Marine Corps. Over the last 18 years with ExxonMobil, Shannon has implemented business intelligence tools across the company with a strategic focus on sustainability. Her avid interest in learning and being around people extends easily into her love of music and passion for travel.
Ekgapark Wonghirunsombat (Ek) joined ExxonMobil in 2013 in the IT organization. Ek provides global IT support in Environment, Regulatory, Socioeconomic and Sustainability (ERS&S) including architecture design, implementation and operational support. Ek also works closely with different software vendors in EHS to align with the ExxonMobil IT strategic vision and define the software roadmaps for ExxonMobil. Ek has been travelling to different ExxonMobil sites to understand the business processes and identify improvement opportunities by bringing modern technology and tools that match with business requirements.
ExxonMobil have been on a journey with IsoMetrix. Ek described the challenges and opportunities at each of three phases; from the pioneer phase, to expansion and sustainment.
And like other customers in the room, their requirements changed over time. “A one site approach is different to a global approach. So, things will need to change, and that’s ok,” acknowledged Shannon.
Delivering Sustainable Zero Harm: The Zimplats Story – Dr AKB Chigwada
As the Group Safety, Health, Environment and Quality (SHEQ) Manager, Dr Abednego Chigwada is responsible for the development of a strong and well-informed SHEQ culture within the company, enabling sound business decisions that balance risk and reward.
“Back in 2008 we realized we had a problem,” explains Abednego. “That year we had 154 injuries, of 11 were LTIs. Ten years later, as at end September 2018, we have had 3 injuries, of which one was a first-aid case, the second a minor injury, and the third an LTI.”
How did Zimplats achieve this? The mine analyzed the top risks in operations and identified technologies that would reduce these risks. Recently the mine had a fall of ground collapse, with zero injuries. The sensors that had been installed for remote monitoring of ground stability had allowed the company to evacuate everyone before the collapse occurred. “This was a fantastic achievement, but we remain humble and committed to continuous learning,” Abednego says.
“A positive safety culture improves EHS in a workplace,” he says. To develop a safety culture, Zimplats used the background and cultures of its workforce to inform their strategy. In this way they were able to reach their employees on a more relatable level and significantly reduce workplace accidents. Safety culture was implemented in phases. The first phase dealt with technical and mechanical errors, the second phase emphasized technology and implementing IsoMetrix as an EHS management system. The final phase dealt with cognitive errors, as he explains, “Attitude plays a big role in safety culture, it is about us and how we do business as a collective, not just leadership.”
Zimplat’s road to zero harm included adopting Ubuntu philosophy which promulgates the idea that “I am because we are”. In this context, it meant instilling safety culture as everyone’s responsibility. “We did not implement an EHS policy, we saw safety as vitally important to our business, we have a Business Management Policy.
Abednego explains that it was important to have a technology system in place to support this strategy, as the mine was able to track progress through an action manager and identify dangerous zones.
New Paradigm Emerges for EHS and Sustainability – Stuart Neumann, Director Advisory Services at Verdantix
Stuart Neumann leads Verdantix advisory services worldwide, which involves delivering high impact projects for clients seeking help with challenges and opportunities in the energy, EH&S and sustainability markets. His client project experience in the energy sector spans energy services commercial due diligence, go to market strategy, renewable energy market forecasts, power utility sustainability benchmarks and CEO-level thought leadership projects. Stuart joined Verdantix in 2010. Prior to his career at Verdantix, Stuart was a management consultant at Accenture for 5 years. Stuart holds an MSc in Environmental Geomorphology from Oxford University and a BA in Geography from the University of Nottingham.
“There are five mega-trends that drive radical changes in EHS and Sustainability today,” says Stuart. These are climate change, generational changes in the workforce (Millennials), the growing importance of health in environmental, health and safety matters, technology and operational excellence.
Technology impacts every aspect of EHS and Sustainability. In process industries, the fourth industrial revolution is driving radical change in work practices which is in turn impacting EHS and Sustainability function.
“EHS and sustainability functions will fail without robust digital strategies,” argues Stuart. “These mega trends are prompting an explosion in data streams and reporting requirements around EHS and sustainability.”
Effectively managing these functions without a clear and robust digital strategy is no longer a credible approach. “52% of respondents in our global EHS Leaders Survey had already implemented a digital transformation strategy for their firms,” says Stuart. The study showed that a wide range of different technologies had been deployed across the organizations interviewed. What’s more, EHS software has become established as the core information management tool at the center of these digital strategies. “The majority of firms have some sort of EHS management software in place to support their processes,” says Stuart. “Digital technology is the area of spend showing the greatest increase through 2019 for EHS leaders.”
To remain relevant, EHS and sustainability leaders must take the following six steps:
- Review their functional objectives: The objectives of the EHS and Sustainability functions should be clearly traceable to the overall goals of the organization.
- Analyze digital options: They need to understand the various digital tools available and how these tools can support in achieving the objective of the organization.
- Determine current and target maturity: Once the market landscape is better understood, the organization can start to determine their current and target digital maturity levels.
- Establish a digital strategy: It is only at this point that the organization can define its digital strategy.
- Build the business case: With the digital strategy in place EHS and sustainability leaders should expect to build a business case to secure buy-in for the necessary investment.
- Execute the digital strategy: EHS and sustainability leaders may need to consider external support to successfully execute their digital strategy.
During the panel discussion, moderator and Americas CEO John Castner probed panelists to consider how ESG risks fit into the broader risk landscape:
Michael Rasmussen is an internationally recognized pundit on governance, risk management, and compliance. With 25+ years of experience, Michael has been called the “Father of GRC” — being the first to define and model the GRC market in February 2002 while at Forrester. Michael drew our attention to the many acronyms we have to describe different risks and reminded delegates that risks are not in silos. Citing his recent thought leadership piece, “Navigating Chaos” Michael stressed that it’s important we understand the interconnectivity of risks in order to manage them in a way that’s effective, efficient and agile.
Karl Campbell, CEO at NOSA, reiterated that ESG is the new EHS; “It’s critical for companies to report on sustainability. Stakeholders – from investors, board and the public – demand transparency.”
J R VanOrder, Principal and Digital Solutions Practice Director at the consultancy Golder acknowledged the increasing need for digital transformation and the associated challenges associated with implementations adding, “you need a team you can trust and a process for handling things you didn’t expect.”
Tracey Jacquemin gave insight into the growing importance of ESG from a corporate perspective – and that of multi-national mining companies: “Managing multiple jurisdictions with different languages is a challenge,” she said. “Trevali invests a lot in digital transformation. Rather than just being a reporting output, managing ESG risks and Trevali’s entrenched “Culture of Care” is what drives the company’s purpose. We strive to be “the world’s best sustainable underground mining company.”
Robin Bolton, Executive Head of Sustainability at IsoMetrix has been in the environmental, social and sustainability field since 2000, initially as a consultant and thereafter with IsoMetrix. He stressed the importance of collecting accurate data as well as removing the administrative burden often associated with creating regulatory or board level reports. “Technology should be an enabler, automatically flagging exception data in as close as real time as possible. This empowers the team and allows them to spend more time in the field, implementing continuous improvements that benefit the organization, its people and local communities.”
If you would like to find out more about IsoMetrix or future events, please contact us.