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GEMI Survey EHS Metrics and Processes

GEMI Survey EHS Metrics and Processes. January 2003. Carl Wirdak Occidental Petroleum Corporation. Outline. Survey Recap EHS Metrics Metrics Process and Practice. Survey Overview.

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GEMI Survey EHS Metrics and Processes

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  1. GEMI SurveyEHS Metrics and Processes January 2003 Carl Wirdak Occidental Petroleum Corporation

  2. Outline • Survey Recap • EHS Metrics • Metrics Process and Practice EHS Metrics & Processes

  3. Survey Overview • Survey addresses the management of environment, health or safety (EHS) metrics and metrics processes that apply to a company’s business activities • Survey response rate ~60% • 21 companies responded to the survey • Not all companies completed all questions • Broad industry coverage • Thank you to all participants! EHS Metrics & Processes

  4. Metrics Overview • Over 475 EHS metrics listed (about 23 per company) • Heavily weighted to environmental • Balance among internal measures EHS Metrics & Processes

  5. Metrics Usage • Metrics used most often to assess organizational performance – “Are we doing what we set out to do?” • Influencing key stakeholders (external) is important EHS Metrics & Processes

  6. Topical Coverage • Focus is on the basics • Communicating environmental performance to external audience is key • More balanced message to internal audiences EHS Metrics & Processes

  7. Leading / Lagging Indicators Most firms rely on lagging indicators for EHS metrics EHS Metrics & Processes

  8. Quantitative Targets • Widespread use of quantitative targets • Nine GEMI companies have numeric targets on all internal EHS metrics EHS Metrics & Processes

  9. Normalization • Almost all firms use normalized metrics • Greater use in communication of EHS metrics to external audiences • Man-hours, production units and revenue are the most common bases EHS Metrics & Processes

  10. Update Frequency Internal EHS metrics updated more frequently than those reported externally EHS Metrics & Processes

  11. Overview of Metrics Processes • Most companies have documented their procedures for metrics practices • Few have calculated the costs associated with developing, collecting and reporting on EHS metrics, but… • Most expect to spend about the same as last year • Most companies do not have a problem with management support of the EHS metrics program EHS Metrics & Processes

  12. New Metrics - Practical Considerations What steps do companies perform when developing new EHS metrics? Very Important Not Important Considered EHS Metrics & Processes

  13. New Metrics – “Value-Added” Factors Top 10 “value-added” factors companies consider when assessing an EHS metric Very Important Not Important Considered EHS Metrics & Processes

  14. New Metrics – “Value-Added” Factors Less popular factors companies consider when assessing the “value-added” by an EHS metric Very Important Not Important Considered EHS Metrics & Processes

  15. Data Sources • Regulatory reports • Audit results / findings • Computerized MIS Common • Monitoring / measuring equipment • Management systems reviews • Inventory and production records • External reports and studies • Interviews / discussions • Quality management systems • Financial and accounting systems Uncommon EHS Metrics & Processes

  16. Data Capture & Validation Capture Validation EHS Metrics & Processes

  17. Metrics Reporting and Analysis • EHS metrics are reported to management in a variety of ways • Fewer than half (~40%) of the survey respondents reported use of a “Balanced Scorecard” approach to managing overall business goals, but all companies that use it include EHS metrics in the mix EHS Metrics & Processes

  18. Performance Evaluation Not Important Considered Important EHS Metrics & Processes

  19. EHS Performance Feedback • EHS metrics are used by all companies as a tool to improve company performance • When a metric indicates sub-par performance, >80% of companies do further analysis • Further analysis leads to performance improvement about 67% of the time EHS Metrics & Processes

  20. Continuous Improvement of Metrics What factors do companies consider when assessing how to improve EHS metrics? Importance EHS Metrics & Processes

  21. Metrics Turnover 20 Dropped 15 Added Number of companies 10 5 0 0-10 11-20 21-30 31-40 41-50 Annual turnover percentage Metrics Turnover EHS Metrics & Processes

  22. Conclusions • There are many different metrics in use • Differences exist between metrics that are used internally and those that are communicated externally • EHS metrics are linked to the business • The use of lagging indicators far outweighs the use of leading indicators • Applying quantitative targets to metrics is common practice • Generally, metrics processes are sophisticated and mature • Companies continue to search for better metrics • Questions /comments? EHS Metrics & Processes

  23. Future Benchmarking Study Ideas • Development of goals and their relation to the metrics • The use of cost accounting practices (ABC, TCA) within EHS and how it relates in the various business aspects, operations, product development, etc • The use of the Balanced Scorecard for EHS and how it is aligned with the business's use of the scorecard • International regulatory tracking & influence • Climate change approaches • Audit process and management • Management systems implementation • How, by whom and when companies conduct independent verifications of their metrics systems • A study on GRI reporting, such as to what extent are member companies complying EHS Metrics & Processes

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