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LEADERSHIP – THE BUSINESS CASE FOR HEALTH & SAFETY

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  1. LEADERSHIP –THE BUSINESS CASE FOR HEALTH & SAFETY XVIII World Congress on Safety and Health at WorkMay 29 – July 2, 2008Seoul, Korea Maureen Shaw, President and CEO Industrial Accident Prevention Association (IAPA) July 1, 2008

  2. Leadership – The Business Case for Health & Safety We know that health, safety, and environmental programming is a corporate economic imperative. Increasingly, so does the business community. Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 2

  3. IAPA Vision A world where risks are controlled because everyone believes suffering and loss are morally, socially, and economically unacceptable. Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 3

  4. Why Do Businesses Invest? • Global – The ILO estimates annual global losses in gross domestic product (GDP) due to workplace illness, injury, and death at $1.25 trillion (US$1,250,000 million), or 4% of annual global GDP Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 4

  5. Why Do Businesses Invest? (cont’d) • Canada – Absence due to employee illness and disability costs Canadian companies CDN$16 billion annually – Lost productivity due to mental illness costs Canadian companies CDN$11 billion annually Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 5

  6. Health, Safety, and Environment – A Business Imperative • Signs that the business community is recognizing health, safety, and the environment (HSE) as a business imperative: – CEOs are taking on HSE as a measure of their own performance – Businesses are publishing their HSE results – Financial analysts are watching – Investors are acting – The media are reporting – Regulatory penalties and civil awards are growing Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 6

  7. Health and Safety Continuum of Business Advantage Satisfied to do the minimum required to comply with law/regulation Want to build and sustain their HSW program See HSW excellence as a business advantage • Adherence to laws/regulations • Avoid penalties/fines • Reduce premiums • Decrease injury costs • Lower injury rates • Increase share price • Preserve or increase brand value Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 7

  8. South Africa • Anglo American offers free antiretroviral treatment to HIV+ employees at an annual cost per employee that exceeds annual income of most black workers Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 8

  9. Canada • DaimlerChrysler plant introduces a program to improve employees’ cardiovascular health: – Half lose an average of 16 lbs (7 kilos) – 1/3 smokers stop – Overall risk of heart diseases goes from medium to low Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 9

  10. What is the Connection? The bottom line. Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 10

  11. Bottom Line Results • Anglo American – Cost of treatments are more than offset by: • Lower absenteeism • Reduced health care • Greater retention of skilled employees • Improved Productivity Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 11

  12. Bottom Line Results (cont’d) • DaimlerChrysler If this program were expanded to all Canadian plants, the company would save CDN$2M over a 10 year period Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 12

  13. Financial Returns • Over 60% of CFOs recently surveyed by Liberty Mutual said that each $1 invested in injury prevention generated returns of $2 or more • The US OSHA asserts that companies implementing effective safety and health programs can reduce injury and illness rates by 20% or more, and generate a return of $4 to $6 for every $1 Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 13

  14. Stories from the Business Community • Alcan : EHS First program • IAPA Safety Groups • Sears Roebuck Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 14

  15. Alcan In 2005, Alcan’s environment, health, and safety management system – EHS FIRST – delivered US$43 million in benefits, mostly from safety. IAPA Leadership Forum April 2007 Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 15

  16. IAPA Safety Group • IAPA brings participating companies together, facilitates exchanges of expertise and ideas, and offers one-on-one assistance as needed • Membership has increased by 528% since its formation – from 121 firms in 2004 to 760 firms in 2008 • In 2006, there were 548 companies involved. They achieved a 32.67% reduction in lost-time injury rates and more than CDN$3M in a collective rebate Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 16

  17. IAPA Safety Group (cont’d) “Since joining IAPA’s Safety Group, our incident and accident rates have dropped tremendously and our return-to-work program has been a great success.” Egan and Team Board Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 17

  18. 4% improvement in 1997 = $200 Million The Service Profit Chain Customer Loyalty (+ 1.3%) The Bottom Line (+ 0.5%) Employee Satisfaction (+ 5%) Source: Harvard Business Review, Jan/Feb, 1998 Manager Accountability Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 18

  19. Additional Gains • Greater productivity and reliability • New competencies • Enhanced organization capacity • Better employee relations • More public trust Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 19

  20. Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA

  21. Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA

  22. Common Success Factors • Creating the Right Culture • Setting your own standards and expectations • Establishing an HSE management system • Integrate HSE into operations • Train employees • Integrate HSE into supply chain management • Look beyond financial returns Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 22

  23. Call to Action A 2007 survey of top executives around the world found that 9 out of 10 respondents are incorporating environmental, social and governance issues into their firm’s core strategy more than they were five years ago. One voice is a single person. Many voices are a movement. Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 23

  24. Thank You For a copy of this presentation, speaking notes and/or the paper on “The Business Case for Health and Safety” Go to: www.iapa.ca Leadership – The Business Case for Health & Safety XVIII World Congress on Safety and Health at Work Seoul, Korea - July 1, 2008 Maureen Shaw, President and CEO, IAPA 24