The Windsor Consulting Group, Inc.Occupational Health and Safety Sustainability

Global Business Strategies

Mainstream Media / Awakened Public

Mainstream Media / Awakened Public

Sustainability “3-Legged Stool”

Morale Imperative Approach

The World’s Problems- poverty - loss of biodiversity - lack of basic freedoms - climate change

- hunger - resource depletion - environmental degradation - inequity

Corporate Sustainability- companies are essential to solving these problems Social Responsibility

- society can withhold their license to operate if they don’t TBL reporting

Happens to be Good for Business

Consumers

SRI - statistical correlations- case studies of select companies

Employees

Gov

Banks and Investors Taking Action

• Citigroup: largest U.S. bank; (Jan 06) will reduce GHGs from its 13,000 properties by 10% by 2011

• Bank of America: second largest U.S. bank; (Apr 05) $3K rebates on employee hybrids; (Mar 07) $20B over 10 years to support growth in environmentally friendly activities and reduce global warming; reduced mortgage rates on energy efficient homes

• Goldman Sachs: (Nov 06) first major investment bank to adopt a comprehensive environmental policy; investing $1B in clean energy projects

• JP Morgan Chase: (Apr 05) adopted Equator Principles

• 348 shareholder resolutions on ESG issues 2005 (up 16% from 2003); 177 social resolutions reached a vote (up 22% from 2003)

Risk Governance

XWe Cannot Avoid

XNot Effective

Limited Insurance Coverage

Business Continuity Management

Sustainability as a Responsible Care Initiative

Sustainability is linked to

♦ Operating discipline

♦ Raw material selection

♦ Supply chain optimization

♦ Sustainable product development

♦ Social responsibility commitments

Sustainability “Old and New Models”

♦ Environmental Water & Air Pollution ♦ Occupational Injuries/Illness &

Disease ♦ Unsafe/Unhealthful Work

Environment ♦ Untrained workforce in health &

safety ♦ Unsafe/healthful product for

consumer ♦ Hazardous raw materials

New ModelOld Model

♦ Reduced air and water pollution ♦Written SOPs and business rules ♦ Integrated safety management

plan ♦ Application of risk governance ♦ Engagement of all stakeholders ♦ Product stewardship and lifecycle

Workplace Fatalities: 2.3M Deaths/Yr.

Communicable Diseases 27%

Malignant Neoplasms 27%

OtherFatalities 2%

Respiratory System Diseases 6%

Circulatory System

Diseases 22%

Accidents & Violence 16%

Keys for Success in Sustainable Development

Maintain the balance between economic growth, environment, occupational health and safety, and social aspects by:

♦ An integrated approach for business operations;

♦ Partnerships and collaboration among all stakeholders;

♦ A cross-disciplinary approach using OESH professionals;

♦ Control all risks and develop a business continuity plan

Profit

Planet

People Occupational health and safety equity

Natural resourcesand environment

Roles and Responsibilities

VALDEZ

1948: Declaration of human rights1961: WWF, Amnesty International1970s: Environmental movements in air, water, and land pollution1980s: 1984: Bhopal; 1986: Chernobyl; 1989: Exxon Valdez…2002: Enron, WorldCom…2010: BP Deep Water Horizon, mine explosions in Chile, WV, and China2011: Fukushima Daiichi nuclear plant, Conoco/Phillips oil spill in China

Global Framework and Initiatives

SarbOx

The search for solutions is happening on a global scale and is being led by both public institutions and as part of private initiatives. Solutions include new legislation, stakeholder partnerships, voluntary agreements, codes of conduct, multilateral agreements, interdependent actions, etc.

Environmental Health and Safety as New Benefit Area

Global Warming

Water, Air, & Land Pollution

Resource Depletion

OzoneDepletion

Reductionof Biodiversity

PopulationIncrease &

Economic Growth

Business Continuity Recovery Model

Success, recovery or failure?

Critical recovery point

B

No BCM – lucky escape

C No BCM – usual outcome

A

Fully tested effective BCM

Leve

l of

busi

ness

Land and Water Pollution

Agriculture + industrial activities + waste generation - Intensive use of chemical fertilizers storm water runoff

- Intensive land and water exploitation

Global Consumption of Fertilizers

0

40000

80000

120000

160000

1960 1970 1980 1990 2000

Year

Kton

s of

NPK

nut

rient

Fertilizer consumed

Air Pollution

Main environmental threat to human health

-SO2 and NO2 emissions Acid rain- Carbon monoxide and Carbon dioxide

Global climate change- Particulates Respiratory disease

CITY PARTICLES

(μg/m3) [1995]

SO2

(μg/m3) [1998]

NO2

(μg/m3) [1998]

WHO STANDARDS < 90 < 50 < 50

PARIS 14 14 57

NEW YORK .. 26 79

BEIJING 377 90 122

BOMBAY 240 33 39

TOKYO 49 18 68

STOCKHOLM 9 3 20

Environmental and Occupational Health and Safety Market Segments

♦ Building and Construction ♦ Aerospace and Aviation ♦ Chemicals ♦ Energy and Utilities ♦ Food and Beverage ♦ Hospitality ♦ Manufacturing ♦ Mining and Metals Processing ♦ Oil and Gas ♦ Pulp and Paper ♦ Transportation

Roadmap Path Forward

Key Capabilities / Core CompetenciesRisk Governance

Use sustainability principles to drive project experience toward risk communication, risk assessment, risk management, and risk planningUse sustainability in modeling and decision support tools to include root cause analysis related to occupational safety and health and environmental issuesUse sustainability to enhance product line to analysis of natural disaster likelihood and impacts of climate change (supports flood /drought damage, tornados/hurricanes, and consequence of business interruption)

Independent Verification and Validation and Alternatives (VV&A) AnalysisUse sustainability to evaluate business investment / acquisition cost and performance models in situations of uncertainty, product stewardship, workforce development, and lifecycle analysisUse sustainability in economic risk modeling applications involving both occupational and environmental health and safety

Roadmap Path Forward

Key Capabilities / Core CompetenciesQuality Management and Certification can use sustainability to:

♦Expand role of professional certified auditors for ISO standards through quality evaluations♦Meet business requirements of ISO 9000, 14000, and 26000 ♦Synchronize and innovate offerings for training, and education while promoting other business-related services

New Occupational and Environmental Health and Safety (OEHS) Consulting Products and Services can use sustainability to: ♦Develop as a center of excellence to support business development and diverse growth into other market segments ♦Promote risk governance principles to manage risk ♦Align GRI index to include all aspects of OEHS

BLUF: Sustainability is an innovative index of excellence

Roadmap Path Forward

Implementing Sustainable Development

Has your company taken any SD initiatives?Can you identify any gaps?What can you do as an individual, as a team,

function or company, to contribute to limit use of energy, water and other resources?

What resources will enable you to achieve this? Can you identify any barriers?

 Alternative model: The Sigma Guidelines provide a systematic model of sustainability management (www.projectsigma.com).

Assess the situation

Implement a strategy

Develop a strategy

Measure success

5 Stages and Emerging Drivers

5. Purpose / Passion

4. Integrated Strategy

3. Beyond Compliance

2. Compliance

1. Pre-Compliance

• Eco-Efficiencies• Regulatory/Litigious Threat• Public Relation Crisis

• Strong Leadership• Innovative Planning

• Regulatory Pressure / Enforcement• NGO Social/Political Pressure

P r o

a c

t I v

e

R e

a c

t I v

e• Business Opportunities – “Carrots” • Risk Management – “Sticks”

The Sea of Demanding Stakeholders

Company Value

Non-financials / Reputation

Financials

Employees

Customers

Mainstream Media

Economists

Scientists

NGOs / Civil Society

Competitors

Global Markets / EU

Governments at all levels

Banks & InsurersAwakened Public

Shareholders & Investors

Mega-Issues + Stakeholders = New Market Forces

Company Value

Non-financials

Financials

Customers

Mainstream MediaNGOs / Civil Society Employees

Competitors ScientistsGovernments at all levels

Banks & InsurersAwakened Public

Shareholders & Investors

PandemicsErosion of Trust

Water Crisis

Pollution & Health

Energy Crisis

Climate Crisis

Climate CrisisClimate

CrisisOther …

Global Markets / EU

Economists

Two-part Business Case

Company Value

Non-financials / Reputation

Financials

Customers

Mainstream Media

Economists

Scientists

NGOs / Civil SocietyEmployees

Competitors

Global Markets / EU

Governments at all levels

Banks & InsurersAwakened Public

Shareholders & Investors

1. Standardize senior leadership approach Include SD in vision / mission / strategies Reinforce it as a business strategy rather than a compliance

requirement or philanthropy issue Avoid “green-washing” hype Visible support: speeches, questions, actions

2. Engage, empower, and innovate entire company Solicit ideas from the workforce Provide cross training and education of science and business

3. Align and synchronize performance metrics Develop measurement / management systems Integrate into recognition / reward systems

The Catch

The Business Case for Sustainable – Example: Cleaner Production

Cost savings on water, energy, raw materials, directly add to bottom-line result Improved efficiency = reduced waste/leakage Technology leadership Contribution to solve environmental issues Positive company reputation and brand name

Efficient use of water, energy, raw materialsStarting “at the source” (not end-of-pipe)

The Business Case for Sustainable – Example: Eco-Efficient Products

Preferred by consumers = lower running cost of equipments & tax breaks = lower cost in the life cycle = company can place a price premium = higher profits

Technology leadership and brand recognition Contribution to solve environmental issues Less concern for the waste if using less toxic

materials = more appealing products

More efficient and eco-friendly productsExample: Energy Star products (the US)Blue Angel (Germany)

Occupational Health and Safety as New Benefit Area

Occupational Health and Safety as New Benefit Area

Projected Prevalence of Chronic ConditionsNumber of People With Chronic Conditions (in millions)

• Between 2000 and 2030 the number of Americans with chronic conditions will increase by 37 percent, to over half of the population, an increase of 46 million people.

Source: Wu, S. and Green, A. (2000). Projection of Chronic Illness Prevalence and Cost Inflation. RAND Corporation in Anderson, G. (2010) . Chronic Care: Making the Case for Ongoing Care. Robert

Wood Johnson Foundation. http://www.rwjf.org/pr/product.jsp?id=56828.

Occupational Health and Safety as New Benefit AreaThe Prevalence of Multiple Chronic Conditions

Percentage of All Americans• In 2006, 22 percent of all Americans had at least one chronic condition and 28 percent had two or more chronic conditions.

• Thus, 50% of the population was affected by a chronic condition.

• As the population ages, these percentages will increase.

Source: Medical Expenditure Panel Survey, 2006 in Anderson, G. (2010). Chronic Care: Making the Case for Ongoing Care. Robert Wood Johnson Foundation. http://www.rwjf.org/pr/product.jsp?id=56888.

Occupational Health and Safety as New Benefit Area

Prevalence of Multiple Chronic Conditions Increases with Age

Percentage of Population With Chronic Conditions

Source: Medical Expenditure Panel Survey, 2006 in Anderson, G. (2010). Chronic Care: Making the Case for Ongoing Care. Robert Wood Johnson Foundation. http://www.rwjf.org/pr/product.jsp?

id=56890.

• Prevalence of chronic conditions increases at all ages.

• 73% of people age 65 and older have multiple chronic conditions.

Occupational Health and Safety as New Benefit Area

Healthcare Spending Almost Doubles with People Who Have Chronic Disease

Average Annual Health Care Expense Per Person

Source: Medical Expenditure Panel Survey, 2006 in Anderson, G. (2010). Chronic Care: Making the Case for Ongoing Care. Robert Wood Johnson Foundation http://www.rwjf.org/pr/product.jsp?id=57010.

Occupational Health and Safety as New Benefit Area

Lost Productivity and Chronic Diseases

Occupational Health and Safety as New Benefit Area

Productivity Losses and Selected Chronic Conditions

Occupational Health and Safety as New Benefit Area

Chronic Conditions and Average Annual Days Lost by Age of Worker

Occupational Health and Safety as New Benefit Area

(Estimated) Average Annual Cost of Absenteeism

per Employee by Chronic Condition

Occupational Health and Safety as New Benefit Area

Why Should Employers Be Interested in Addressing Chronic Diseases at Work?

• Workforce is aging – chronic disease burden growing! Preventable illness makes up 70% of the total burden of disease and their associated costs10 modifiable risk factors account for approximately 25% of all healthcare expenditures (Anderson, 2000)Employer medical costs average $7910 per employee annually (O’Donnell, 2010); as RFs increase, so do costs

Effective worksite health promotion programs have demonstrated a positive impact on employee morale, employee health and risk behaviors, productivity, health care costs and ROI range between $3-$5 to $1

Occupational Health and Safety as New Benefit Area

• Increase the proportion of worksites that offer an employee health promotion program to their employees.• Increase the proportion of worksites that offer nutrition or weight management classes or counseling.• Increase the number of employed adults that have access to and participate in employer-based exercise facilities and exercise programs• Reduce the rate of illness and injury cases involving days away from work due to overexertion or repetitive motion.• Reduce occupational skin diseases or disorders among full-time workers • Reduce new cases of work-related, noise-induced hearing loss

Healthy People 2020 Worksite Health Promotion-Related

Objectives

The Business Case for Sustainable – Example: Health and Safety

Reduced medical costs for employees Fewer restricted or lost working days Increase in productivity and quality of life More efficient/productive workforce Happy, health/safety conscious consumers Positive company reputation/brand name Access to highly qualified human capital

Healthier and happy workforce, better neighbors, healthier and safer products, lower risks, and reduced impact on the environment

What would successlook like?....

♦ A widely-shared synchronized understanding of the role of occupational and environmental sustainability

♦ Clear alignment behind key strategic objectives

♦ Strong and effective global investment capacity for shareholders

♦ Unification, standardization, and alignment of all stakeholders

♦ Effective internal and external collaboration and innovation of products and services

♦ An emphasis on continual learning (from both success and failure)…

Questions?

More Information?

Offices located in Washington, DC and New York Metro Area

Email: windsgroup@aol.comTel: 1+ 732.221.5687Websites: www.manta.com/c/mm41tzk/the-windsor-consulting-group-incand www.hgexperts.com/expert-witness.asp?id=49425

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