The realities of doing business in Australia are changing. Where once Environment, Social and Corporate Governance (ESG) was a shift in thinking, now it is an imperative of investors, regulators, and employees alike. WHS frameworks are, however, a significant missing piece of the puzzle. WHS is part of the ‘E’ in ESG, yet it still largely remains unconsidered (or under-implemented) across Australia’s ESG frameworks.
To an extent, the missing pieces are not only technical but also cultural. To help clients mitigate the risks of “greenwashing” or ESG “whitewashing,” ESG consultants have emerged. If WHS is clearly not a part of the equation, businesses will not merely hollow or “whitewash” their claims; they will expose their irresponsibility.
ESG and WHS = Responsibility
Sustainable governance and management in the Australian business landscape significantly focuses on climate targets, carbon neutrality, and governance reforms. While pivotal actions are only part of the equation. Neglecting the health, safety, and wellbeing of employees cannot lead to socially (the ‘S’ in ESG) responsible outcome.
It is paradoxical to hope for a safe workplace and declare an intention to reduce carbon emissions and publicly report improved workplace diversity. WHS remains the proverbial elephant in the room. Safety culture, workplace injury, and psychosocial risks are often subverted to the “compliance” box. WHS is still not a part of the equation. Integrating WHS metrics will prevent ESG consultants from perpetuating anything but a fragmented approach to sustainability.
Vested Interests
In a sense, the future of the ESG consulting “markets” is defined by Integrating WHS consultants.
ESG consultants have knowledge regarding climate risks, governance, and investor reporting, while WHS consultants have expertise in the creation of practical systems for the protection of people, such as risk, safety, and wellbeing systems.
When the two work together, companies achieve the most comprehensive sustainability strategy. Think about ESG reports that not only discuss how emissions were cut and how injuries were reduced, how mental health improved, and proactive safety governance was implemented. That’s Australian Integrated Reporting standards.
The Social Dimension: Safety as Sustainability
Australia’s laws are changing to address psychosocial risks such as stress, burnout, and bullying. It’s time for ESG consultants to look at these concerns as well. Social sustainability must include a strong community and protective systems in which employees thrive.
When ESG consultants and WHS consultants come together, psychosocial risk management becomes part of ESG systems. This means that safety moves from being a regulatory obligation to a pillar of sustainability. ESG reports from Australia that measure people’s wellbeing in addition to emissions are a first in sustainable reporting and will establish Australia as a frontrunner in ethical commerce.
Governance beyond the Boardroom
Most people think that Governance starts and ends with the Board with charters, committees, and disclosures.
However, operational safety needs to be included in governance as well. WHS consultants implement systems and procedures to bring governance to life.
For ESG consultants, the governance opportunity and the WHS integration are clear. Rather than concentrating on governance as a document for the purpose of talking to investors, governance can be understood as the accountability of all employees, in all roles, at all levels. With regulators in Australia tightening their focus on ESG and WHS, this approach to governance is not only progressive, but also practical.
Integration of Climate Transition & Worker Safety
The climate transition is becoming more urgent for Australia, with all sectors, including construction and mining, being forced to decarbonise. However, the transition creates new risks: new work practices, extreme weather, and emerging technologies. These risks must be embedded into the frameworks of ESG consultants, as climate resilience cannot happen without human resilience.
WHS Consultants are crucial in this domain, as they ensure the safety systems are adaptable to the climate strategies to ensure that workers are protected from heat stress during the prolonged summer seasons and to address the risks created by renewable energy systems. Together, WHS and ESG consultants enable Australian organisations to address the climate transition while ensuring the safety of workers.
Integrated Reporting is the New Benchmark
The new benchmark for Australian ESG consulting is integrated reporting that includes safety and sustainability.
Glossy sustainability reports that overlook the realities of the workplace are the type of reports that investors are losing the most patience with. Employees are demanding transparency with how organizations keep them safe and how they are taking steps to protect their well-being.
Consultants can create reports that are comprehensive, future-ready, and credible by incorporating Workplace Health and Safety (WHS) into Environmental, Social and Governance (ESG) frameworks. It is time to change what sustainability looks like in Australia and incorporating WHS into ESG frameworks is one of the first steps.
Conclusion: ESG in Australia
The scope of the ESG consultant in Australia is broadening, and to meet the demands of the clients, the industry experts must go beyond the traditional focus of emissions and governance. It is time to focus on the more human side of sustainability, and WHS consultants are the best suited to provide support.
Sustainability and WHS are no longer considered to be on opposite sides of the ESG equation. For organizations to flourish in the next decade, they must integrate ESG and WHS and view them as interconnected frameworks of responsible business.
