There has been an increase in the number of top Fortune 500 companies reporting safety statistics within Canada, however, there are no perfect metrics for assessing and comparing safety performance.
Many more top 500 companies have been reporting safety statistics over the past few years – a trend which is in line with increased expectations from investors that companies report safety data and demonstrate active programs to manage safety, according to a recent independent research report.
A recent study which focused on a the top 100 Fortune 500 listed companies within Canada, found that only 46 are currently reporting injury data, and of these 46 companies, 5 report their lost time injury frequency rate (LTIFR), 8 report their total recordable injury frequency rate (TRIFR) and only 20 report both LTIFR and TRIFR.
In the past year, 20 companies out of 46 also reported a decline in LTIFR between the most recent year and the previous year, 18 companies reported a decline in TRIFR while 5 companies increased their LTIFR and the TRIFR increased for ten companies.
Importantly, the report noted that there are no perfect metrics for assessing and comparing companies’ safety programs and performance.
“Data has many inconsistencies, and reporting boundaries vary between companies, sometimes due to inherent differences between industries,” it said. “Some ‘proactive’ companies may use metrics that are less widely reported and don’t fit neatly into our tables and charts, but might actually be more useful.”
Fatalities and Injuries
The report identified 87 fatalities among the companies analysed (over the period FY08 to FY12/FY13), or 93 fatalities including members of the public.
The report found that historically, there have been lower injury rates in heavy industry (such as materials and energy), though there were higher rates for industrial companies with diverse sites, and activities like logistics, manual handling and hospitality, including retail. The report also found companies may report higher injury rates or fatalities if contractors, sub-contractors, or sometimes members of the public are included.
“It appears that companies are now reporting more vehicle accidents (such as Suncor, Husky and Enbridge), and we suspect historical reporting may have been less comprehensive,” said the report, which found that fatalities have tended to result from:
vehicle/mobile plant accidents, on public roads, mine sites, etc
helicopter/aircraft accidents
falls from height, falling objects or crush injuries
underground rockfall in mining
electrical accidents
deaths due to lightning, hurricanes and landslip
employees failing to follow procedures
cases where an employer failed to provide safe equipment or a safe workplace.
“We suspect that reporting boundaries vary substantially between companies and industries, and over time. Reporting on traffic accidents may be a key example, including the extent to which contract drivers are included in company reporting,” the report said.
The Evolution of Reporting
“We see a lot more Fortune 500 companies reporting safety statistics than we did when we started doing these studies back in 2009,” said Elaine Prior, managing director, head of environmental social governance research, Citi.
There is a variety of reasons why investors may be interested in the safety of a company’s operations, according to Prior, who said a company’s safety performance and approach can provide a window into “management quality”.
“A ‘safe’ business may also be a well-run, efficient business,” she said. “There can also be costs, production disruptions or shutdowns associated with safety incidents. Safety performance influences companies’ workers compensation costs.”
In terms of contractors, Prior also said a contracting company’s safety record may affect its ability to win contracts, particularly with some companies in the resources and heavy industry sectors.
“Safety can impact a company’s reputation, its ‘licence to operate’, and its relationship with employees and governments. At times, a government regulator may step in to address safety concerns, imposing operational constraints,” she said.
“Some investors may consider avoiding companies that, in their view, do not address safety appropriately or match their criteria in terms of safety.”