RESEARCH REPORT 217 - Health and Safety Executive · RESEARCH REPORT 217. HSE ... (SOHAS) The Health and Safety Executive ... A No Y 7 UW S B Yes Y 9.9 -E C No Y 9 -E D No Y 8 -E

HSE Health & Safety

Executive

The development of a health and safety management index for use by business, investors, employees, the

regulator and other stakeholders

Prepared by Greenstreet Berman Ltd for the Health and Safety Executive 2004

RESEARCH REPORT 217

HSE Health & Safety

Executive

The development of a health and safety management index for use by business, investors, employees, the

regulator and other stakeholders

Sara Marsden, Michael Wright, Joscelyne Shaw & Catherine Beardwell

Greenstreet Berman Ltd Fulcrum House

5 Southern Court South Street

Reading Berkshire RG1 4QS

The development of a health and safety performance index is one outcome of the work initiated by the Revitalising Health and Safety strategy statement and the HSC’s wish to increase incentives for senior managers to manage health and safety well. This project first developed a draft Index, after consultation with key stakeholders, and then piloted the Index in a two stage process with over 20 organisations. The results indicate that an Index of company health and safety performance can be used to compare organisations. The Index is practical and takes a reasonable amount of time to complete, although it is not clear that all organisations can readily include contractor injury or absence rates in their responses. It is recommended that a larger scale validation exercise is completed once an electronic version of the Index is produced and that the institutional arrangements for operating the Index are now considered.

This report and the work it describes were funded by the Health and Safety Executive (HSE). Its contents, including any opinions and/or conclusions expressed, are those of the authors alone and do not necessarily reflect HSE policy.

HSE BOOKS

© Crown copyright 2004

First published 2004

ISBN 0 7176 2834 5

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ACKNOWLEDGEMENTS

The authors would like to extend their sincere thanks to all those organisations that assisted inthe development of this index. To ensure anonymity for all those involved in piloting the indexwe are unable to name those organisations, but of course include them in our thanks.

Contributors included:

Association of British Insurers (ABI) Business in the Community (BitC) Centre for Corporate Accountability (CCA) Confederation of British Industry (CBI) Chemical Industries Association (CIA) Claros Consulting CoreRatings Engineering Employers’ Federation (EEF) Innovest GroupInsight Investment Institution of Occupational Safety and Health (IOSH)Institute for Social and Ethical Accountability (AccountAbility)Institute of Directors (IoD) Institute of Occupational Safety and Health (IOSH) Legal & General Lloyds TSBNestlé UK Responsible Investment Network (RIN) Royal Society for the Prevention of Accidents (RoSPA) Royal & Sun Alliance Sheffield Occupational Health Project (SOHAS) The Health and Safety Executive (HSE)The International Institute for Industrial Environmental Economics (IIIEE) Network Trades Union Congress (TUC)UK Social Investment Forum (UKSIF) University Superannuation Scheme

We would also in particular like to acknowledge the assistance given to us by Roger Bibbings ofRoSPA in recruiting organisations to the pilot second round.

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EXECUTIVE SUMMARY

Background

The development of a health and safety performance index is one outcome of the work initiated by the Revitalising Health and Safety strategy statement and the HSC’s wish to increase incentives for senior managers to manage health and safety well. The HSC also wishes to raise the profile of health and safety as part of the corporate social responsibility (CSR) agenda as it is becoming increasingly prevalent in the context of the corporate and political landscape.

As part of the work that fed into the exploration of implementing Revitalising, HSE commissioned research from Claros Consulting. Their report highlights the contact and influence that some investors, particularly the large institutional investors, have with senior executives.

The Claros research also shows that:

• There is a lot of interest amongst these investors in a health and safety index;

• Many stakeholders already have an intuitive understanding of health and safety management issues;

• Some investors are already beginning to ask questions of companies in respect of their health and safety management.

The research concluded that there is a need for the health and safety community to assist in developing a set of valid indicators.

There is a range of other stakeholders (not least senior executives themselves) who could also make use of a health and safety index to influence senior executive decisions e.g. trade unions, regulators, pressure groups etc. and this is in line with HSC objectives to increasingly encourage and enable other stakeholders to exert positive influence. Also, whilst an index would be a useful tool for external stakeholders, an index would ideally also be a useful tool for senior managers themselves to internally measure their progress and plan specific improvements.

This project aimed to develop and pilot an Index.

Method The project process is outlined in the diagram below. Overall, the project entailed two main stages of work:

• A review of other measures of health and safety performance and indices of environmental performance were used in conjunction with the feedback from exploratory discussions with key stakeholders to design an initial pilot version of an index;

• Development of the index:

� The initial version of the index was piloted with a sample of 7 firms, amended and then re-issued to another pilot sample of firms;

� Additional feedback was received from 3 firms (completed and returned the supporting feedback questionnaire on the Index).

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Project outline

consultation

Index

Stakeholder

Develop Draft

Trial Version 1 of Index

Collate comments & refine Index

Trial Version 2 of Index

Collate comments & refine Index

Project Research Report

Piloted Health & Safety Performance Index

Feedback on Index scores to participating companies

Review of research on health &safety

performance indicators

Review of feedback on previous HSE

reporting challenge

The draft Index

Overall the index comprises a mixture of output and process indicators to give a balanced view of an organisation’s performance. Thus the strengths of both types of indicator are brought to the index. The draft index comprises 5 rated indicators, namely:

• Health and safety management indicators;

• Injury rates (employee and contractor);

• Sickness absence rate;

• A measure of occupational health risk management;

• A major incident rate indicator.

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The index also seeks: • A declaration of highly regulated activities;

• A code for indicating when an incident or event has occurred (or is pending) that has the potential to cause a major loss;

• A request for a Director’s declaration that all health and safety risks are adequately managed (often required by investors with limited resource for research).

It is suggested that further work is done to develop measures of work related ill-health.

A possible format for a company assessment and index of organisations is shown overleaf. The overall rating would be worked out using a collection of separately rated indicators weighted as to importance, illustrated below. The health and safety management indicator is weighted at 0.5 out of a total of 1. This reflects the importance assigned to this “process” indicator. In the absence of any evidence otherwise, the other 4 indicators are not weighted differentially, with each weighted at 0.125 making up the other 0.5 together.

Table E.1: Illustration of specific company assessment Company X Overall rating (Scale of 0 to 10: 0 = worst, 10 = best)

Has a director’s declaration been made?

Does this organisation conduct highly regulated activities that are covered by regulations such as COMAH, Nuclear Site Licenses, aircraft licensing etc?

"Under watch" due to major event?

Details

Indicators Rating (0 to 10) Relative importance

H&S management system 7 0.5

Injury rate 8 0.125 Occupational health risk management 5 0.125

Absence rate 9 0.125

Major incident rating 10 0.125

Overall 1

7.50

Yes

No

No

Weighted rating

3.5

1.0

0.625

1.125

1.250

7.50

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Table E.2: Illustrative index of companies

Industry sector

Company / organisation

Operations with major

loss potential declaration available

Directors H&S index

Under watch Verification

Operations that have the potential for major

loss over…

Declaration is consistent with

recognised Code X

0 = Lowest score, 10 =

Highest score

S = Self assessment

E = Externally verified

A No Y 7 UW S B Yes Y 9.9 - E C No Y 9 - E D No Y 8 - E E Yes Y 5 - S

Results Those organisations taking part in the piloting of the index are listed below in Table E.3., and the scores for each responding organisation are shown in Table E.4. The scores indicate that the Index produces a wide range of scores and hence discriminates between organisations. Some participants commented on the index without returning a completed version.

Table E.3: Identifying pilot companies industry sectors

Initial pilot respondents

Respondent Industry sector A Insurance B Life Assurance C Banks D Food Producers & Processors E Forestry & Paper F Local Authorities G Pharmaceuticals & Biotechnology H Chemicals I Construction & Building Materials

Second stage pilot respondents J Diversified Industrials K Food Producers & Processor L Food Producers & Processor M Information Technology Hardware N General Retailers O Automobiles & Parts P Support Services Q Engineering & Machinery R Aerospace & Defence S Media & Entertainment T NHS Trust U Food Producers & Processor

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Table E.4: Scoring from pilot companies Individual indicators

4Respondent (see Table

E.3 for sector)

Directors declaration

Highly regulated activities

Under watch events

Health and safety

management

Injury rate

Employee absence

rate

Occupational health

management

Major incidents

Overall score

Initial pilot respondents

A No None Signed “has not” 7.80 5.21 5.80 9.33 Not

avail. 7.29

B No None Not signed 6.44 Not

avail. Not

avail. Not

avail. 10.00

C No None Unsigned “has not” 7.04 Not

avail. 3.40 6.00 10.00 7.52

D Yes None Signed “has not” 4.94 3.10 Not

avail. 6.40 5.70 5.00

E Yes None Not signed 6.72 Not

avail. Not

avail. 2.67 10.00 6.53

F index not returned

G Yes COMAH Signed “has not” 8.57 6.30 6.20 8.00 8.80 7.95

H Yes COMAH Signed “has not” 6.89 5.20 Not

avail. 8.50 Not avail. 6.87

I index not returned

Second stage pilot respondents

J Yes

COMAH, Railway safety Unsigned 8.17 6.60 6.40 10.00 6.06 7.72

case regs, etc.

K No None Signed “has not” 7.63 Not

avail. Not avail. 7.14 10.00 6.552

L Yes COMAH, Asbestos licensing

Signed “has not” 4.71 3.003 Not avail. 5.00 2.40 4.09

M Yes None Unsigned 9.38 5.80 6.80 10.00 3.60 7.96

N No None Signed “has not” 3.87 4.304 Not avail. 2.86 10.00 4.80

O No None Signed “has not” 6.45 7.10 6.00 7.86 10.00 7.10

P Yes Asbestos licensing

Signed unstipulat

ed 9.18 4.905 Not avail. 7.50 Not avail. 7.69

Q No None Signed “has not” 6.88 7.80 6.40 7.50 10.00 7.75

R Yes COMAH, IPPC, etc.

Not signed 8.84 4.90 4.20 6.43 Not avail. 7.46

S Yes COMAH, Transport hazardous

cargoes

Signed “has not” 8.41 5.506 5.00 8.21 5.00 7.60

T index not returned

U index not returned

1 Employee injury rate indicator only 2 Absence and injury rate data not completed 3 Employee injury rate indicator only 4 Employee injury rate indicator only 5 Employee injury rate indicator only 6 Employee injury rate indicator only

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Initial pilot feedback

Feedback overall was positive with very constructive suggestions for improvements. As part of the feedback process respondents were asked to rate Index characteristics: practicality, validity, usefulness, acceptability and meaningfulness. Only one respondent completely disagreed that the index was “meaningful” (for their sector). The prime concern for those disagreeing that the Index showed these features was related to concerns about how the Index would be implemented. Similarly five out of seven thought it would be a good idea to publish the Index scores, with the two against concerned that it needed to be verified externally (an option noted in the Index). One of these two thought that external verification was necessary because it was too subjective.

Another recurring reason given for concern was the lack of option to indicate a partial compliance with items.

The initial version of the Index was modified in the light of this feedback.

Second stage pilot feedback

Feedback in the second round was more positive and re-enforced the generally positive sentiments expressed on the Index in the first round. Respondents again were asked to rate the practicality, validity, usefulness, acceptability and meaningfulness of the index. Only two respondents disagreed that the index showed these characteristics and for very specific reasons: one was a holding company with very diverse operations, and the other felt that it already published enough information so that completion of an index would be an unnecessary burden. Understandably one of these two would not be happy to have their score published and the other was unsure. Overall 5 out of 11 thought it would be a good idea to have their results published and 3 were unsure.

There was less concern expressed about external verification probably as a result of changes to the presentation which made it clearer that this was an option. The provision of a “some” option on responses also received no comment, and no concerns were expressed about the range of response options provided.

Conclusions It is concluded that it is viable to produce an Index of company health and safety performance that can be used to compare organisations within sectors and to compare organisations across sectors. The Index is practical and takes a reasonable amount of time to complete, although it is not clear that all organisations can readily include contractor injury or absence rates in their responses. Although some respondents could not provide data on employee injuries and absence in the time scale of this project, it is clear that such data can be produced if the index was “live”. The Index has face validity (i.e. it appears to ask the right questions) and the scores for individual indicators are correlated. Moreover, the index does produce a range of results, indicating that it does discriminate between organisations.

The main area of concern relates to the implementation of the Index, particularly the issue of external verification. Also, the extension of the Index to the overseas aspects of company operations appears challenging.

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Recommendations First, work is required to complete the development and validation of the index.

Recommendation 1: This project has completed preliminary piloting of the Index, including a limited amount of correlation of overall scores and injury/absence rates. Ideally, a larger number of responses would be acquired to enable a larger scale validation of results.

Recommendation 2: This pilot project relied on a paper based version of the Index. This required a transcription of responses into the excel calculation sheet. Ideally, a software version of the Index would be available as a CD-Rom, or on-line for either downloading by firms and/or for online completion. This would ease completion of the Index and encourage its application.

Recommendation 3: The main area of concern related to the implementation of the Index, a matter that was beyond the scope of this pilot project. It is recommended that the HSE/C consider, in consultation with key stakeholders, how best to launch and operate the Index.

Feedback from respondents and stakeholders consulted during this project suggests that:

• An electronic web based version of the Index should be available; • A high profile launch is required; • Organisations would be reluctant to complete the Index if it was operated directly by the

HSE; • The Index should initially only apply to UK operations; • The issue of external verification is vital.

An option It is Greenstreet Berman’s opinion that consideration should be given to the option of the index being operated by an independent organisation sponsored by (say) the HSE and other key stakeholders (such as the ABI), with a steering committee made up of key stakeholder representatives such as;

• TUC; • ABI; • CBI; • HSE; • ROSPA; • Investors.

The organisation operating the Index could also offer a commission based external verification service, along with other independent health and safety organisations. This would require the organisation(s) offering external verification services to possess a health and safety management capability.

It is recommended that the method of implementation is considered in parallel to the development and validation of an electronic version of the Index.

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CONTENTS

ACKNOWLEDGEMENTS ............................................................................................. III

EXECUTIVE SUMMARY................................................................................................V

CONTENTS ..................................................................................................................XII

1 INTRODUCTION .................................................................................................... 1

1.1 Background..................................................................................................... 11.2 Current State of CSR ...................................................................................... 21.3 HSE Preliminary Research ............................................................................. 5

1.3.1 Outline Requirements .............................................................................................. 51.3.2 Feedback on HSC Health and Safety Reporting Guidance ..................................... 61.3.3 Summary of Requirements ...................................................................................... 6

2 REVIEW OF PREVIOUS RESEARCH AND INDICATORS................................... 7

2.1 Summary......................................................................................................... 72.2 Stakeholder needs .......................................................................................... 72.3 Initial review of potential health and safety indicators ..................................... 9

2.3.1 Overview ................................................................................................................. 92.3.2 Process indicators .................................................................................................. 102.3.3 Performance indicators .......................................................................................... 112.3.4 Coding of organisations at impending risk of “a major loss”................................ 142.3.5 Financial indicators ............................................................................................... 152.3.6 Compliance indicators ........................................................................................... 162.3.7 Missing indicators ................................................................................................. 16

2.4 Lessons learned from environmental and sustainability frameworks............ 202.4.1 Measuring performance......................................................................................... 202.4.2 Reporting frameworks ........................................................................................... 212.4.3 International frameworks....................................................................................... 212.4.4 UK frameworks ..................................................................................................... 222.4.5 The SRI community .............................................................................................. 242.4.6 Lessons learned ..................................................................................................... 25

3 EXPLORATORY DISCUSSIONS......................................................................... 26

3.1 Introduction ................................................................................................... 263.2 Summary of feedback ................................................................................... 26

3.2.1 Support for an index .............................................................................................. 263.2.2 What role do you think a health and safety index should fulfil? ........................... 263.2.3 What does your organisation need from a health and safety index? ..................... 273.2.4 Should the index reflect performance of overseas operations of UK firms?......... 283.2.5 What types of areas do you think the index should cover? ................................... 283.2.6 Comments and suggestions regarding proposed indicators................................... 293.2.7 How can the index be used to promote health and safety on the CSR agenda? .... 343.2.8 Other comments .................................................................................................... 35

3.3 Conclusions .................................................................................................. 35

4 DRAFT INDICES .................................................................................................. 38

4.1 Introduction ................................................................................................... 38

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4.2 Key decisions................................................................................................................. 384.3 Overview of the Index .................................................................................................. 384.4 Key features................................................................................................................... 41

4.4.1 Health and safety management indicator.............................................................. 414.4.2 Injury rate indicator ............................................................................................. 424.4.3 Occupational health risk management................................................................. 434.4.4 Sickness absence indicator .................................................................................. 434.4.5 Major incident risk indicator ............................................................................... 434.4.6 Declaration of highly regulated activities............................................................ 444.4.7 Directors’ declaration .......................................................................................... 44

5 PILOTING............................................................................................................................ 45

5.1 Introduction ............................................................................................................ 455.1.1 Aims ......................................................................................................... 455.1.2 Method...................................................................................................... 45

5.2 Initial piloting ......................................................................................................... 465.2.1 Respondents.............................................................................................. 465.2.2 Initial Pilot Scores ................................................................................... 465.2.3 Initial pilot feedback................................................................................. 485.2.4 Conclusions from initial pilot................................................................... 525.2.5 Summary of revisions............................................................................... 53

5.3 Second stage piloting.............................................................................................. 535.3.1 Respondents............................................................................................. 535.3.2 Second round pilot scores........................................................................ 545.3.3 Second round pilot feedback ................................................................... 555.3.4 Final revisions made to pilot index ......................................................... 58

6 CONCLUSIONS AND RECOMMENDATIONS............................................................. 59

6.1 Conclusions ............................................................................................................ 596.2 Considerations for future development .................................................................. 60

6.2.1 Issues arising from the pilot .................................................................... 606.2.2 A Way Forward ........................................................................................ 61

6.3 Recommendations .................................................................................................. 63

7 REFERENCES .................................................................................................................... 64

APPENDICES ......................................................................................................................... 67

APPENDIX A: MATERIALS SUPPORTING STAKEHOLDER DISCUSSIONS .................69APPENDIX B: GRI SOCIAL PERFORMANCE INDICATORS - LABOURPRACTICES AND DECENT WORK....................................................................................... 85APPENDIX C: EXAMPLES OF INDUSTRY SPECIFIC INDICATORS............................... 87APPENDIX D: PILOT FEEDBACK QUESTIONNAIRE....................................................... 95APPENDIX E: POSTER PRESENTATION TO IIIEE NETWORK .................................... 103APPENDIX F: SUMMARY OF FTSE GLOBAL CLASSIFICATION SYSTEM ................107APPENDIX G: SRI COMMUNITY ACTORS – A SELECTION......................................... 109APPENDIX H: THE HEALTH AND SAFETY PERFORMANCE INDEX........................... 1APPENDIX I:CALCULATING THE HEALTH AND SAFETY PERFORMANCE INDEX. 65

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1 INTRODUCTION

1.1 Background

The development of a health and safety performance index is one outcome of the work initiated by the Revitalising Health and Safety strategy statement and the HSC’s wish to increase incentives for senior managers to manage health and safety well. The HSC also wishes to raise the profile of health and safety as part of the corporate social responsibility (CSR) agenda as it is becoming increasingly prevalent in the context of the corporate and political landscape, evidenced in part by:

• The recent Early Day Motion signed by over 230 MPs for a Corporate Responsibility (CORE) Bill, backed by a coalition of more than 25 charities, unions and church groups;

• New French legislation requiring reporting on environment and labour standards performance;

• The international trade union movement’s decision to make corporate accountability the theme for 2003’s international workers’ memorial day; and

• Research showing that the vast majority of FTSE7100 companies now include health and safety in their annual reports.

In accord with this increase in reporting on health and safety, HSC has already begun to take steps to raise the “business profile” of health and safety. For instance the HSC formally responded to the DTI’s consultation document “The Operating and Financial Review Working Group on Materiality” urging them “to include health and safety as a specific topic for company reporting to make clear that health and safety is an important element of the Government’s commitment to developing sustainable work and communities”8. Should this happen, there will be an increasing need for standardised ways of reporting performance.

As part of the work that fed into the exploration of implementing Revitalising, HSE commissioned research from Claros Consulting9. Their report highlights the contact and influence that some investors, particularly the large institutional investors, have with senior executives. The Claros research also shows that:

• There is a lot of interest amongst these investors in a health and safety index;

• Many stakeholders already have an intuitive understanding of health and safety management issues;

• Some investors are already beginning to ask questions of companies in respect of their health and safety management.

The Claros research concluded that there is a need for the health and safety community to assist in developing a set of valid indicators.

7 FTSE now market themselves as “The Independent Global Index Company” providing business indices. 8 Letter from Bill Callaghan, HSC Chair to Rt. Hon. Patricia Hewitt MP, Secretary of State for Trade and Industry, 2 September 2003. 9 Mansley, M. 2002.Health and Safety Indicators for Institutional Investors, Report to the HSE, Claros Consulting

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There is a range of other stakeholders (not least senior executives themselves) who could also make use of a health and safety index to influence senior executive decisions e.g. trade unions, regulators, pressure groups etc. and this is in line with HSC objectives to increasingly encourage and enable other stakeholders to exert positive influence. Also, whilst an index would be a useful tool for external stakeholders, an index would ideally also be a useful tool for senior managers themselves to internally measure their progress and plan specific improvements.

1.2 Current State of CSR Business as a global citizen Corporate Social Responsibility (CSR) as a concept of the business agenda today is broad ranging but is focused at three levels, namely:

• Operational values, policies and practices of companies owned and operated (both in the UK and abroad);

• Management of environmental, social and other “softer” issues within the value chain from raw materials to product dispersion; and

• Voluntary contributions made by the company to community development both locally and internationally.

CSR, also known as corporate citizenship, means many things to many different people. In the USA there is a preference for the use of corporate citizenship as it reflects the largely voluntary philanthropic contributions business makes over and above core activities. However, this definition does not adequately describe the approach of business globally which has increasingly broadened its level of operational considerations in light of concerns and pressures exerted by stakeholders on environmental and societal concerns. The position of companies in society parallels that of individual citizens in that they have both rights and responsibilities in operating. Many stakeholders, e.g. media and NGOs, are suspicious of the power of business but are increasingly recognising its powerful role in shaping our society and ensuring success.

The EU Green Paper on CSR recognises it as a concept that describes the process whereby, on a voluntary basis, business integrates into their business operations:

• Environmental and social concerns; and

• Their interactions with their stakeholders.

It is also recognised that such initiatives are a means to go beyond compliance, and not merely fulfilling legal requirements. Investing in human capital, the environment and stakeholder relations, it is argued, can contribute to a company’s competitiveness.

“Going beyond basic legal obligations in the social area, for example, training, working conditions, management-employee relations, can also have a direct impact on productivity. It opens a way of managing change and of reconciling social development with improved competitiveness”10.

The profile of CSR has risen since the meeting of the European Council in Göteborg, Sweden in June 2001, where it was acknowledged that the Sustainable Development Strategy for Europe requires, in the long-term, that economic growth, social cohesion and environmental protection go hand in hand.

10 European Commission. 2001. Promoting a European framework for Corporate Social Responsibility, Green Paper, DG Employment and Social Affairs, p. 8

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Factors driving this move towards CSR include:

• New concerns and expectations from citizens, consumers, public authorities and investors in the context of globalisation and large scale industrial change;

• Social criteria increasingly influencing the investment decisions of individuals and institutions both as consumers and as investors;

• Increased concern about the damage caused by economic activity to the environment; and,

• Transparency of business activities brought about by the media and modern information and communication technologies.

The argument for the development and mainstreaming of CSR has been that companies and other stakeholders need to consider both core business activities as well as softer issues in terms of the strategic management of their risks. In the current economic environment, where issues related to corporate governance and market instability dominate the headlines, investors are more than ever aware of the need to assess risk. Risk takes a number of forms, and in recent times, non-financial aspects such as reputational risk, have been shown to have a relatively significant bearing on an organisation’s bottom line. The examples often provided include Nike and The Gap where issues related to work practices in developing countries have had a powerful effect on their consumer market perception and value. More recently, the financial claims being lodged against ABB with regard to former employees’ exposure to asbestos illustrate the extent to which occupational health and safety can impact a company financially.

“Most companies in their annual reports pay only lip-services to the idea that ‘employees are their greatest assets’, revealing little about the performance of the workforce to the outside world. However, there is growing evidence to suggest that the recruitment, development and satisfaction of its employees affect a company’s financial performance.11”

In a recent publication “Safety in Numbers” 12 released by the International Labour Organisation, approximately 270 million occupational accidents and 2 million job-related deaths occur across the world each year. In total workplace illness, injury and death it is suggested results in $1,250 billion lost from global gross domestic product. In addition, the costs borne by society owing to work-related accidents and illness include early retirements through disability, absenteeism, unemployment stemming from an impairment of working capacity and poverty. It was stressed that “…companies need to create a ‘safety culture’ to improve workplace occupational safety and health”13.

In a globalising world the economic landscape has been transformed, together with market structures and information flows, leading to increased scrutiny by stakeholders and the media. Many organisations, whether large or small, co-exist, with both having an international reach. Companies have deepened and extended their relationships within the supply chain, e.g. criteria being set to identify preferred suppliers, as well as through other types of business partnerships. Overall, the business environment has become highly complex which places immense challenges in respect to monitoring and controlling them.

11 Kingsmill, D. 2003. Getting the best returns from your human capital, FT Letters to the Editor, 2nd

April 2003 12 ILO. 2003. Safety in numbers: pointers for a global safety culture at work, Geneva, 2003. 13 Business Respect CSR Dispatches No.55, Two million workers die each year, www.mallenbaker.net, 4 May 2003

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Recognising limitations in the current CSR framework

The question, however, is to what extent issues related to occupational health and safety are being incorporated within the broad agenda of CSR. Consideration of such factors as racial and gender diversity within the workplace are vital but do not reflect the full picture of the state of the work place environment.

Generally, within the UK as well as elsewhere, the CSR agenda suggests that companies benchmark and report on company policies and practices in at least one of the following four areas:

• Environment;

• Community;

• Marketplace; and,

• The workplace.

However, the issue of health and safety in the workplace appears to have been by-passed to some extent by CSR. At its simplest, the consideration of health and safety within the working environment does not extend beyond the context of human rights and international labour law requirements, e.g. child labour, discrimination in the workplace, work force diversity, life-long learning, etc. Those that do make reference to health and safety in the work place, fail to elaborate what that means precisely.

Environmental and social reporting receive much greater attention

The development of the GRI14 Reporting Framework has achieved much for the promotion of, and the development towards, a more consistent and standardised reporting structure for companies producing environmental and social (sustainability) reports. This process has also illustrated some of the pitfalls of attempting to establish a set of indicators to cover all industry sectors, all types and sizes of organisations, from which much insight has been gained, e.g. that many wish to have industry-specific indicators to ensure the opportunity to benchmark within their own industry.

Additionally, in the last decade the number of organisations and associations working to promote the inclusion of environmentally sensitive policies and practices into the various aspects of an organisation, e.g. the supply chain, management systems, strategic risk management and investment, has grown enormously. The result is that for many companies, there is much confusion as to what the most suitable and effective approach to adopt should be. Some standardisation has occurred within the management systems with ISO 9001 (2000) now having a similar structure to ISO 14001, which integrates the Eco-Management and Audit Scheme (EMAS). However, other standards are being developed at national level, e.g. the Japanese ethical reporting system ECS 2000, and by specialist organisations, e.g. the Institute for Social and Ethical Accountability with its AA 1000 framework. Whilst much has been achieved in relation to the inclusion of issues reflecting “true” health and safety, much remains to be done.

More information on the Global Reporting Initiative is provided in a later section on social and environmental reporting initiatives (see Appendix B).

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14

CSR – managing or just reporting?

There is an argument that a set of voluntary standards, codes and instruments to assist companies in practicing more sustainable (in all its meanings) activities is the most advantageous, in both the short and long term. However, there is a very real danger that by simply promoting this and the ability to report without necessarily backing it up with the ability to monitor and control, will allow some companies to get away with the equivalent of “greenwash”. Arguably, the effect of developing international and national guidelines overlapping with regulatory authority and domestic law has meant that activities previously classified as voluntary are falling under statutory regulation or common law precedent15.

On the other hand, there are obvious resource limits to the efforts national government, trade unions and other traditional forms of oversight of compliance with requirements. The development of a health and safety management index would certainly empower others who are not health and safety practitioners but are concerned to ascertain the level to which organisations are managing their risks and opportunities. Typically such stakeholders concerned with this aspect of organisational risk would come from within the arenas of investment, insurance and CSR.

The addition to the CSR toolbox of a health and safety performance index serves not only external stakeholders but also equips managers within organisations with a means to drive for continuous improvements by helping them identify key aspects that can be measured, managed and reported on.

1.3 HSE Preliminary Research

1.3.1 Outline Requirements

The Claros report16 concluded that there was a need for health and safety expert input into the development of a health and safety index. From discussions with some insurers, the report suggested six core indicators, but came to no conclusions about their validity and feasibility, and also did not develop a method of measuring the indicators, e.g. how to calculate an injury rate.

The report also makes clear that investors have varying needs – both in terms of levels and verification of information, and in the specific nature of their interest. Some focus more on health and safety risk management (as an indicator of financial security), others more on the health and welfare of workers. It is likely that an index will need to cater for these differing requirements.

Claros also highlights other important considerations, including:

• Many firms are global;

• The need to link to international initiatives such as those developed by the Global Reporting Initiative (GRI) and The European Chemical Industry Federation (CEFIC);

• The need to address major risks as well as minor health and safety hazards; and

• Measurement of absenteeism fits in with interest in human capital.

15 IBC (2002) Corporate social responsibility: Law, regulation and liability, taken from the proceedings of the conference held in London, November 2002 16 Mansley, M. 2002. Health and Safety Indicators for Institutional Investors, Report to the HSE, Claros Consulting

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1.3.2 Feedback on HSC Health and Safety Reporting Guidance

Feedback from the Top 350 companies on HSC’s health and safety reporting guidance5 flags up some concerns and gives useful information e.g. it is difficult to report on non-RIDDOR reportable injuries or costs of occupational ill-health and injury in any sort of consistent way. Some feel that it is not possible to distinguish between ill-health in general and ill-health caused or exacerbated by work. One response points out the potential incentive to under-report if these figures are in the public domain.

Many have concerns that rigid requirements will not allow enough flexibility for them to report the true picture in their company, one giving an example that their key indicator was collective radiation dose.

Also one respondent commented that given a lack of stakeholder interest in health and safety it is not clear who the audience is for this information.

Most, however, are content with the principle of reporting and many are entirely happy with the content suggested. Some would rather not see detailed reporting in their annual report. They would prefer to disclose in detail via their social and environmental reports or a separate health and safety report.

1.3.3 Summary of Requirements

It is apparent from previous research and feedback that there is demand for an index that is valid and feasible, and that:

• Fits in with other CSR schemes and avoids duplication;

• Incorporates standardised performance measures as well as process measures;

• Enables comparison and differentiates between companies (possibly reflecting/catering for sector differences);

• Reflects the global nature and needs of firms;

• Provides a variety of options for use, allowing for varying resource availability on the part of users;

• Is not unacceptably demanding in terms of resources;

• Ideally, is compatible with furthering the broader aims and objectives of Revitalising Health and Safety; and

• Is acceptable to all stakeholders.

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2 REVIEW OF PREVIOUS RESEARCH AND INDICATORS

2.1 Summary

This part of the report summarises:

• The definition and evaluation of options identified from previous research and previous consultations;

• The lessons learnt from previous research and other indices.

As part of this we have considered whether there are gaps in the range of feasible indicators currently available.

At this stage in the study we have restricted the review to those indicators that have been suggested or reviewed in previous studies. Also, the evaluation is restricted to the findings and stakeholder feedback from previous studies.

The evaluation of indicators assumes that any index which is recommended for implementation in the short term, such as within one year, would need to rely on data and information that organisations currently collate or could practically collate using existing data. Accordingly, we have sought to identify those indicators that organisations could implement in the short term. At the same time we have identified indicators that could significantly improve the standard of an index and identified what steps are required for the development of such indicators.

The following studies and bodies of information have been reviewed:

• Responses to HSC’s ‘challenge’ to top UK companies to report publicly to a common standard on health and safety issues;

• Feedback cited in the Claros study;

• The feedback from HSE-commissioned evaluation and cost-benefit studies regarding the availability of cost and injury information in firms, such as the evaluation of the PABIAC initiative;

• The results of HSE studies on the level and quality of, for example, reporting of injuries that should be notified under the RIDDOR regulations.

2.2 Stakeholder needs The following points can be drawn from the previous study by Claros and feedback on the HSC’s challenge.

Leverage through other non-financial actors

The aforementioned Claros research makes a good argument for a health and safety index to help engage financial stakeholders, and shows the various requirements of investors (e.g. risk to investments as well as socially responsible investment (SRI) issues, varying levels of information etc.). It seems likely, however, that other agents of change will be able to make use of such an index. A key need is, therefore, to understand their likely needs for what a health and safety index should do, as well as its usability and their preferences for practical implementation.

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One key group, of course, are the managers themselves. Business in the Community (BitC), amongst others, emphasise the role of an index not just as a tool for external stakeholders, but also as a tool for managers to measure their own progress and to set themselves specific objectives for improvement. It is important that the index doesn’t introduce perverse or unhelpful incentives e.g. the appointment of a director leading to “scapegoating” in a company’s attempt to improve their rating. In short the index should be a tool to assist managers as well as outside agents and their views should be sought.

A global applicability

As the Claros report points out, many UK companies have operations abroad. Both from the perspective of health and safety risk management and social responsibility, many users of the index are likely to wish to have an indication of companies’ global performance. This raises issues of comparability of indices across countries and cultures. Some sectors and companies have already been grappling with the issues raised in attempting to compare performance internally between various operations in different countries.

Compatibility with existing reporting measures

There is a need to avoid unnecessary additions to what is perceived as a plethora of CSR indices, which firms already complain measure them in different ways. Ideally a health and safety index would have an integrated, or at least a set of measures compatible with, a recognised (preferably dominant), method of CSR reporting and indexing. However, it would seem that there is less consensus on social reporting than environmental so this needs to be explored in detail.

CSR and corporate responsibility are now increasingly seen as one and the same, so an index must look at health and safety in the widest sense of impact on people and not just risk to the firm.

It should also acknowledge that there are a range of financial indices used by risk analysts and investment banks to characterise companies. These can be used, not only for ideas of format and implementation, but also to draw on lessons learned in the experience of using and developing them.

Index validity

The index must be, as far as is possible, evidence-based i.e. that there must be good evidence (or at least a very broad consensus in the health and safety profession) that the indicators chosen do indeed correlate with health and safety performance, and that the suite of indicators making up the index give an adequate picture.

Acceptability

As well as validity there is a range of issues around acceptability of the index. For instance, many stakeholders want to see an index that is not only valid but also has a certain face validity i.e. that they can understand the relationship between their Index score and their own performance. Others want to see an index that they can be confident will predict health and safety outcomes.

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There is also a potential difficulty with stakeholder buy-in and fears about the use of the index. Some may interpret something backed by the HSE as simply a regulatory tool. There may be concerns that if they get a low score then HSE (or another regulator) may take action. The method and implementation should address these issues.

Furthering government aims

As well as compatibility with CSR indices, indicators would ideally also be compatible with and/or encourage action to contribute to the wider aims and objectives of Revitalising Health and Safety so that a company’s rating is likely to rise if, for instance, they set “Revitalising” type targets, or provide rehabilitation.

Practicalities

The feedback from the Top 350 reaffirms the difficulties of gathering cost data and the great need for standardised measures of accidents and ill-health. Care must also be taken that where quantitative indicators are used they are meaningful. For instance, with the possible exception of the largest companies, the fatality rate is unlikely to give any valid indication of management and performance.

Implementation

From the stated needs of the financial investors it is already clear that, to be most useable by them, the index needs to be flexible in terms of the level of information required to rate an organisation. Various levels of information/verification are required ranging from some that do not have resources to investigate in detail and will accept simple disclosure by the board, to others who are prepared to do extensive research.

2.3 Initial review of potential health and safety indicators

2.3.1 Overview

Traditionally health and safety has been measured with one indicator of failure – injury (and less often, ill health) statistics. These are important measures of performance but their narrowness contrasts with many other areas of business where measures generally include positive success measures. Many organisations do now recognise the range of limitations in lost time injury and illness, such as under-reporting; injury rates not reflecting the potential severity of events; low injury rate reflecting few people exposed and luck rather than a well-controlled hazard etc. So, innumerable organisations now use additional measures such as auditing tools to measure performance in a whole range of management and risk control activities, outputs and outcomes. So, it is now widely established that to have a valid measure of performance a range of indicators should be used, which are not limited to outcome (failure) measures, and the design of this Index takes this into account.

Indicators can be split into a number of types:

• Process indicators, such as assessment of management systems;

• Performance (or outcome) indicators, such as injury rates;

• Financial indicators, e.g. cost of injury claims

• Compliance indicators such as fines etc.

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It is also possible to differentiate between indicators that measure:

• The risk posed to the organisation by adverse health and safety events, and;

• The risk posed to employees, members of the public, contractors etc.

It is also important to understand the range of health and safety hazards that need to be measured for a comprehensive and valid set of indicators to be developed. Consideration of the range of impacts indicates that the following range of health and safety risks should be included:

• Employee workplace injuries;

• Employee work related ill-health, including acute and latent health hazards;

• Public health impacts;

• Low frequency major accidents, such as major explosions;

• Contractor health and safety;

• UK vs. overseas performance;

• Staff welfare.

A review of past research and reporting requirements provides a list of possible indicators, as summarised in Appendix C on “Examples of industry specific indicators”.

Feedback from previous consultations on these indicators and the lessons learnt from previous research has been drawn together to provide an initial evaluation of the potential indicators against the following criteria:

• Feasibility / resource requirements;

• Validity –does it provide a true and full measure of performance?

Key findings are summarised in Table 1. Each potential type of indicator is critically reviewed below.

2.3.2 Process indicators

Key management indicators

It has been suggested that an assessment of an organisation’s health and safety management system is the best indicator of future performance. A number of suggestions have been offered on what such as measure could comprise. One option is to specify a small number of key management indicators, such as the level of health and safety representation on the board. This would entail assessing an organisation against a small set of indicators of how well it manages health and safety management, such as:

• Existence of a policy;

• Completion of a comprehensive risk assessment;

• Setting of improvement targets;

• Extent of internal health and safety reporting to the board;

• Level of health and safety representation on the board;

• Extent of internal auditing and performance review;

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• Extent of employee involvement in health and safety management and review.

Health and safety management system review

A further option that has been noted is the review of the design and operation of an organisation’s health and safety management system against an “audit” scheme. A practical alternative for some may be confirmation that the organisation operates against recognised health and safety management standards such as OHSAS 1800117 or its equivalent.

One option suggested by the responses to the HSE reporting challenge is to have as two options – assessment against a detailed question set or operation of a verified health and safety management system.

Clearly the more detailed an assessment, the higher the level of resources required.

2.3.3 Performance indicators

A number of studies and organisations use numerical measures of injury and ill-health. These are discussed in turn below.

Employee injury rates

It is reasonable to assume that all firms can identify and record the vast majority of work related injuries. Hence, if the method of calculating a rate is defined along with the definition of what is an “injury” it should be possible to derive a comparable measure of work related injury.

Injury has been defined as

• RIDDOR18 reportable “fatal” and “major” injuries;

• RIDDOR reportable “over 3 day” injuries;

• Any injury leading to specified minimum amount of lost time from work/normal job – variously 1 shift, 1 day, 3 days;

• Any injury requiring first aid;

• Any recorded injury (usually via the accident book);

• Work related road traffic accidents (sometimes including commuting accidents).

Methods of calculating rates include:

• Injuries per 100,000 employees, etc. per quarter, per annum etc.;

• Injuries per total person hours worked per quarter, per annum etc.;

• Injuries per person days/shifts per quarter/annum;

• Injuries per unit of production per quarter/annum.

However, it is necessary to recognise that:

17 Occupational Health and Safety Assessment Series – internationally recognised occupational health and safety management system specification. 18 Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (1997 in Northern Ireland) (RIDDOR). RIDDOR legally requires the reporting of incidents leading to defined categories of injuries, illnesses etc to the enforcing authority in the UK.

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• Whilst UK organisations should record all injuries which occur in the UK that come within the RIDDOR regulations, this cannot be assumed for overseas operations. Thus, whilst the use of RIDDOR definitions would support a UK performance index, organisations may not report overseas performance in a consistent fashion;

• Some firms record injuries involving one day lost time, first aid cases, all recorded injuries or only those involving more than one day’s lost time;

• The regulatory criteria for reporting injuries varies between countries;

• Hence, whilst a measure of injury rates should be possible there remains an open question regarding how best to achieve a comparable and reliable measure.

Concerns have also been cited that the value of any employee injury rate is reduced by: • The possibility that a low injury rate reflects the contracting out of high-risk activities;

• A general practice of under-reporting of injuries, particularly of less serious injuries;

• Injury rates being reduced by return to work practices, such as getting operators with a broken leg to undertake fictitious desk bound duties;

• Differences in sick pay arrangements, such as where the lack of sick pay for the first (say) 1 or 2 days of absence is associated with a low injury reporting rate.

One response to these concerns has been to restrict the injury rate measure to the rate of fatal and major injuries, wherein a major injury is defined by the type or severity of injury rather than the duration of absence.

As regards international comparison, it is pertinent to note that some countries include work related road traffic accidents as well as workplace transport accidents within their counts.

Finally, it is thought that:

• Any measure of injury rates does not provide an indication of how well low frequency major accident risks (such as major fires and explosions) are managed. Injury rate measures are thought to be limited to indicating personal safety performance;

• Injury rates are a reactive measure of performance, and hence provide only a partial view of performance.

Employee fatality rates

Whilst it is “simple” to identify and record fatal injuries, many organisations may go many years without a fatality, especially those whose operations pose a risk predominantly to health with little risk of death. However, the absence of fatalities whether due to low risk operations or good management may nonetheless indicate that there is a low risk of serious injury. Thus, whilst this would not by itself provide a sensitive indication of health and safety performance, it could be useful as part of a package of measures.

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Contractor injury rates

The status of the contractor, and the extent to which organisations report contractor injuries, affect the way in which contractor injury rates are calculated. Some contractors are very long term on site and are treated very much like employees. Others are only on site for the duration of a specific project. Sometimes information on hours of work of individuals is available to clients, more often not. This clearly affects the options available, but nevertheless they are similar to those for employees.

Contractor fatality rate

Again it is relatively “simple” to identify and record these accidents although this as an indicator of performance suffers the same weaknesses as employee rates. Additionally, companies are slightly less likely to systematically collect this information.

Absence rates

Part of the cause of absence is work-related injury and ill-health. Hence it would be possible to use a measure of absence as an indicator of ill-health. Options include:

• Days off per employee/100 employees etc. per quarter/annum;

• Shifts off per employee/100 employees etc per quarter/annum.

Only a very small minority of firms try to delineate absence due to work related injury/ill health from other causes of sick absence. Whilst most firms can easily provide a measure of sickness absence this does not necessarily directly measure work related ill-health and injury.

Rates of work related ill-health

Previous research and company feedback indicates that there are no commonly accepted reliable methods of detecting all types of work-related ill-health. In the UK certain diseases are thought to be well recorded under RIDDOR and the Industrial Injuries Disablement Benefit Scheme. However, these are a small minority of all cases.

It is considered that work related ill-health is not consistently or reliably identified and recorded in the UK, with the exception of certain prescribed diseases and conditions monitored under health surveillance regimes. This is particularly so in the case of latent and chronic conditions, such as noise-induced hearing loss and asbestosis. Indeed, the HSE’s own national statistics rely on surveillance of a series of reporting schemes operated by for example general practitioners and occupational health physicians. Such schemes have not been set up to support reporting of cases per company.

Mental ill health

Few firms, if any, accept that there is a commonly agreed definition of work related mental illhealth, nor do they identify or record such absences. Exceptionally a few firms record cases of staff recommended for counselling etc. There is also a concern that only firms with effective occupational health arrangements would identify and record cases of work-related mental illhealth. This could lead to the “better” firms reporting higher rates of mental ill-health than “poorer” performing firms. The absence of a legal definition of work related mental ill-health or mandatory reporting requirement is thought to mean that reporting in this area would be inconsistent and unreliable.

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Major incident and/or dangerous occurrence rate

Previous research has shown that the quality of management of low frequency major incidents is not necessarily indicated or measured by lost time injury or fatality rates. An option is to devise an indicator of the rate of major incidents and/or dangerous occurrences.

Some organisations, particularly those operating in major hazard sectors (such as railways and nuclear power generation) record and report the incidence of events such as train derailments, leaks of radioactive material etc. Indeed, there are regulatory requirements to report certain grades of incident. In some cases a rate of incidents is calculated that can be used to compare organisations within a sector, such as comparing between nuclear power generators.

However, some unaddressed questions include:

• Would the use of a major incident indicator be limited to ‘within sector’ comparisons?

• How reliably do organisations record such incidents?

• Would the low frequency of major incidents negate the value of such an indicator?

• Are such incidents reliably reported for overseas operations?

Such an indicator could be based on:

• The rate of major incidents per unit of production / movements / year, and /or;

• The rate of reportable dangerous occurrences / near misses etc. per unit of production / movements / year.

Examples of reportable incidents include:

• Train derailments;

• Release of hazardous materials;

• International Nuclear Event Scale (INES)19.

2.3.4 Coding of organisations at impending risk of “a major loss”

The Standard and Poor index provides a code for when firms are thought to be at risk of insolvency/major regulatory sanction. An analogous indicator of a major health and safety threat to the survival or profitability of a company has not yet been suggested. This is considered important because a number of occasions can be identified wherein an organisation has incurred significant loss or collapse due to:

• A critical audit by a safety regulator that undermines confidence in the organisation by customers, the public and investors – with significant direct remediation costs and indirect costs;

• A major accident leading to major direct costs and loss of confidence;

• Discovery of major financial liabilities such as asbestos compensation claims.

19 This was designed to communicate swiftly with the public in consistent terms regarding the significance of events reported at nuclear installations, and includes events at civilian nuclear installations, any event associated with radioactive material and/or radiation and to any event occurring during transport of radioactive material. This scale reflects experience gained from the use of similar scales in France and Japan, and is used in more than 60 countries.

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Clearly investors may welcome warning of a pending major financial loss or collapse of an organisation. This is also indicated as an “under watch” code for organisations whose financial health may be in doubt pending further disclosures.

An equivalent code could be devised for noting when there is a major threat to an organisation’s survival due to an actual, pending or high probability of a major financial loss or business interruption due to, for example:

• A major accident causing a major loss of life, damage etc – with associated major direct costs/losses and possibility of loss of confidence in the organisation safety capability;

• A critical regulatory intervention that has the potential to cause a loss of confidence in the management of the organisation with subsequent need for major reorganisation costs, loss of business etc;

• A threat to the “licence to operate”, such as a regulator proposing to withdraw an organisation’s operating licence;

• Discovery of major financial liabilities associated with (say) injury/ill-health compensation claims, at a level that threatens the organisation’s financial health.

For example, a code such as “MLP” for Major Loss Possible could be placed next to an organisation’s listing which would indicate that an event or liability has been reported that meets one of the above criteria.

2.3.5 Financial indicators

Employer liability claims

A number of interviewees pointed out it would reflect performance many years ago, particularly in relation to chronic ill-health cases which take some time to develop and where claims can take years to conclude. Also, this data is not currently in the public domain; employer’s representatives felt that their members would not be willing to volunteer it.

Health and safety expenditure

Such a rate is likely to be “amount spent per employee”. There is no agreement about how this could be implemented, in particular how the figure could be identified.

Feedback from the HSC challenge and HSE commissioned cost-benefit studies indicates that few firms collate information on their health and safety expenditures or even track the amount of staff time devoted to health and safety management. It is reported that many health and safety costs are subsumed within general budgetary headings, such as maintenance. Time spent on health and safety training is not necessarily identified, nor in some cases is it treated separately to a production activity e.g. training in the operation of dangerous machinery.

Also, some research has found that expenditure is correlated with risk, such that organisations operating higher risk activities tend to spend more, and incur higher costs of accidents. Thus, does higher expenditure indicate higher risk or a higher level of commitment and better management of safety?

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Cost of accidents and ill-health

Few firms track, record or collate information on the cost of accidents or ill-health. Of those who’ve tried, they report very mixed success. Also, low frequency major accidents would not be reflected in an annual reporting process.

The implementation of any cost of accidents indicator would require the development of a commonly accepted costing method, and the implementation of new data recording arrangements within organisations.

2.3.6 Compliance indicators

Compliance indicators

This would entail reporting the frequency of enforcement actions such as improvement notices and the cost of fines. They are simple to report and would perhaps be indexed against the number of employees. However;

• The frequency and cost of fines etc tends to be low and may reflect enforcement policy as much as company performance;

• Fines and prosecutions highlight failures and would not distinguish between “average” and “good” performers;

• Fines tend to be low.

2.3.7 Missing indicators

Review of past research and reporting requirements does not provide an example of an indicator for:

• Staff welfare;

• Public health impacts.

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GSB Index Final Final Report

Table 1: Initial evaluation of indicators

Option Feasibility Validity

High level management indicators

Key management indicators, Less resource intensive than a full Some evidence of links between certain H&S practice & performance e.g. existence of H&S directors, H&S management questionnaire H&S policy, level of reporting Some elements, such as a policy, are a basic legal requirement

Firms may appoint directors etc simply to get a higher score.

Self-assessment questionnaire Resource intensive but many audit High quality evidence of standard of management of health and safety type schemes already exist & are management widely applied

Numerical performance indicators

Number of fatalities Easy to measure Many organisations lack a statistically reliable number of deaths

Lost time injury rate (employee)

Easy for UK firms to collate (if use UK measure of lost time injury rates (LTIs).

Reasonable level of validity for “common” workplace injuries.

Does not necessarily measure major hazard safety performance.

Entirely reactive measure

Overlooks outsourcing of high risk activities

Susceptible to injury management practices

Contractor’s lost time injury Can be hard to measure, especially if large numbers of temporary rate major projects

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Number or rate of “major Untested Limited to risk of major incidents accidents”, e.g. reportable leaks

Rate / cases of work related ill- Reasonable Reasonable but risk of inconsistent reporting practices health, e.g. rate of back injury

Sickness related absence (contractor)

Difficult Harder to measure than even contractor’s lost-time injury rate

Sickness related absence Easy for UK firms to collate. Does not distinguish between work related and non-work related (employee) illness

Links into interest in human capital. Skewed by absence culture / moral etc

Skewed by sick pay arrangements

Financial indicators

Employer liability claims Reasonable, although prediction of outstanding claims uncertain.

Could provide indication of long tail health performance, especially of asbestos etc

Low cost may reflect aggressive claims management rather than better performance

Claims may be driven by external medical-legal changes

Influenced by claims management policy

Cost of injuries and ill health Poor feasibility. Costs are not recorded in a reliable manner.

Many costs are external to the organisation

Time spent on (e.g.) training Reasonable Poor validity as firms with more injuries and those operating in high risk sectors spend more.

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Expenditure on health safety management

and Poor feasibility. Costs are recorded in a reliable manner.

not Poor validity as firms with more injuries and those operating in high risk sectors spend more.


Prosecutions / notices Easy to measure Usually too few to provide a sensitive measures

Susceptible to changes in enforcement policy

Fines Easy to measure Usually too few to provide a sensitive measures

Susceptible to changes in enforcement policy

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2.4 Lessons learned from environmental and sustainability frameworks 2.4.1 Measuring performance

“Measuring (environmental) performance per se does not drive results. What drives performance is a company’s (environmental) policy, strategies and objectives”20.

It has been shown that performance beyond regulatory requirements stems from a commitment of an organisation’s senior management to performance leadership, be it in relation to the environment, health and safety, quality or corporate citizenship, in that the operations and facilities of the organisation are conducted with sensitivity to these parameters. This may be undertaken for a number of reasons, including a desire to “do the right thing”, the influence of various stakeholders that demands a change in behaviour by the company, or from a perceived opportunity to create competitive advantage.

Typically, companies have used environmental performance measurements as components in their environmental management system (EMS) toolbox to assist them in meeting set targets as well as using them as a means to communicate performance to an array of stakeholders. Such measurements articulate policy objectives, making them more visible both internal and external to the organisation. Tying this to other aspects of business operations ensures that the responsibility assigned demands the demonstration of results. This has proven to be the adage of the EMS movement, in that “what gets measured, gets managed”, with evaluation and the use of measurements being an integral part of that framework.

The advantage of an index is that it provides a catalyst for continuous improvement. It also ensures that measures are in place to demonstrate that improvements are substantiated on more than mere anecdotal evidence. However, the use of an index does not necessarily imply that improvements will automatically be achieved each and every year as there are many factors that may impede such success, e.g. financial, operational or other constraints. An important facet of an index is in the potential to facilitate opportunities for communication, with either internal or external stakeholders to the company. It is important that linkages are made beyond the immediate focus of an index and its set of indicators.

In the study of the use of a performance index undertaken in Niagara Mohawk Power Corporation (NMPC) in the US21, the following conclusions were drawn: • Indicators developed do not need to be “perfect”, rather that they should aim to be accurate

enough such that they can detect significant shifts in performance;

• Indicators developed should be designed with the major stakeholders in mind, both internal and external to the organisation;

• An index as a tool is of little value to an organisation unless targets are in place;

• One of the major aims of an index is to increase awareness and focus attention on achieving results in that area on a continuous basis – measurement is not for its own sake, but to stimulate improvement in performance.

20 Miakisz, J.A. 1999. Measuring and benchmarking environmental performance in the electric utility sector: The experience of Niagara Mohawk, in Sustainable measures: Evaluation and reporting of environmental and social performance, Bennett, M. & James, P. (eds.), Chapter 10, pp. 221-245 21 ibid.

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2.4.2 Reporting frameworks

Organisations within all sectors are increasing the level to which they provide a public account of their activities and relations with their stakeholders, whether they be employees, customers, investors, business partners or governments, as well as in relation to the communities and society at large in which they operate. How this is achieved may take any of a number of forms, and will be targeted to either internal or external audiences. Some of the more common channels are listed below: • Inclusion of softer issues within the financial report;

• Separate social and sustainability-type report, e.g. SHE report, CSR report, etc.;

• Materials on websites, PR and recruitment materials;

• Procurement specifications.

Often in terms of communications to the public at large there is a reliance on a more standardised approach. The Global Reporting Initiative (GRI) is the most often cited, and that in recent time has been linked to the 9 principles of the UN Global Compact. However, it is important to note that other industry and national reporting guidelines are in place or are in the process of coming into effect. Within the UK examples of this include the Business in the Community Corporate Responsibility (CR) Index and the Operating and Financial Review (OFR). These are outlined below.

2.4.3 International frameworks

Global Reporting Initiative (GRI)

In 1997 the Coalition for Environmentally Responsible Economies (CERES) in partnership with the United Nations Environment Programme (UNEP) convened the Global Reporting Initiative with the aim of elevating sustainable reporting practices to a similar level as that for financial reporting. This has resulted in extensive dialogue that culminated in the release of the first version of the GRI Reporting Guidelines in June 2002. Earlier in that same year, the GRI became a permanent institution located in Amsterdam.

Indicators for reporting on health and safety can be found within the social performance section under the title of “Labour practices and decent work”. A list of those indicators from the GRI most relevant to reporting on occupational health and safety are covered in Appendix B.

Some sectors are in the process of developing supplements, namely for the automotive, financial services, mining, telecommunications and tour operators; and another wave of initiatives are expected to be launched in the future.

UN Global Compact In July 2000, the Secretary General of the UN challenged business leaders to support 9 principles in the arenas of human rights, labour and the environment. This initiative aims to unite the private sector with social actors in collectively addressing the challenges of globalisation on society, and to ensure a more sustainable and inclusive global economy. This is a voluntary initiative and not a regulatory instrument, i.e. there is no enforcement or measurement. Four of the principles address labour issues, but not heath and safety, specifically addressing the following aspects:

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• The right for workers to uphold the freedom of association and the effective right to collective bargaining;

• Elimination of all forms of forced and compulsory labour;

• Effective abolition of child labour;

• Elimination of discrimination in respect to employment and occupation.

There are 5 more principles which reflect aspects of human rights and the environment, and health and safety issues are implied, e.g. principle one reflects the need for business to support and respect internationally proclaimed human rights and therefore notes that:

“Workers who are treated with dignity and given fair and just rewards for their work are more likely to be productive and remain loyal to an employer. New recruits increasingly consider the social and environmental record of companies when making their choice of employer.”22

2.4.4 UK frameworks

Business in the Community’s Corporate Responsibility Index In March 2003 the first Corporate Responsibility Index by Business in the Community (BitC) was published listing 122 companies, with more than 50 percent coming from the FTSE100. This was developed after it was identified that “…there was no authoritative, voluntary, CSR initiative that is business led and engages with companies from all sectors, publicly ranking their CSR activity, whilst consolidating information demands made on companies”23.

The intention outlined by BitC is to provide a systematic process whereby the company’s management processes and performance can be compared with others in their sector. The results of the index are presented in quintiles, and the companies are listed alphabetically. This strategy is used to introduce a level of competition and differentiate performance, but also aims to encourage companies to take part.

The company is placed within a quintile based on the overall score determined in the areas of: • Strategy;

• Integration;

• Management practice on community, environment, marketplace and workplace (including occupational health and safety among other issues e.g. gender, diversity and disability);

• Performance in seven impact areas;

• Level of assurance provided.

In addition A, B and C profiles are assigned to indicate how well companies are managing their corporate responsibility but this does not relate to any of the seven impact areas or assurance section stated above.

A recent report24 produced by BitC highlighted the following key learning points highlighted in the review of the first year of the Corporate Responsibility Index:

22 UN Global Compact. 2003. The Nine Principles. http://www.unglobalcompact.org/Portal/ 23 Business in the Community. 2003. First Corporate Responsibility Index 24 Business in the Community. 2003. Indicators that Count. www.bitc.org.uk

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• Collecting and submitting data provides internal leverage to improve CSR management and reporting;

• Not all issues are materially important to companies, and management and reporting are improved by focusing on what is significant to the company or industry sector;

• Most companies appear content to select possible indicators from a broad range rather than just rely on one source;

• Not all impact measurement and reporting can be reduced to “numbers” but require context and qualitative statements.

As a result of these findings, revisions have been made to the corporate responsibility index in relation to the indicator set and framework.

Operating and Financial Review The White Paper on “Modernising Company Law” published in July 2002 accepted the recommendation that “economically significant companies” be required to prepare an Operating and Financial Review (OFR). The framework of such a review would be to provide “…a discussion and analysis of the performance of the business and the main trends and factors underlying the results and financial position and likely to affect performance in the future, so as to enable the members of the company to make an informed assessment of the company’s operations, financial position and future business strategies and prospects”25. It is suggested that what is included in this assessment of the business will be at the discretion of the directors as well as how these factors are addressed. However, guidance will be provided for the directors to determine whether an item is material to their company and therefore necessary for inclusion in the OFR. Providing guidance on what constitutes materiality is the current work of a small group of independent experts, who are developing broad principles and practical guidance, and are expected to produce a report late in 200326.

As part of the development of this report, the DTI has consulted broadly, and the HSC responded formally to the consultation document “The Operating and Financial Review Working Group on Materiality” urging them “to include health and safety as a specific topic for company reporting to make clear that health and safety is an important element of the Government’s commitment to developing sustainable work and communities”27

FORGE Guidance on Corporate Social Responsibility Management and Reporting for the Financial Services Sector This guideline document produced in 2002 was developed by eight financial services companies for their sector and received support from three government departments and key stakeholder organisations. The guidance seeks to: • Explain the drivers of CSR and recognising it as a source of business risk and opportunity;

• Highlight the complex and integrated nature of CSR issues and identifies challenges an organisation might face in implementation;

Operating and Financial Review Working Group Terms of Reference, 2002, DTI, http://www.dti.gov.uk/cld/terms.pdf 26 For further information see Department of Trade and Industry. 2002. Operating and Financial Review Working Group Terms of Reference, http://www.dti.gov.uk/cld/terms.pdf 27 Letter from Bill Callaghan, HSC Chair to Rt. Hon. Patricia Hewitt MP, Secretary of State for Trade and Industry, 2 September 2003.

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• Provide practical advice on implementing CSR management and reporting processes throughout the organisation.

The guidance document was developed in response to the priorities of business in this sector with a focus on the UK environment. This guidance also builds on the “Guidelines on Environmental Management and Reporting for the Financial Services Sector” that was developed by the FORGE Group in 200028. The primary audiences for this guidance are the individuals and teams within the organisations responsible for implementing and managing CSR with action points identified within functions, products and services. As a result, health and safety issues are mentioned within the guidelines in relation to functional areas of organisations, such as procurement and human resources.

2.4.5 The SRI community

In part, the increasing value attributed to CSR reporting has come about as a result of the concept of socially responsible investment (SRI). In the UK alone, this type of investment has grown substantially in the last five years. It has been suggested by industry that investment in SRI accounts for more than $3 trillion which represents upwards of 13% of total funds under management and have grown by 82% since 1998.

An overview of the “SRI Community”29

Category Purpose Examples SRI fund managers • Manage funds

• Most no longer sending out questionnaires, except for special topics

Insight, Morley30 , Henderson, Jupiter, ISIS

Indexes • Publicly available indexes of CSR aimed at raising the profile of the issue

• Provision of basic indicators to investors

SAM / Dow Jones Sustainability Group Index, FTSE4Good31 , BitC’s Environment and CR indexes

Rating agencies • Conduct general research on business value for equity investors and credit

Innovest, CoreRatings, SERM, Trucost

providers • Provide ratings for investors and

companies • Funded by subscription and research fees

SRI research • Conduct broad research into CSR issues EIRIS, Manifest, PIRC, organisations and performance for diverse “ethically

driven” investors Triodos, Storebrand

• Provide screening of portfolios for clients against these clients own criteria for “ethical”

Pressure groups • Survey companies on particular issues Consumers Association, Naturewatch

For more information on these documents, please refer to the website http://www.abi.org.uk/forge/default.asp 29 as taken from Arthur D Little. 2003. Speaking the same language: Improving communications between companies and investors on corporate responsibility, in conjunction with BitC and UKSIF, available at http://www.bitc.org.uk/docs/Speaking_the_same_language_report_2003.pdf 30 See Appendix G for an overview of two fund managers as examples 31 See Appendix G for an overview of two global indexes as examples

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Some investment companies now have full time CSR analysts whose task it is to determine the social, ethical and environmental performance of any given company. In this way, socially responsible investment funds are seeking to add value to shareholders.

In a recent report by ADL32 for BitC and UKSIF, the following issues in relation to corporate responsibility and the SRI community were raised: • A common desire to raise communication of the business value of CSR;

• The issue of materiality and the need for greater clarity in relation to shareholders;

• Direct engagement provides greater insight into companies and their performance in relation to CSR;

• Though standardisation of information is desirable, the market is at present too diverse;

• Improvements in transparency is required by both companies as well as by analysts;

• Promoting CSR as a key to improved evaluation of shareholder value.

2.4.6 Lessons learned

There are a number of important elements that can be drawn from the above examples that can assist in the development of a health and safety performance index that are notable, namely considering: • How the indicators will ensure credible, comparable, standardised information;

• How to ensure that the index is transparent to participating companies and other stakeholders;

• How will the indicators be weighted, e.g. categories (quintiles) or box ticking;

• How will information be gathered from the company, e.g. questionnaire, online, etc;

• Whether information needs to be verified;

• How sector-specific issues be addressed within the index;

• How will the outcome be communicated, e.g. name and shame or list of the top ten most improved, or in group categories;

• How issues of the global nature of business activities are addressed, e.g. country and sector specific issues;

• How will this information be complementary to other initiatives regarding CSR and external reporting, e.g. GRI and changes to Company Law in the UK in particular;

• How will this be translated by organisations as a useful lever to bring about improvements/change?

32 Arthur D Little. 2003. Speaking the same language: Improving communications between companies and investors on corporate responsibility, in conjunction with BitC and UKSIF, available at http://www.bitc.org.uk/docs/Speaking_the_same_language_report_2003.pdf

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3 EXPLORATORY DISCUSSIONS

3.1 Introduction

Some initial ideas for a health and safety index were drafted on the basis of the review of previous research and other indicators. The ideas were circulated to a sample of stakeholders for discussion. The materials circulated are shown in Appendix A. Discussions covered:

• What are your needs?

• What suggestions do you have for indicators?

• What problems have you encountered with previous H&S reporting schemes?

• What is your opinion of the initial options we have identified?

A wide range of consultees (representing 24 organisations) were interviewed, including potential users (i.e. organisations who would complete the forms), employer and employee representative bodies, pressure groups, health and safety specialists, insurers, investors, and CSR specialists. Discussions were completed mostly face to face, with clarification of points by further correspondence.

3.2 Summary of feedback 3.2.1 Support for an index

The overall response to the index was positive, though some interviewees were cautious in discussing the role that an index would play. In discussions, the index was considered at two levels: one which considered the role of the index and its overall intentions; the other which considered the choice and formulation of indicators.

Interviewing a number of senior health and safety managers from within companies who would be the potential subjects of this index provided much support for the development of an index in relation to the perceived gap regarding guidance on external reporting of health and safety issues within the workplace. All saw the value of using such an index to measure performance both within the company as well as a tool to benchmark the company against others to determine whether they are as good as they might believe themselves to be. Another strong aspect that was associated with the creation of a performance index would be the ability to provide show cases of companies succeeding at addressing health and safety at a strategic level.

3.2.2 What role do you think a health and safety index should fulfil?

Amongst employers and trade associations there was a general consensus that it should provide a lever for improvement, though there was some pessimism from one about the efficacy of an index in motivating managers. Indeed it was suggested by one consultee that it would be of most interest to victim groups, some investors and some employees rather than management. It was also presented that most organisations are good at developing policies, planning and implementation, but are much weaker when it comes to the aspects of monitoring, auditing and reviewing, which implies that they are slow to learn.

Some health and safety specialists felt that a transparent and reliable index would assist companies in improving their reporting ability by providing a standardised reporting framework. It was felt that there is a need for companies and other external stakeholders to benchmark companies against one another which would also provide a lever for improved health and safety performance.

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The potential role of an index to provide a good measure by which workers and the public can assess the quality of a health and safety management system employed by an organisation creates a positive incentive for companies not to be positioned near the bottom was broadly recognised. However, there was some concern that an approach that threatens to “name and shame” poor performing companies has been shown to be less effective in motivating such companies to improve. It was stressed by a number of subjects that though the index would be a challenge, it would serve to give more drive to health and safety and within the context of CSR this would be a powerful argument.

3.2.3 What does your organisation need from a health and safety index?

There is recognition from a number of stakeholders that, in general, information on a company’s health and safety profile exists within the public domain in various formats, though the level and “usefulness” of the information made available differs quite substantially and can often be dependent on which industry sector you are considering. A more standardised approach to the presentation of health and safety information would be welcomed, particularly for those stakeholders not particularly familiar with health and safety who are interested to assess company profiles in relation to risk.

From the perspective of companies, employer representatives stressed the need for the index to illustrate benefits to companies, such as contributing to experience and knowledge. Realistically, companies will not bare their “dirty linen” voluntarily. It was also stressed that it is important to recognise initiatives already being undertaken within some sectors, e.g. Responsible Care within the chemical manufacturing industry. There was some concern regarding the establishment of a health and safety index, with a comment being made to the effect that there was more value in initially drawing attention to the issues underpinning an index.

From the perspective of financial representatives, the index is a tool that would have much value in promoting internal management of risk within the company. This comment was mirrored by other stakeholders involved with CSR and SRI in that they believed the index should provide an argument to empower change within a company, which is often best accomplished by presenting financial advantages which demands that links to a financial bottom line are disclosed.

Employee representatives require an index to be a credible tool for members to use and advocate change in the workplace. There was a suggestion by a health and safety award-giving body that its award programme would be aligned to indicators used in the index. It is important that the indicators in the index are transparent, informative and enable creativity in their implementation.

Overall, there was much consensus in that the index would need to provide a credible and comparable insight into company operations. In this way, it was argued that the index would be best served being holistic in its approach and considering issues that are within the control of the company/employer. The extent to which the index should be transparent was a more debated issue.

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3.2.4 Should the index reflect performance of overseas operations of UK firms?

Employer representatives commented on a number of aspects relating to the implementation of an index. The approach, particularly reflected in the language used in the index, is an important consideration not only in that though the index may be initially limited to the UK market, it will be available internationally and will have some impact. Recognition must be given to the fact that many global companies have to grapple with different national reporting requirements which demands much internal development, and this issue has appeared in relation to health and safety reporting particularly with respect to reporting in high hazard industries, e.g. chemical.

As it is, the remit of the HSE is only in the UK, though the index could be useful in determining whether or not UK performance was better, on par or below overseas performance in health and safety, and should it be lacking in certain areas, could provide the lever to help improve.

One interviewee pointed out that a UK citizen can be prosecuted in the UK for manslaughter committed abroad and therefore, in some instances, UK legislation can be brought to bear over some events.

A few interviewees also suggested that attempt be made to include aspects relating to the supply chain. However, it was noted that this could require the index to account for SMEs, which at this point was considered by one stakeholder from the SRI community as “biting off too much”. Both the consideration of an index for SMEs and the inclusion of supply chain could be put on the list of recommendations for next steps.

A number of the subject interviewees were content for the index to focus on the UK for the time being, and in a couple of cases the issue of fairness was acknowledged, but they appeared to be comfortable with an approach that was practical.

3.2.5 What types of areas do you think the index should cover?

Positive measures of health and safety performance should be the priority, though it is acknowledged that sometimes these are impractical to obtain e.g. numbers of accidents avoided. It would be considered ideal by employee representatives if all injuries and ill-health of staff engaged in company activities, including travel by any mode, and potentially also home working, were to be calculated and covered. It is acknowledged that there are inconsistencies between recording any injury incurred during commuting to/from work in the UK, like the USA, but unlike some other European countries, where this is included in the figure, e.g. Germany and Switzerland. Owing to differences in the nature of insurance premiums in the UK, this is unlikely to change in the foreseeable future.

Many employers and health and safety specialists accepted that work-related travel, where it was under their control, should be included in their performance rating. In addition, a number of interviewees felt that staff travelling for company business would be an area that should be incorporated, if not in the initial index, it should be part of the next steps.

A couple of interviewees stressed the value of making the index as holistic in its approach to health and safety management in order to create flexibility to companies to expand beyond regulatory requirements, and to avoid excluding issues that are currently beyond the scope of health and safety reporting.

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A couple of subject interviewees suggested that greater account should be taken of employee engagement and a business culture that is more accountable, in that health and safety is not reliant on instruction from the Board (command and control). This is consistent with the concern that performance indicators do not tell the whole story about the company’s health and safety. There are definite benefits to employees seeing health and safety as part of the company philosophy, as well as for the company from the standpoint of recruitment and retention. This, in turn, has spin-offs for their reputation.

All consulted believed the performance of an organisation’s contractors should be included in the index, although they acknowledged this took a lot of work. Many potential users are already grappling with this issue.

3.2.6 Comments and suggestions regarding proposed indicators

Overall, interviewees agreed that with the choice of categories of indicators, i.e. being process, performance, financial and compliance orientated, although not all indicators under each heading were considered acceptable. Within this, there was agreement as well that there is a need to ensure that the performance measures are related to inputs, outputs and outcomes. Verifiability was sited by many as being an important consideration in defining indicators, in that they should be traceable to management and operations. According to IOSH desirable characteristics of performance indicators are that they are well-known, not difficult to collect or determine, are quantifiable in units that are comparable and are not too numerous.

Directors’ Declaration Overall, this was considered a good idea. It was suggested that it should capture that there are regular assessments of health and safety at Board level, even if health and safety is not the responsibility of one director. There was some cautioning that this could be misread as a health and safety policy, and this could therefore present an argument for a company signing up to a set of guiding principles.

From the perspective of health and safety representatives, there was also a concern that this was of little value as any company could provide this with no guarantee. It was suggested, rather, that emphasis be placed on indicating the level of understanding and importance directors place in managing health and safety and what is required for continuous improvement to be assured. Another proposed strengthening the indicator by including a requirement that the Board had undertaken an assessment of health and safety risks.

Management Indicators Virtually every interviewee was positive to the emphasis placed on management indicators within the index. It was suggested that the management indicators could be grouped according to those that reflect governance issues, e.g. senior manager responsible for health and safety, health and safety policies, and those that capture management aspects, e.g. consultation, implementation, risk assessments. A next step some suggested would be to recognise those companies whose management systems are verified by an independent third party. However, the limitations of auditing a management system were also acknowledged by many different stakeholders, particularly as it is a paper-based exercise and does not necessarily capture the company’s ability to manage and control the significant health and safety risks to people.

It was noted by an employer representative organisation that it is important to capture how often health and safety is being assessed by the company board. In this way, it is not the responsibility of a single senior manager, but the entire board. In addition, responsibility to implement policy demands a good functioning line management, which often links different units, e.g. accounts and operations. Furthermore, it was suggested that a number of possible

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indicators could be created that would be linked to legal requirements e.g. in relation to risk assessments, policy etc, but it was acknowledged that this posed many difficulties. Another suggestion could be determining whether or not a company has an action plan, and to what extent it is costed and monitored, and whether or not this results in continuous improvement.

There was some concern that compliance with a management system does not say anything more than there is a system in place. However, an industry representative acknowledged that they encouraged third party verification of management systems, such as Eco-Management & Auditing System (EMAS).

A potential subject argued that a degree of proportion should prevail within the index, in that how much time should be taken to do a risk assessment of a largely office-based environment. This interviewee believed that an indicator in relation to determining the company’s health and safety management review would be the most rigorous but bureaucratic (burdensome) of possible process indicators. There would also be problems with determining how robust the review would be as would need a recognised standard. A similar problem would be encountered in terms of auditing in that the number of RIDDORs is easier to verify than any qualitative indicator.

One health and safety practitioner made a few suggestions regarding management indicators in that they should be more qualitative and reflect levels of communication and implementation that capture responsibility. An interviewee from SRI suggested that the process indicators be broken down into two categories, namely governance, that would include aspects relating to accountability and policies, and management, which should reflect implementation of risk assessments and consultations. Further to this, it was suggested that a meta-indicator could be included that could address the issue of transparency/disclosure which varies significantly between companies and sectors of industry.

Performance indicators Currently, indicators are limited in that they mostly output derived and report failures, and in this way are linked to past events and are not related to major hazards, as was pointed out by the regulator. In relation to determining the risk health and safety poses to a company, it is important to check that the management system and procedures in place are working and successful in reducing this risk.

The regulator also suggested that indicators related to fatal injuries and major injuries should be combined as there is an element of luck as to when a major is not a fatal. This would also arguably present more meaningful numbers. This number would further be made meaningful if it is presented in relation to workers, and not simply staff, in order to capture contract staff.

A problem often experienced with recording employee injury rates is that they are often small in number, and to obtain any sense of their significance within the company demands that there be a time series. Smaller companies face the dilemma of a distortion when compared to larger organisations. Another problem associated with quantifying such rates is that they must be verifiable. The advice is to use RIDDOR framework, though this only applies in the UK, with the US, for instance, using a slightly different reporting framework. Distortion will occur between sectors, e.g. financial services compared to construction, as by the very nature of work undertaken. A similar concern is made in relation to subcontractors.

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If the index is to be considered for overseas operations, differences in culture should be borne in mind during design. There are differences in reporting between OSHA and RIDDOR frameworks. In addition, it was noted by IOSH that within the UK 98% of companies employ fewer than 50 staff, and so incidence rates at 100,000 is not adequate. In one case it was suggested that it should rather reflect a ratio to 100 staff. Another suggested that this distortion would be more of a problem for SMEs and would demand time to build up an internal register/time series. SMEs also differ from large organisations in that they tend to have low “over three day” rates as they are reliant on staff returning to work as soon as possible, as was noted by a health and safety specialist.

Another possible problem cited by a number of interviewees related to the verifiability and problems associated with an indicator of work-related ill health, in that it is proving very difficult in some cases to accurately determine what ill health is work-related. Some advised sticking to the RIDDOR framework (see points on health below). One subject interviewee showed an interest in recording behavioural and attitudinal changes to health and safety, e.g. what is the proportion of injury to non-injury accidents reported. They also believed that this would substantiate the “near miss” reporting and be insightful into the culture of the organisation.

In terms of considering the length of absences, it was suggested that this represented a combination of information on the severity of the injury with the effectiveness of the rehabilitation. However, it was also noted that reporting on more detailed measures are likely to be more onerous to collect. One health and safety specialist interviewed stated that a majority of companies use lost time injury rate as a health and safety performance indicator.

Contractors and Subsidiaries On the whole, it was felt by a range of interviewees that subcontractors should be included. However, there was some disagreement as to whether or not it was morally justifiable that a different weighting be used for employees as opposed to contract workers. An employer representative stated that many of their members did have information on contractors’ occupational health, and in addition this association has an established forum which enables members to share information on this.

Another issue that was raised was subsidiaries. It was suggested that where a parent company owns more than 50% of a subsidiary, the information on the performance of that subsidiary should be included in the parent company’s performance. A number of interviewees from the financial sector also raised the fact that mergers and acquisitions would need to be taken into consideration.

Health Generally, it was acknowledged that there are no good means of quantitatively recording health currently in use, and that any development in this area would be most welcomed. Some industry statistics are put out within the UK annually, e.g. the Chemical Industry Association (CIA). Generally, awareness around some issues relating to employee health, e.g. stress management, work-related upper limb disorders, are monitored by some companies, but there is no standardised approach in place.

Sickness absence management is more established in larger companies, and it was suggested that there must be some sensitivity in discussing these figures, but that it would be too difficult to attempt to break it down in categories of work-related absence, and therefore it is better to manage absence in general. Companies reporting in relation to CSR can capture the issue of absence and work/life balance in terms of the workplace, but these figures tend to be reflected

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more often qualitatively than quantitatively. This is primarily as a result of the difficulty in providing verifiable information.

It was acknowledged that on a broad level, sickness absence rates do illustrate something about how a company is managing its business, e.g. 15% or 1%. At the same time, a health and safety specialist declared that a number of employers are requiring some guidance on how best to interrogate information on absence to get a better feel as to what is work-related ill health. It is also important to consider how to address the probable short-term aspect that, with better employee education and training on work-related ill health, employers face the strong possibility that absence will increase initially.

A few interviewees mentioned that ill health can be brought about as a result of a combination of factors both personal and work-related, and they could not see this being overcome by a single indicator. Therefore the suggestion for the use of qualitative indicators, e.g. staff survey looking for information that can detect trends rather than present absolute numbers, e.g. in terms of stress, is more likely to enable this sensitive issue to be acknowledged by companies.

On the whole, subjects are finding it challenging to distinguish between work-related and non-work-related ill health / absence caused by stress, and are looking for guidance in how this can be addressed. However, there is some concern that it is still early days in tackling this issue so difficult to set a single indicator, and that companies need to become more sophisticated with issues relating to health in general. The need for employee responsibility and accountability in respect to this issue was also mentioned. One suggestion made was for a reduction in number of days lost or in overall long term absence, but the limitations of this were recognised.

Some subjects are attempting to tackle the issue of stress in the workforce, though it is believed that this is mostly in the larger firms and not in SMEs, e.g. by attempting to better capture these features within a staff survey, enabling counselling, etc. An HSE Bristol survey found that 40% of employees rate themselves as “moderately to severely stressed”. In respect to information generated, they appear more concerned to discern trends than to generate absolute numbers. Another means by which staff stress could be measured suggested by a subject was the number of calls taken by the staff counselling service which could be broadly categorised, e.g. according to stress, bereavement, debt, etc. Stress could then be broken down into work-related or personal.

Employee involvement in reporting ill health is critical in obtaining true figures, which is strongly influenced by a perception regarding job security, i.e. no one will report ill health symptoms if they think they will loose their job or be moved to a less well paid/lower hours post. In this sense, some synergy with CSR reporting on workplace, e.g. turnover/retention figures to give a feel for personnel management and culture.

Suggestions to measure mental ill health were considered meaningless by some interviewees and impossible to declare, as it was felt that it would be asking business to expose them to unnecessary risk. Again, the difficulty of distinguishing work-related and other causes was raised.

There are various groups looking into assessing the financial costs incurred by business as a result of ill health (see Financial Indicators below for further discussion on this topic).

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Major Loss/Potential Incident “near miss” An employer representative claimed that FTSE companies are already providing information on major loss information in relation to their listing requirements and the Turnbull report. However, owing to the commercially sensitive nature of this information, it was stressed that participants would need to be clear as to how much information would go into the public arena. However, in relation to some sectors, e.g. manufacturing and engineering major loss events are more likely to be related to products than health and safety. An example might be when an aircraft component design is identified as the cause of an air crash.

An employer representative questioned whether it was necessary to use anything other than the established COMAH Regulations, which stipulates the reporting of near misses, and high hazard permission regime used by the HSE, which undertakes a risk assessment of safety cases and has procedures in place.

On the other hand, some other interviewees believed that such an indicator would have a positive effect as this would be of interest to investors. How a company manages and records a near miss is a good indicator of management, though it was recognised that this would be difficult information to collect. The value that an investor would assign to an organisation that does illustrate that it is able to capture and deal with an issue before it becomes a liability is significant.

Impending Risk There was some concern as to what an “impending risk” might mean, how it is to be defined and by whom, not to mention how this can be calculated. It was argued by an employer representative that this would be very tricky, open to subjectivity and politics. In addition, it could create a significant tension between industry and regulators. It was also believed to be more easily applied to some industries than others. Also, it raised the issue of a time lag, especially if such information is to be reported annually. Another issue raised in relation to this by an investor would be that only similar risks and hazards could be compared and therefore it would need to be done on a sectoral basis.

In relation to public health, an organisation can be exposed to significant risks, e.g. COMAH sites and legionella. In this sense, it was noted that an organisation’s desire to protect its public name should not be underestimated.

Financial indicators A number of interviewees noted that, like performance output indicators, financial indicators are reflective of past decisions; however, investors are used to accepting information in this form from financial reports and so did not see this as a constraint.

The cost per employee spent on health and safety was not considered appropriate by some as the possibility can be that a high health and safety performer will probably be spending less money relative to a poor performer. It was also questioned as to what would be included in determining that cost, e.g. the safety element of equipment, percentage of salaries, etc. Furthermore, it was argued that cost per employee is relative to financial viability, in that some can better afford the costs than others. In a similar way, those companies undertaking more extensive accident investigations, which also cost more, than those that do cursory ones, should not be penalised. In this way, it was suggested that externally imposed costs, e.g. fines, provide a more adequate measure. However, a few felt that such financial indicators are too simplistic, in that the level or number of fines recorded by a company might, for example, merely show that there was a particularly active inspector at work.

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It was suggested by a couple of health and safety specialists and employer representatives that by attempting to assign a cost to accidents it would create more of an incentive to organisations to understand and manage occupational health and safety. Another acknowledged that though an accident cost calculator was published in 2002 by the HSE they do not use it as it is too complex, and rather use simpler gross estimates determined by type of injury and lost time. However, they also felt that reputation was more of a driver for reducing accidents than the financial costs incurred.

The financial services sector argued that investors would see a value in identifying the total amount of compensation paid out by a company in a year in relation to worker injuries, though it might also indicate a particularly active trades union. However, such a figure is not information currently in the public domain and it is believed likely that companies will resist it being made public.

Employee representatives appear keen to use an indicator that would encourage companies to carry out a cost benefit analysis of health and safety, on the grounds that what gets measured gets managed, but agreed that to make it “come out right” would require looking at these aspects in very broad terms, including such issues as morale and productivity.

Compliance indicators These indicators would include convictions, health and safety enforcement notices (e.g. improvement notices, prohibition notices). It is noted by many that such indicators are easy to collect, simple to understand and the information already exists in the public domain.

The regulator pointed out that compliance information is useful background, but for most companies it is not significant, e.g. what does “no prosecutions” tell you? However, above a certain threshold, it does become useful, e.g. four prosecutions in a year at a particular site.

A key lobby group felt that results of enforcement action was a very important indicator and should include description of any convictions.

Welfare indicators

With regard to staff welfare, there were very few suggestions beyond staff surveys - it was acknowledged that many companies do undertake staff surveys but will not necessarily make the results available publicly. Most overlap with initiatives to detect and manage stress (see the health indicator section).

3.2.7 How can the index be used to promote health and safety on the CSR agenda?

It was acknowledged by a number of non-health and safety specialists that health and safety has not been a part of the CSR movement. However, there was a definite belief that information on this aspect of company operations would be useful. In part, this may be the result of companies being secretive about their activities, and not much information is available publicly on health and safety.

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A couple of different stakeholders were aware of the current working group developing guidance on materiality of risk to be defined in an Operating and Financial Review (OFR) which have come about as a result of recommendations made on Company Law33. It has been suggested that pending the outcome of this work, a health and safety performance index would be valued by companies providing them with some insight into how they could best report on this aspect of their operations.

3.2.8 Other comments

It was stressed by a few interviewees that information demanded for input into the index should not be over-burdensome. If the information required demands too much of an investment it will put some companies off. Similarly, there was also an argument that if all sections of the index were not applicable to companies, this would devalue it, and yet there would be a requirement that a company can identify its significant risks within the index, which arguably differ from one company to another.

There were some points raised in discussions with some subjects regarding the development of a health and safety culture within an organisation that would be driven by a desire for accountability both from the employer as well as employees as benefits can be seen to both. In part, this is reliant on there being a realistic expectation for health and safety within the organisation. By aiming to achieve a safer environment, managers are more likely to report as there is no threat of being shamed and being seen to underperform.

Some users pointed out that a ranking of their company’s performance would not interest them. They want to use the index to learn what they can learn from better performers, not whether they’re top, tenth or last.

Those company representatives consulted also put much value in engaging support for the uptake of an index by industry through the inclusion of local authorities and other regional/industry fora as a means of providing the support, create understanding of the index and enable best practice/learning to be shared. This is recognised in part as an area relating to health and safety that are under- or even un-researched.

There was general support for the internet to be the platform for making available index results.

3.3 Conclusions It was found that on some issues there appeared to be a fairly strong correlation of opinions among representatives of various stakeholder groups.

• Management issues are critical (generally positive)

Generally all stakeholders stressed the importance of assessing performance in relation to management systems. It is a matter of acknowledging that accidents do occur. The main focus of the index should be in determining to what extent the organisation has control of its significant risks and whether it has done this effectively. At the same time, management could also provide some insight into the culture of health and safety within the organisation. Generally health and safety has been seen as being technical and not particularly “sexy”.

33 For further information see Department of Trade and Industry. 2002. Operating and Financial Review Working Group Terms of Reference, http://www.dti.gov.uk/cld/terms.pdf

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• Screening criteria are criticised

Generally, there is resistance to the idea of applying any screening criteria to the index, i.e. where an organisation is deemed such a poor performer that it cannot obtain an index score. A number of reasons were given, the two key being that such a strategy would 1. Effectively increase the risk of investment by reducing choice and 2. Remove incentives for the poorest performers to improve. From SRI experiences it has been shown that screening is not favoured as investors’ risk exposure is heightened as investment opportunities are reduced. From the perspective of companies and other stakeholders, they are not encouraged by such an approach as those not deemed “good enough” are not challenged to change.

• Sector specific benchmarking

Some respondents, primarily investors, commented that it would be beneficial if the index could be used to compare different sectors. This is particularly valuable to the non health and safety specialist to better understand what good performance is across all industries.

• Align the health and safety index with other initiatives in environment and CSR

Investors are interested in the aspect of health and safety in the workplace, and on the whole believe that it is an important, though not an essential, part of the picture. At this point, there is more interest in respect to work environments in developing country sites and in relation to subcontractors than for the UK alone. There is perceived value in aligning this index to environmental initiatives as many of the larger organisations do not separate out health, safety and environment responsibilities.

• Care in handling industries with established systems

In some industry sectors there are already recognised approaches and frameworks for managing and reporting on aspects related to health and safety, e.g. Responsible Care in the chemical industry sector.

• Index as a tool to assist internal change

A number of interviewees stressed that the value in developing an index such as this is to ensure that health and safety becomes an element of an assessment of an organisation. Some argued that there is a need to name and shame companies in order to ensure that it is taken seriously at a senior level. However, if this approach were to be adopted, it was suggested by some others that only a small number should be shamed (e.g. 6 companies as opposed to 200) or the result of a high number of “shamings” would rather result in a large number withdrawing from the initiative.

There were cautionary comments made by some that an approach to “name and shame” is not considered the most conducive way to bring about desired improvements, as those companies who have a poor performance will be less keen to be involved in the process. A means suggested to overcome this barrier to involvement is to use information from the public domain that enables “best estimates” to be generated for the company. However, it was also recognised that there is a limit to the amount of information put into this domain, particularly among certain sectors.

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• Need for verification / validation of information

It was agreed by a number of interviewees that it would be desirable to have the information input into the index verified. However, the implications of additional costs would make it less attractive for up take of the index in companies, particularly at an early stage where there is a need to ensure buy-in from organisations. This would be a reason to consider this as a next step.

• Focus on economically significant companies and consideration of an index / set of indicators for SMEs as a next step

A number of different stakeholders were concerned to raise the need for the index to be sensitive to different industry sectors as well as take into account that there are a significant number of SMEs within the economy.

• Continuity with work being undertaken by other actors

Additionally, many working with or familiar with SRI and CSR and other company reporting initiatives and requirements argued that there was a need to ensure that the index must be in line with and compliment this work. One of the critical areas where there is current development relates to recommendations made by the Company Law Review that economically significant companies produce an Operating and Financial Review (OFR). A working group has been established to provide practical guidance on how a company can assess whether an item is material to their company and therefore whether it should be included in an OFR and a consultation paper is expected to be produced at the end of May 2003.

• Need to capture absolute data

All indicators should provide evidence of performance in a way that is easy to collect and to work out, quantifiable in units that enable comparison and should not be too many. A number of stakeholders pointed out that there is much value in organisations presenting absolute data and not ratios, percentages or other relative trends, e.g. in organisations that have large numbers of low risk workers compared to high risk will have skewed rates, and similarly if those operating high risk positions are predominantly subcontractors. It is also important that the information requested is generic to enable effective benchmarking, e.g. absence should be recorded according to days off and not in relation to shifts.

• Do not overstate the value of an index for health and safety

There is a need for more guidance on health and safety reporting both for organisations wishing to report on the workplace, as well as those organisations wishing to establish guidelines and benchmark organisational performance or reporting frameworks, e.g. the GRI or an SRI analyst. However, there are limits to how much information can at this point be generated by the index. For instance, it will take time for the index to become known to companies and to bed down. It was suggested that the index should aim to start simply and evolve over time.

• Measuring ill health is perceived to be problematic

The least worst option was regarded to be measurement of sickness absence rates, but there was general acceptance of this as a measure with some saying it reflected wider issues of company performance in relation to the welfare of their employees.

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4 DRAFT INDICES 4.1 Introduction A draft index has been developed on the basis of the review of past research, lessons learnt from other indicators and the feedback from consultees. The initial proposals for an index are shown in a separate document and are currently the subject of a pilot.

Overall the index comprises a mixture of output and process indicators to give a balanced view of an organisation’s performance. Having this mixture brings the strengths of both types of indicator to the index.

4.2 Key decisions Financial indicators and compliance indicators have not been included for a number of reasons. Both were considered desirable on a number of counts but the difficulties and questions of validity led to the decision not to incorporate them at this stage.

There is very little consistency in the way that amount invested in health and safety is calculated, and some question as to whether this is really possible where many functions are integrated e.g. machinery maintenance is about more than quality and / or health and safety. Also there are questions about whether more spent really always indicates improved performance. More spent on accident investigation could indicate more accidents but also could indicate a thorough accident investigation system.

Compliance indicators – outcomes of enforcing authority action – are desirable from some accountability perspectives. The main disadvantage as an indicator of performance is that the numbers are very small and would only give significant information about an organisation’s performance if numbers of actions became relatively large, and this would only affect a minority of organisations. One option is to include the information as a “flag”, and not use it to contribute to the final index score. At this stage, it has been decided that this information may skew the view of performance and distract from the use of the index to improve performance. This could be changed in future.

Other key decisions have been to:

• Include specific process indicators about stress and musculoskeletal injuries since they are considered such widespread health issues, and

• Use sickness absence data as a proxy for an occupational health outcome indicator. We propose to explore the possibilities of refining this for future versions of the index.

4.3 Overview of the Index The draft index comprises 5 rated indicators, namely:

• Health and safety management indicators;

• Injury rates (employee and contractor);

• Sickness absence rate;

• A measure of occupational health risk management;

• A major incident rate indicator.

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The index also seeks: • A declaration of highly regulated activities;

• A code for indicating when an incident or event has occurred (or is pending) that has the potential to cause a major loss.

• A request for a Director’s declaration that all health and safety risks are adequately managed (often required by investors with limited resource for research).

It is suggested that further work is done to develop measures of work related ill-health.

A possible format for a company assessment and index of organisations is shown overleaf in Table 2 and Table 3. The overall rating would be worked out using a collection of separately rated indicators weighted as to importance, illustrated below.

In table 3 the 5 rated indicators each have a weighting. The health and safety management indicator is weighted at 0.5 out of a total of 1. This reflects the importance assigned to this “process” indicator. In the absence of any evidence otherwise, the other 4 indicators are not weighted differentially, with each weighted at 0.125 making up the other 0.5 together.

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Table 2: Illustration of specific company assessment Company X Overall rating (Scale of 0 to 10: 0 = worst, 10 = best)


Does this organisation conduct highly regulated activities that are covered by regulations such as COMAH, Nuclear Site Licences, aircraft licensing etc?


Details

Indicators Rating (0 to 10) Relative importance

H&S management system 7 0.5

Injury rate 8 0.125 Occupational health risk management 5 0.125

Absence rate 9 0.125

Major incident rating 10 0.125

Overall 1

7.50

Yes

No

No

Weighted rating

3.5

1.0

0.625

1.125

1.250

7.50

*Weighting is a simple mathematical adjustment to calculate the index where not all indicators are applicable.

Table 3: Illustrative index of companies

Company / organisation

A B C D E


loss potential

Directors declaration available

Operations that have the potential for major

loss over…


recognised Code X

No Y Yes Y No Y No Y Yes Y

H&S index

0 = Lowest score, 10 =

Highest score

7 9.9 9 8 5

Under watch

UW ----

Verification

S = Self assessment


S E E E S

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4.4 Key features

4.4.1 Health and safety management indicator

There is a basis of evidence in health and safety literature which provides evidence for the validity of health and safety management process indicators. Key references are HSG65 Successful Health and Safety Management, (and the related Guide to Measuring Health and Safety Performance) which is founded on practical evidence as well as INDG343 Directors’ Responsibilities for Health and Safety. There are several other sources of evidence both in the UK and elsewhere, including a growing safety culture literature.

The questions have been designed to test “key” features of health and safety management. In particular, we have tried to choose issues that will distinguish between organisations. The questions are not intended to be comprehensive and hence do not cover each and every aspect of health and safety management.

Thus, the indicator is made up of 10 key elements:

• How are health and safety targets formulated?

• How is health and safety represented at the board?

• What is the level of health and safety reporting to the board?

• What is the level of external health and safety reporting?

• To what extent has the company selected or formulated health and safety performance standards and requirements?

• To what extent are health and safety plans developed?

• To what extent are the workforce involved in health and safety?

• How is health and safety management performance verified?

• How is health and safety performance monitored and reviewed?

• To what extent is there a health and safety management system?

Each element of this indicator is a series of statements about these areas. Respondents are asked to consider whether they apply to their organisation. Statements are designed to be cumulative so that it is possible to get full marks (the intention is that no two statements are mutually incompatible, and that the addition of one is a sign of an improvement in the management system).

The final element is intended to allow those who have recognised management systems in place, be they general or industry specific, to gain credit without unnecessary burdens of providing information. Similarly, to exploit the benefits of levering change through client interaction with both their contractors and suppliers the question is asked in relation to requirements placed on these groups. For those that do not have such a management system, this element of the indicator is calculated through a set of supplementary questions, largely based on the HSE’s guidance on health and safety management34.

34 Successful health and safety management HSG65 Second Edition 1997, ISBN 0-7176-1276-7

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Each element is calculated out of 1 and is simply the proportion of the total ticks gained expressed as a fraction of 1.Each element is weighted the same so that the final score of the management indicator out of 10 is simply calculated by the sum of all the elements (each of which has a maximum of 1 as described).

4.4.2 Injury rate indicator

For larger organisations this is considered an adequate, if not perfect, outcome indicator of health and safety performance. Internationally, and particularly in the US, number of days off work are frequently recorded as a requirement of the enforcing authority, often after 1 or 3 days. It is considered therefore that the RIDDOR reportable rate for the UK will not be incompatible with this. The vast majority of RIDDOR reportable injuries involve over 3 days off work. So for those companies wishing to assess their operations beyond the UK, they will simply be able to use rates of injuries involving over 3 days off work.

There is no real justification for measuring just the injury rate of employees with the scale of contractorisation in many industries. However, treating the basic rates with equal weighting would not be a fair reflection of performance for many organisations. Say, for instance, there were only 10 contractors (say cleaning staff) out of a total employee workforce of 1000; to use the rate of injury to contractors would not be a fair reflection of performance. The indicator therefore takes this into account.

The injury rate indicator:

• Incorporates both employee and contractor injury rates;

• Weights employee and contractor injuries in accordance with the proportion of the total labour force that employees and contractors comprise;

• Indexes injury rates against the all industry average.

The injury rate index has been developed by:

• Identifying the average over 3 day injury rate per 100,000 workers for the UK, namely 635 per 100,000 workers;

• Identifying the range of injury rates;

• Producing a scale that reflects the range of rates.

It was found that injury rates vary by at least 100 fold higher and lower than the average between individual organisations, giving a very wide scale. The indicator scale is therefore logarithmic. In the current version of the index, the indicator score is read off a table. The key variable is the organisation’s injury rate relative to the industry average. The table can therefore be used to calculate either an all-industry score or an industry specific score simply by calculating the multiple of the relevant average (all-industry or specific industry).

The current version of the Index only quotes the all industry figure. This is likely to be developed to include a table of industry averages.

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4.4.3 Occupational health risk management

Due to the paucity of currently available ill-health measures, it was decided to introduce a set of questions that specifically assess the management of occupational health risk. Several consultees stressed the need to reflect the positive action taken to prevent and manage the risk of occupational ill-health. This indicator includes specific questions on the two most common health risk, namely stress and musculoskeletal. It also reflects a key government priority in covering the provision of rehabilitation and return to work programmes.

This indicator is calculated in a similar manner to the management indicator. It differs in that there is only one set of questions. So, the ratio of ticks to total possible ticks is calculated giving a fraction of 1, and then multiplied by 10 in order to give a score out of 10.

4.4.4 Sickness absence indicator

Consultations revealed that there was a general acceptance that, in the absence of something better, sickness absence rates did include absence due to work-related ill-health but also did reveal something of the performance of the company in relation to the general welfare of its employees.

The sickness absence rate index has been developed by:

• Identifying the average sickness absence rate per worker for the UK, namely 8 days per worker per year;

• Identifying the range of sickness absence rates between organisations – about 1 to 15 days per worker;

• Producing an indicator scale of 0 to 10 that reflects the range of rates – anything below 2 days is given a score of 10 and anything above 15 scores zero. This scale is a simple linear scale between 2 and 15.

Some actual examples are given below:

• An importing agent with 0.25 days lost to sickness is assigned a score of 10.

• A legal firm with 3 days lost per employee is assigned a score of 9.2;

• A water utility with 5 days lost per employee is assigned a score of 7.6;

• A school with 10 days lost per teacher is assigned a score of 3.8;

• A prison service with 16.7 days lost per officer is assigned a score of 0;

• A food manufacturer with 22 days per employee is assigned a score of 0.

4.4.5 Major incident risk indicator

This indicator is included because of the authors’ view that managing the risks from hazards such as slips, trips and falls well does not indicate that you are managing the risk of major incidents well. A range of stakeholders have an interest in this, not least the general public, but also financial investors who have an interest in the risk of catastrophic loss to an organisation.

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This is NOT intended to simply apply to sites where major accident legislation applies – an indicator of this is given elsewhere. A broader range of incidents is included, including for instance the risk of fire.

This is an outcomes indicator with incidents defined by description and examples in an indicative list.

So, this indicator was developed by:

• Finding examples of the number of incidents per year;

• Calculating the rate per 100,000 employees per year;

• Producing a logarithmic scale that captures the range of rates.

A logarithmic scale is required due to the very wide variation in rates per 100,000 employees.

4.4.6 Declaration of highly regulated activities

This comprises a simple declaration of whether the organisation carries out any activities that come under “highly regulated” health and safety regulations.

The intention here is to give a better understanding to index users of whether hazards are present which have potential to cause major accidents.

4.4.7 Directors’ declaration

It is apparent that some time limited investors require a simple declaration that the directors of an organisation acknowledge their responsibility and have implemented appropriate risk controls. This requirement could be satisfied by seeking organisations to provide a statement to the effect that:

An assessment has been completed of the significant health and safety hazards posed by this organisation’s activities and an appropriate set of health and safety arrangements are in place to control these hazards. The implementation of these arrangements is monitored and reviewed on a regular basis with action taken to redress any deficiencies and make improvements.

This is a new suggestion for the field of health and safety and has not been the subject of review by previous health and safety studies.

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5 PILOTING

5.1 Introduction

5.1.1 Aims

The intention of the piloting was to complete two “dry” runs of the index, trialling the index with a range of those likely to be the subject of the Index. Feedback was required from people who had actually completed the index and going through the process of providing all the information required to calculate it.

The aim of this was to gather information and views on a number of areas, including: • The feasibility of gathering the information for the indicators;

• The validity of the index as an indicator of health and safety performance;

• The ways in which the Index could be improved;

• Any other issues participants wished to raise.

This allowed amendments to be made which improved the pilot version of the index.

5.1.2 Method

The Index was piloted in two stages. Recruits were sought from a number of organisations from differing industries/services, both public and private. The first pilot version was sent to 25 organisations along with optional guidance on how to calculate the Index score, and a feedback questionnaire (See Appendix D).

Nine feedback questionnaires and seven completed Indexes were received on this first version of the Index, and it was amended to incorporate these comments. Only one of the first nine respondents commented on the calculation guidance and said that it was very complex. So for the second phase of trialling this guidance was not included in the materials provided. The researchers’ general opinion was that it was off-putting, appearing unnecessarily complex to first time users. Instead, the calculation method was implemented on an excel spreadsheet with results calculated by Greenstreet Berman on receipt of responses from organisations.

The amended version of the index was distributed to a further 29 organisations with the assistance of ROSPA. In particular, the Index was distributed to firms applying for ROSPA awards. Eleven feedback questionnaires and ten completed Indexes were received on this second version of the Index. Final amendments were made to the Index and scoring system.

Table 4: Number of respondents involved in the piloting

Piloting Distributed to

Feedback questionnaires

returned

Completed indexes

returned Return rate

Phase 1 25 8 7 ~28%

Phase 2 29 10 10 ~34%

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5.2 Initial piloting

5.2.1 Respondents

In response to first pilot version 1 of the Index, a total of eight responses were received from organisations who had reviewed the index. Some provided verbal comments and some only returned the feedback questionnaire. Seven returned the full index to the researchers and eight the feedback questionnaire.

All respondents are indicated in Table 5 below. The order prescribed to them (the respondents) is in relation to when they were received. The classification of the organisation in relation to sectors is made based on the FTSE Classification35.

Table 5: Respondents from the first phase of the pilot

Respondent Industry sector A Insurance B Life Assurance C Banks D Food Producers & Processors E Forestry & Paper F Local Authorities G Pharmaceuticals & Biotechnology H Chemicals I Construction & Building Materials

5.2.2 Initial Pilot Scores

Table 6 shows the (anonymised) scores for those who returned the completed Index. Where data for one or two indicators only were not available the index score has been calculated without these scores, re-weighted to take account of this.

It appears that the index does discriminate between firms. That is, the Index produced a range of Overall Scores from 5 to 7.99. This indicates that the questions and scoring method does discriminate between firms.

As regards individual indicators it is also pertinent to note that:

• The scores for Health and Safety Management range from 4.94 to 8.57; • The injury rate score ranged from 3.1 to 6.3; • The Occupational Health Management score ranged from 2.67 to 9.33; • The major incident score ranged from 5.7 to 10; • The absence rate score ranged from 3.4 to 6.2.

Thus, it appears that there is a wide range of scores for each of the Individual Indicators.

35 For a summary listing the economic groups and sectors, see Appendix F.

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Notwithstanding the small number of responses, there is a 0.98 correlation between the Health and Safety Management scores and the Injury rate (n = 4), and a 0.98 correlation between the Occupational health management score and the employee absence rate (n=3). These are very high positive correlations. They indicate that firms with better Health and Safety Management scores have better Injury Rates scores (i.e. lower rates), and that firms with better Occupational health management scores have better (i.e. lower) absence rates. Whilst the very small number of responses means that these correlations must be treated with caution, they do give some confidence that the indicators are valid.

The correlation between Health and Safety Management scores and Occupational health management score is much lower at 0.39 (n = 6). This suggests that firms with better Health and Safety Management scores do not necessarily have better Occupational health management score, although there is a tendency for this to be so. This finding is consistent with previous research, such as Wright 1998, which suggests that firms may manage the “safety” and the “health” aspects to different standards.

It is also interesting to note that the directors of at least three of the responding firms had not signed a declaration about their commitment to the management of health and safety. This suggests that this simple question does serve some purpose, at least in terms of indicating executive management declared intent to manage health and safety.

Table 6 Scoring from first stage pilot companies

Individual indicators Overall score

Respondent (see Table 5 for sector)



Under watch events

Health and safety

management

Injury rate

Employee absence

rate

Occupational health

management

Major incidents

A No None Signed “has not” 7.80 5.236 5.80 9.33 Not

avail. 7.29

B No None Not signed 6.44 Not

avail. Not

avail. Not

avail. 10.00

C No None Unsigned “has not” 7.04 Not

avail. 3.40 6.00 10.00 7.52

D Yes None Signed “has not” 4.94 3.10 Not

avail. 6.40 5.70 5.00

E Yes None Not signed 6.72 Not

avail. Not

avail. 2.67 10.00 6.53

F index not returned

G Yes COMAH Signed “has not” 8.57 6.30 6.20 8.00 8.80 7.95

H Yes COMAH Signed “has not” 6.89 5.20 Not

avail. 8.50 Not avail. 6.87

I index not returned

36 Employee injury rate indicator only

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5.2.3 Initial pilot feedback

Feedback overall was positive with very constructive suggestions for improvements. As part of the feedback process respondents were asked to rate certain Index characteristics, as shown in Table 7. Only one respondent completely disagreed that the index was “meaningful” (for their sector). The prime concern for those disagreeing that the Index showed these features was related to concerns about how the Index would be implemented. Similarly five out of seven thought it would be a good idea to publish the Index scores, with the two against concerned that it needed to be verified externally (an option noted in the Index). One of these two thought that external verification was necessary because it was too subjective.

Another recurring reason given for concern was the lack of an option to indicate a partial compliance with items.

Table 7: Participants’ rating of aspects of the pilot index version 1

Completely agree Partially agree Neither agree nor disagree Partially disagree Completely disagree

a. Practical? **** * ** b. Valid? **** *** c. Useful? *** ** * * d. Acceptable? * *** *** e. Meaningful? *** ** * *

Practicality In overview the Index questions can be answered. Absence and injury rates for employees were easily completed by all, as well as the major incident rate.

The time required to complete the index is reasonable, reported at between half and one day; (4 reporting 2-4 hours and 3 reporting ½-1 person day). Respondents suggested that factors which might affect the time taken include: • Who completes it - effort may be greater if other (non health and safety specialist) audiences

are reached;

• Availability of a current annual health and safety report to refer to for data;

• Familiarity with the index - time taken to complete the Index would reduce as people became more familiar with it;

• Introduction of a sign off procedure would be needed involving other parts of the organisation and key stakeholders e.g. communications department, Trade Unions etc.

There was a consensus that it is difficult to present data on contractors. One respondent also suggested that it was too far advanced in its requirements for contractors, who tend to have less developed health and safety systems and are often less open. This respondent did also point out that there is no reason why they could not improve. Another respondent however, did think it would be possible to collect absence data for contractors given sufficient notice. One actually felt the sickness absence indicator would actually be more meaningful and valid with the inclusion of contractor rates.

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The Borough Council felt strongly that the information required about contractors was wholly impractical, but pointed out that they have a detailed vetting procedure which is not well reflected in the index.

Costs versus Benefits There were mixed views but no respondent felt that effort greatly outweighed the benefit. Three respondents said that benefits outweighed the costs whilst three thought that the effort outweighed the benefits. One of the latter commented that the benefits would actually outweigh the cost if the Index was “live”. One respondent felt that the effort and benefits roughly balanced one another. One respondent commented that it would be completed relatively easily by larger companies with dedicated health and safety functions.

Clarity The majority thought that clarity of instruction was reasonably clear. Two felt that they were unclear - but one of these related to the calculation process instructions, the other to lack of definitions. Another suggested more examples would improve clarity.

Face Validity There was a general consensus that the Index covered the right issues and gave an adequate range of responses. However, there were several suggestions that the option of “partially” on each item was needed to improve validity.

On specific comments one said that the questions were adequate for indicators 1-4, and one service sector respondent felt that it wasn’t specific enough for them and that greater weighting should be given to sickness absence.

One felt that the Under Watch flag was not relevant – more useful would be information on how an organisation has responded to the incident. This respondent was concerned that, because of the subjective nature of some of the questions, there was a real danger that it was more a measure of how well the form was filled in. One however, thought it was relevant but thought the time scale should be increased for the more serious incidents.

One suggested that it might go deeper into measures of safety culture issues, but agreed that this was a refinement.

Usefulness Five respondents thought that it was at least “quite useful” to improve health and safety within their organisation. Comments included “this sort of index can raise the [health and safety measuring] game at Board level, particularly if the output is made available to the general public”. However, one felt that a lot of information was already incorporated into their Corporate Responsibility framework and so this would add little internally.

Two respondents felt strongly that it would be useful, but only if it was not voluntary but demanded – the respondents did not indicate by whom this should be demanded. One of these respondents thought that verification was necessary because the Index is subjective in some areas – this respondent was particularly concerned about the major incident rating and the under watch flag.

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One respondent was very positive, suggesting that should the index go ahead with these features they would definitely:

• Implement health and safety auditing; • Specifically ask workers about ill-health symptoms, and • Require improved management by contractors.

Respondents mentioned a range of stakeholders who may find the Index useful for their own purposes, 4 mentioning trade unions (though this may have been influenced by this being given as an example in the question). There was a comment that it would be useful to shareholders as they are becoming “more enlightened” in health and safety issues as well as looking at environmental issues.

Extension to overseas operations There was not a clear consensus about the practicalities of extension to overseas operations, but there were no comments that this would not be possible.

One was unsure about its usefulness globally commenting that the final output may not reflect the top level input. An interim option would be to do this by world region. Another felt that difficulties would arise from the range of operations and territories, but it was not clear if these would be insurmountable.

Respondents pointed out that language and interpretation needed to be carefully considered especially in developing countries.

Concerns and suggestions about implementation The majority felt strongly that, for successful implementation with substantial uptake, there must be a launch with a “loud fanfare” and high profile backing including all the agencies with interest in health and safety. There were suggestions both that it was supported by Environmental Health Officers to support those with limited resources and that HSE made its own “big push” to get companies signed up. One commented that businesses should “feel left out if they did not take part”.

Most commented that it should be compulsory. One even said it couldn’t be successful without making it compulsory. Several suggested that it should be externally verified. (See also comments on “usefulness” above which respondents related this point to.).

One respondent had concerns about being compared to organisations in different sectors and that presentation was crucial.

One was concerned at the lack of a timetable for implementation now, suggesting that this will put people off. A solid communication plan is needed and another commented that consideration should be given to how those completing it receive recognition.

Other comments included that it should be carefully calibrated before full launch and that an electronic version would be useful in final implementation.

One company commented that their insurers may have concerns about making the information public.

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Points of detail raised by respondents A general point was that definitions of acronyms should be more complete.

Indicator 1 Sub-indicator 1.1 • Consider rewording the “no reduction” in standards question – one had interpreted this as a

negative. “Board” is not clear for companies that are/have holding companies. Sub-indicator 1.2 • Some people are called “Directors” but don’t sit on board. • Suggestion to add “The board collectively and explicitly accepts responsibility for health

and safety” Sub-indicator 1.3 • One respondent seems to have interpreted “supplier” as including “contractors”. They made

the point that although under 10% of their goods and services are supplied, these tend to be the higher hazard (e.g. asbestos removal) so that the cut off should be defined at least partly in terms of hazard.

• Another comment was that reporting to the board should be limited to “major or significant” events.

Sub-indicator 1.4 • Should HSG 65 performance reporting get credit? • The definition of “recognised” was considered not clear by one respondent. Sub-indicator 1.5 • The Major Incident question was considered to be not relevant to some. • There was concern that the occupational health sub-indicator was not tightly enough

defined; the indicative list was not clear, and there were issues of validation and auditing. Sub-indicator 1.6 • Should there be a statement on the involvement of a board director, without whole board

involvement? Sub-indicator 1.7 • Safety committee – emphasise the “strategy” and note that it’s a legal requirement if there is

a recognised TU where the safety representatives ask for it. • 2nd question ticked, first not despite instruction. Sub-indicator 1.8 • One suggested a definition of “organisational change” was needed perhaps with an example. Sub-indicator 1.9 • Comment that there is little consistency on reporting so it is difficult to benchmark – is it

fair to mark people down? Sub-indicator 1.10 • Suggestion HSG65 should be included. • Responses showed that there was a variety of meanings given to the word “suppliers” some

using this to refer to suppliers of services, known by others as contractors.

Indicator 2 Injury Rate 2.2 Clarify which sub-contractors are included in definition of contractor.

Indicator 4 (OH) • HSE beacon of excellence – extra mark? • One was asking for symptoms of ill-health but for DSE only. • One was asking about symptoms, yearly for production staff/ 3yearly for non-production

staff. • What if a system is there but not documented (e.g. vocational rehab)? • 2nd last question – not ticked and last one ticked.

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Indicator 5 - Major Incident rating Comment that 3 years too short a time for D-G incidents

Highly regulated activities • Need extra “None” column for highly regulated activities. • PPC suggested – (note that this is exclusively environmental legislation so not appropriate

at this stage)

Under watch • There was a comment that “Since when” was not clear from the instructions. This was a

comment from a respondent who agreed they had had an UW event but over 10 years ago.

Supplementary Management Questions • 7.1 – comment that it seems to be referring to procedures as well as policy.

Respondents’ suggested changes Respondents suggested the following changes to the index: • Better reflect realities of contractor vetting procedures, less detail on management system

requirements;

• Make some allowance for partial/incomplete or 1-5 scale of compliance (e.g. 1=good; 2=could do better, 3=poor, 4= none), responses to questions – e.g. where there is a multi-site organisation where on some sites procedures are better than others.

• Incorporate partnership agreements (not clear whether this is with TUs or other organisations);

• Improve definitions of terms – e.g. explicit or implicit “targets”, “audit”;

• Cases of work-related ill-health should be annexed;

• Take opportunity to build in environmental information;

• More emphasis on inputs – comment that accredited management system doesn’t assure good SHE performance.

5.2.4 Conclusions from initial pilot

It is concluded that:

• The Index does discriminate between organisations’ performance; • The individual indicators provide valid measures of performance; • The index is practical and does not demand an excessive amount of time to complete; • The inclusion of contractors is a problematic area; • Half of respondents felt strongly that there should be the opportunity to respond on a

scale of compliance with index statements / questions; • Whilst some organisations do not consistently collect data on absence rates this problem

can be overcome; • Many of the concerns about the index relate to the method of implementation; • Some prefer to be benchmarked within sectors; • The word “Suppliers” can mean both suppliers of goods and suppliers of services.

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5.2.5 Summary of revisions

The main revisions to the initial version of the index were:

• An answer option between “Yes” and “No” was provided – “some”; • The management system sub-indicator (1.10) was simplified to relate only to a

respondent’s own management system, and a new procurement sub-indicator created (1.11) to cover suppliers and contractors, using the terminology “supplier of services” and “supplier of goods”;

• A statement about collective board responsibility was added to sub-indicator 1.2.

5.3 Second stage piloting

5.3.1 Respondents

In response to second pilot version 2 of the Index, a total of 12 responses were received from organisations who had reviewed the index. Of these 10 returned the full index to the researchers and 10 the feedback questionnaire.

There is no significance to the order of respondents below – it reflects only the order in which the responses were received. The sector classification of the organisations is made based on the FTSE Classification37.

Table 8: Respondents from the second phase of the pilot

Respondent Industry sector J Diversified Industrials K Food Producers & Processor L Food Producers & Processor M Information Technology Hardware N General Retailers O Automobiles & Parts P Support Services Q Engineering & Machinery R Aerospace & Defence S Media & Entertainment T NHS Trust U Food Producers & Processor

37 See Appendix F for a list of all economic groups and sectors.

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5.3.2 Second round pilot scores

Table 9 shows the (anonymised) scores for those who returned the completed Index. Where data for one or two indicators only were not available the index score has been calculated without these scores and re-weighted to take account of this.

It appears that the second version of the index does discriminate between firms (with a range of 4.09 to 7.75) though it is noted that there is some clustering. This may be explained by a bias in our respondents towards committed and well performing organisations showing an interest in this work.

As regards individual indicators it is also pertinent to note that:

• The scores for Health and Safety Management range from 3.87 to 9.38; • The injury rate score ranged from 3 to 7.8; • The Occupational Health Management score ranged from 2.86 to 10; • The major incident score ranged from 2.4 to 10; • The absence rate score ranged from 4.2 to 6.8.

Thus, as previously noted, it appears that there is a wide range of scores for each of the Individual Indicators.

The correlation of 0.33 (n = 9) between the management indicator and injury rate is not as clear as the first stage pilot. However, with a sample size of just 9 the correlation has again to be treated with caution. The employee absence rate and occupational health management score has a correlation of 0.74 (n = 6), whilst the absence rate has a correlation of -0.21 (n = 6) with the management indicator. Thus, as with the initial pilot, the strongest correlations exist between the absence rate and occupational health management score, followed by the management indicator and injury rate.

If the scores for the two pilots are combined, the correlation between the management indicator and injury rate score is 0.47 (n = 13) whilst the employee absence rate and occupational health management score has a correlation of 0.71 (n = 9).

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Table 9 Scoring from second stage pilot companies

Individual indicators Overall score

Respondent (see Table 5 for sector)



Under watch events

Health and safety

management

Injury rate

Employee absence

rate

Occupational health

management

Major incidents

COMAH,

J Yes

Railway safety case regulations,

Asbestos Unsigned 8.17 6.60 6.40 10.00 6.06 7.72

licensing, etc.

K No None Signed “has not” 7.63 Not

avail. Not avail. 7.14 10.00 6.5538

L Yes COMAH, Asbestos licensing

Signed “has not” 4.71 3.0039 Not avail. 5.00 2.40 4.09

M Yes None Not signed 9.38 5.80 6.80 10.00 3.60 7.96

N No None Signed “has not” 3.87 4.3040 Not avail. 2.86 10.00 4.80

O No None Signed “has not” 6.45 7.10 6.00 7.86 10.00 7.10

P Yes Asbestos licensing

Signed unstipulat

ed 9.18 4.9041 Not avail. 7.50 Not avail. 7.69

Q No None Signed “has not” 6.88 7.80 6.40 7.50 10.00 7.75

COMAH, IPPC/Waste

R Yes management authorisation s, transport

of hazardous

Not signed 8.84 4.90 4.20 6.43 Not avail. 7.46

cargoes, etc.

S Yes COMAH,

Transport of hazardous

Signed “has not” 8.41 5.5042 5.00 8.21 5.00 7.60

cargoes

T index not returned

U index not returned

5.3.3 Second round pilot feedback

Feedback in the second round re-enforced the generally positive sentiments expressed to the Index in the first round. Respondents again were asked to rate certain index characteristics and Table 10 shows the results.

38 Absence and injury rate data not completed 39 Employee injury rate indicator only 40 Employee injury rate indicator only 41 Employee injury rate indicator only 42 Employee injury rate indicator only

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The “completely disagree” comments in the table below are accounted for entirely by two respondents for very specific reasons. One was a holding company with very diverse operations, and the other felt that it already published enough information so that completion of an index would be an unnecessary burden. Understandably one of these two would not be happy to have their score published and the other was unsure. Overall 5 respondents would be happy to have their results published, 3 were unsure and 3 against.

Table 10: Participants’ rating of aspects of the pilot index version 2

Completely agree Partially agree Neither agree nor disagree Partially disagree Completely disagree

a. Practical? *** ***** *

b. Valid? ** ***** ** *

c. Useful? ***** ** * **

d. Acceptable? *** **** * *

e. Meaningful? * ***** ** **

Practicality The second stage piloting confirmed the first round finding that, on the whole, Index questions can be answered. All but one respondent was able to complete injury rates for employees whilst 4 out of the 10 were unable to complete absence rates for employees. Two of the latter stated that they had just started collecting this data and so would be able to complete this next year. All but 2 were able to complete the major incident rate indicator.

The time required to complete the Index remained for the majority under 4 hours. Over the two pilots, 11 out of 17 respondents to this question indicated that it took less than 4 hours. Five of the remaining 6 took less than one day, with only one saying that they spent 7 days on it, partly due to involving a range of people and data collection activities. There were few other comments on time taken but two respondents did point out that implementing it formally in their organisations would require longer, and one said that this would be slightly offset by increasing familiarity with the index.

The consensus that it is difficult to present data on contractors was reinforced, one respondent also saying that contractor absence was not relevant as it was not their responsibility.

Costs versus Benefits Again there were mixed views but with only one respondent indicating that effort greatly outweighed the benefit. Over both pilots 6 thought that benefits outweighed costs, four thought that they were about balanced and 6 thought the effort outweighed the benefit, though at least two of those were referring to the benefits of being involved in the pilot itself.

Clarity The overwhelming majority (10 to 1) thought that the instructions and guidance of Pilot Version 2 were at least “clear” (5) or “very clear “(5).

Face Validity Again this phase of piloting reinforced the conclusions of the first phase that there was a general consensus that the Index covered the right issues and gave an adequate range of responses.

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No comments were made on the range of options other than a holding company which pointed out that almost all its answers were going to be “some” because of the range of companies with differing systems and policies.

One suggested that employee numbers should be established for the same time period used to calculate the indicators in order to be consistent.

Only one company commented in any way on the statement regarding Trade Union partnerships. This respondent suggested that it made no difference to the standard of health and safety performance. One respondent felt that there should be more emphasis on practical arrangements for health and safety.

Usefulness There was a similar response to this question but with an increase in the number of “Unsures”. Five respondents thought that it was at least “quite useful” to improve health and safety within their organisation. One specifically mentioned its use as a benchmarking tool, one suggesting its use to set key performance indicators and another saying that they may “realign” in order to get more points. One said that the usefulness was contingent on the group (e.g. the public) understanding the index and its purpose.

One organisation said that it would not be useful, and one that it would be counterproductive. This last organisation was a holding company and felt the index result for them would have no relevance to anyone because of the hybrid nature of the organisation. The other organisation saying that it would not be useful felt that there would be immediate demands for the results to be independently verified and that this would simply mean extra unnecessary costs for industry since all the information is already public for “better” organisations.

Again respondents mentioned a similar range of stakeholders who may find the Index useful for their own purposes. More mentioned shareholders finding it useful, though one commented that it could be confusing for shareholders of shares quoted in the US. None commented on investors this time around, other than the holding company who thought it would be counterproductive for them. One suggested that the regulator could use results to inform decisions about who to visit. One company also pointed out that their visibility as a company to the public was very low and so the public would not find this information at all useful.

Three respondents suggested that it would be more useful if it included environmental management. One felt that there was little consensus about an environmental performance index and one with a government authority involvement could create a movement towards a much needed consensus. It would also ensure that this index would not, in effect, contribute to the proliferation of indices.

Extension to overseas operations Of those that commented three thought it would be feasible to extend this index and one thought an international index but not this (UK-based) index might be accepted globally. This respondent suggested ISO would be the obvious provider of such an index. Two respondents felt that a global standard was the only fair and feasible way to implement such an index, one saying the current version was already generic enough. Two respondents thought that whilst feasible they recognised the difficulties of different local arrangements (e.g. employee representation varying). One respondent felt that it would really not be feasible to extend it at all and be in any way relevant to them (a comment for the holding company).

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Concerns and suggestions about implementation There was less concern about external verification in this stage of piloting. (This is perhaps explained by a change in style and clarity of introduction – the second version of the Index made no mention of the pilot within its instructions. All of the information concerning the pilot was provided in covering letters. It was probably clearer that this pilot was primarily concerned with feasibility and validity). One comment on external verification was that it would inevitably be required and would increase costs unnecessarily.

Two respondents this time said that it should be voluntary (compared with two in the first round pilot saying that it should be compulsory). Two also said that incentives would be needed and gave examples of insurance premiums and through the supply chain.

Like the first stage of piloting several respondents again suggested that an on-line/electronic version would be beneficial, and likewise several respondents commented that HSE involvement in launching it and promoting it (perhaps even through field staff) was essential.

Concern about the early stages of aligning systems to the index needs led one to suggest that a “run-in” period would be helpful to organisations.

Finally one respondent suggested that it could be implemented through the global reporting initiative (GRI – see section 2.4.3 of this report).

Points of detail raised by respondents There were a number of points of detail including a range of suggestions for minor wording and presentation improvements which were very helpful. Other suggestions included:

• Include explosives in the licensed operations; • Consider the order in which the management “sub-indicators” are presented; • Provide guidance on who should complete the index; • Explore in more detail the form in which companies collect information on absence; • Provide more options on providing statistics on injury rates.

5.3.4 Final revisions made to pilot index

Other than presentational and minor changes, final revisions made to the Index were:

• Requirement to make a statement on the importance of contractors to an organisation, for respondents unable to provide data on contractors. Respondents would be required to select the statement most appropriate to their circumstances from a set of standard options provided;

• Provision of an “n/a” option for statements relating to key suppliers/contractors and reflecting this in the calculation;

• Simplification of the calculation and guidance for the management system indicator; • Addition of “Explosives” to the declaration on high hazards; • Provision of a clearer instruction that “some” is only an option if an organisation is well

on the way to achieving a “yes” in the management and occupational health indicators.

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6 CONCLUSIONS AND RECOMMENDATIONS

6.1 Conclusions

The purpose of the Index is to provide a practical and valid tool that enables external stakeholders to assess the health and safety performance of organisations of interest. It is thus intended to introduce a further incentive for senior managers and directors to improve health and safety management.

From this research it is concluded that the Index will be practical, valid, of use to stakeholders and is likely to increase incentives for many large companies to improve their performance - but that further validation and additional guidance are first needed. It is also concluded that it is viable to produce an Index of company health and safety performance that can be used to compare organisations within sectors and to compare organisations across sectors.

Results show that the Index has face-validity (i.e. it appears to ask the right questions) and the scores for individual indicators are correlated. Moreover, it does produce a range of results, indicating that it does discriminate between organisations. Thus the Index will enable stakeholders to take a view of organisations' health and safety performance, and respondents themselves identified a range of their own stakeholders who they believe may make use of the results.

It is further concluded that (with one caveat) the Index developed is practical and takes an acceptable amount of time to complete in relation to likely benefits. Some respondents encountered difficulty in providing data on employee injuries and absence in the time scale of this project, but it is clear that such data can be produced if the index is "live".

It is not, however, clear that all organisations can readily include contractor injury rates in their responses. Thus the final revision to the Index includes the requirement to select a qualitative statement about the extent of reliance on contractors where contractor injury rates cannot be provided. Almost all respondents indicated that it would not be possible to provide absence rate data for contractors, so the current version of the Index does not require this.

Some of the feedback about the usefulness of the Index is interpreted by the authors of this report as reflecting the limit of the role of an Index. That is, the Index was designed first and foremost to mimic the role of financial indices (such as the Standard and Poor credit rating) which give a high level measure of performance for use by investors and other external stakeholders. It is clear that many firms would welcome a method of benchmarking and internal self-assessment that provides a more detailed appraisal and guidance on improvements, for use by company management. But this Index is not intended to provide such detailed appraisal and guidance.

The other main area of concern from participants relates to the implementation of the Index, particularly the issue of external verification. Also, the extension of the Index to the overseas aspects of company operations appears challenging to many.

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6.2 Considerations for future development 6.2.1 Issues arising from the pilot

Implementation The main area of concern related to the implementation of the Index, a matter that was beyond the scope of this pilot project. It is recommended that the HSE/C consider, in consultation with key stakeholders, how best to launch and operate the Index.

Feedback from respondents and stakeholders consulted during this project suggests that:

• An electronic web based version of the Index should be available; • A high profile launch is required; • Organisations would be reluctant to complete the Index if it was operated directly by the

HSE; • The Index should initially only apply to UK operations; • The issue of external verification is vital.

Feedback from investment organisations indicates that they would make use of an Index if the results were publicly available. Hence it is suggested that the mere publication of results would help initiate uptake of the Index as investment organisations seek common information on firms.

Some specific points concerning the implementation of the Index that need further consideration are summarised below.

Holding company vs. individual subsidiaries Some companies are in fact holding companies with very diverse operations and organisations with little or no overall operational control from the holding companies. A question remains whether the Index can or should be applied to the holding company and/or to the individual companies. This question is further complicated by the point that the scope of control exerted by “holding companies” varies from one to another.

It would be useful to identify and assess the different organisational arrangements within holding companies and other organisations and thence elaborate guidance on the application of the Index to multi-organisation companies.

External verification This is clearly an issue of importance to many though the method of external verification was beyond the scope of this project. Feedback suggests that external verification will be demanded by many. Hence, it is critical that the arrangements for external verification are developed, such as who will operate the Index and who would act as external verifiers.

Industry specific indicators This pilot Index aimed at developing a feasible and valid framework for an Index to score health and safety performance within organisations. The objective was to set a standard that enabled the Index to be completed by all possible organisations and for organisations to be compared regardless of their sector of operation. Some respondents indicated that they would welcome, or indeed, prefer sector specific Indices. Hence, an option is to build on the current Index and further strengthen its appeal by identifying and developing industry sector-specific indicators. These could operate in conjunction with or as a supplement to the cross-sector index.

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Legal considerations Concern was expressed by several that companies will take legal advice on what information they can publish and this may constrain their answers. Careful consideration needs to be given to what level of detail information will be published when an index result is completed.

Transparency would demand as much detail as possible, but should this mean the legal pressures become a significant deterrent to completing the index it is not likely to be taken up successfully, particularly if it is a voluntary initiative.

The major incident indicator is likely to be the most sensitive to this problem. More detailed guidance with an extended set of examples may help organisations can be confident that they are accurate in their reporting.

Standalone health and safety Index vs. integration with other indices/issues During the project there have been a number of occasions where the opportunity and value of integrating a health and safety performance index with other indices, such as environmental indices and corporate responsibility indices as well as other health and safety initiatives, has been raised by various stakeholders. Several respondents also suggested that a new health, safety and environment index, backed by government would be welcome since there is little consensus on environmental indices.

Given the current limited state of reporting on health and safety and the fact that it is an emerging issue within the reporting framework of CSR, there is some value in the index maintaining its independence and profile for health and safety at this early stage. However, this is an issue that will need to be considered in the medium term to move health and safety on in the CSR debate.

6.2.2 A Way Forward

Figure 1 shows an overview of the process of developing and implementing a health and safety performance index. It shows the work done to date for the HSE in relation to developing a pilot (prototype) index and outlines the potential next steps. It is recommended that the method of implementation is considered in parallel to the development and validation of an electronic version of the Index.

61


Set up l

i

li

ial i

ClResearch Report

Full il i

i l iinstitutiona

arrangements

200

4

Determining the interest for a health &

safety ndex

Deve oping a prototype health & safety performance ndex

and init testing of ts feasibility and validity

aros Contract

2002

Greenstreet Berman Contract Research

Report 2003

HSE Health & Safety Performance Index

2003

scale validation exerc se, deve op electronic vers on &

mp ementat on strategy

Launch Index

2002

2003

Figure 1 The development and implementation of a health and safety performance index

62


It is Greenstreet Berman’s opinion that consideration should be given to the option of the index being operated by an independent organisation sponsored by (say) the HSE and other key stakeholders (such as the ABI), with a steering committee made up of key stakeholder representatives such as:

• TUC; • ABI; • CBI; • HSE; • ROSPA; • Investors.

The organisation operating the Index could also offer a commission based external verification service, along with other independent health and safety organisations. This would require the organisation(s) offering external verification services to possess a health and safety management capability.

6.3 Recommendations

It is recommended that work is undertaken to complete the development and larger scale validation of the index. This should be an integral part of the development of an implementation plan taking into account the considerations detailed in the previous section. This pilot and subsequent promotional work by the HSE has generated considerable interest and it would be beneficial to a successful implementation and uptake to ensure this interest is built on in the near future.

Larger scale validation of the Index This project has completed preliminary piloting of the Index, including a limited amount of correlation of management scores and injury/absence rates. The correlations reduced in the second stage. Both stages of piloting relied on relatively small number of respondents. Ideally, a larger number of responses would be acquired to enable a larger scale validation of results.

Electronic web based version of the Index This pilot project relied on a paper based version of the Index. This required a transcription of responses into the excel calculation sheet. Ideally, a software version of the Index would be available on-line for either downloading by firms and/or for online completion. This would ease completion of the Index and encourage its application.

Glossary and examples Throughout the index, there are terms which may benefit from further explanation and guidance. An extensive glossary is likely to benefit the clarity of the index and hence users confidence that the information is consistent and accurate. A wider piloting process that captured a wider set of examples of “major incidents” would benefit the clarification of terms and reporting needs.

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7 REFERENCES

Arthur D Little. 2003. Speaking the same language: Improving communications between companies and investors on corporate responsibility, in conjunction with BitC and UKSIF, available at http://www.bitc.org.uk/docs/Speaking_the_same_language_report_2003.pdf

Aviation Safety Network. 2002. ASN Database, http://www.aviation-safety.net/database

British Energy. 2001. The international nuclear event scale, http://www.british-energy.com/education/factfiles/items/item55.html

Business in the Community. 2003. Indicators that count – social and environmental indicators – a model for reporting impact, Business in the Community

Business in the Community. 2003. 2002 corporate responsibility index executive summary, Business in the Community

Business Respect, “Two million workers die each year”, CSR Dispatches No.55 http://www.mallenbaker.net, 4 May 2003

Department of Trade and Industry. 2002. Operating and Financial Review Working Group Terms of Reference, http://www.dti.gov.uk/cld/terms.pdf

Dow Jones Sustainability Indexes. 2003. http://www.sustainability-index.com/

Eagles, E., Maynard, R. & Murray, V. 2002. “A categorisation system to communicate potential public health impacts of acute chemical incidents”, in Chemical Incident Report, produced by the Chemical Incident Response Service of the Medical Toxicology Unit, Guy’s and St Thomas’ Hospital Trust, No. 25, pp. 9-12

European Commission. 2001. Promoting a European framework for Corporate Social Responsibility, Green Paper, DG Employment and Social Affairs

European Environment Agency. 2001. Business and the environment: Current trends and developments in corporate reporting and ranking, Technical report No.54, Copenhagen

FTSE. 2003. FTSE4Good Index Series, http://www.ftse.com/ftse4good/index.jsp

FlightSafe. 2002. Airline safety scoring, http://www.flightsafe.co.uk

FORGE Guidance on Corporate Social Responsibility Management and Reporting for the Financial Services Sector. 2002. A practical toolkit, available at http://www.bba.org.uk/public/corporate/35475/61264

Global Reporting Initiative. 2002. 2002 sustainability reporting guidelines, http://www.globalreporting.org/guidelines/2002.asp

Health and Safety Commission (HSC). 2001. Responses of the ‘challenge’ to top UK companies to report publicly to a common standard on health and safety issues

Health and Safety Executive (HSE) 2001 A Guide to Health and Safety Performance available at http://www.hse.gov.uk/opsunit/perfmeas.pdf

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Health and Safety Executive (HSE). 1997. Successful health and safety management HSG65 Second Edition 1997, ISBN 0-7176-1276-7

Health and Safety Zone Direct. 2002. European safety awards to UK organisations, available at http://www.healthandsafetyzone.com

IBC (2002) Corporate social responsibility: Law, regulation and liability, proceedings of the conference held in London, November 2002

ICCA. 2002. Responsible Care Status Report 2002, pp. 22-25

International Labour Organisation. (ILO) 2003. Safety in numbers: pointers for a global safety culture at work, Geneva, ISBN 92-2-113741-4

Insight Investment. 2003. Investor responsibility bulletin, Spring edition

Institute of Chartered Accountants. 1999. Internal control: Guidance for directors on the combined code, Accountancy Books, London

International Atomic Energy Agency. 1999. The international nuclear event scale for prompt communication of safety significance, OECD Nuclear Energy Agency, France

Kingsmill, D. 2003. Getting the best returns from your human capital, FT Letters to the Editor, 2nd April 2003

Mansley, M. 2002. Health and Safety Indicators for Institutional Investors, Report to the HSE, 28th Feb 2002 Claros Consulting available at http://www.hse.gov.uk/revitalising/csr.pdf

Miakisz, J.A. 1999. “Measuring and benchmarking environmental performance in the electric utility sector: The experience of Niagara Mohawk”, in Sustainable measures: Evaluation and reporting of environmental and social performance, Bennett, M. & James, P. (eds.), Chapter 10, pp. 221-245

Moore Odell, A. 2003. “Workplace”, CSR Wire - The Corporate Social Responsibility Newswire Service, http://www.csrwire.com/page.cgi/workplace.html

Morley Fund Management. 2002. “Morley Fund Management publishes Sustainability Matrix”, 13 May 2002 published at http://www.morleyfm.com/press/130502.htm

Occupational Health and Safety Assessment Series. OHSAS 18000 Series – internationally recognised occupational health and safety management system specification. More information available at http://www.ohsas-18000-occupational-health-and-safety.com/what.htm

OECD Nuclear Energy Agency (NEA). 19998. Performance indicators and combining assessments to evaluate the safety performance of licensees Working group on inspection practices (WGIP)

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (1997 in Northern Ireland) (RIDDOR)

Transport Canada. 2001. A civil aviation strategy framework for Canada, http://ww.tc.gc.ca/civilaviation/flight2005/tp13521/indicators.htm

UN Global Compact. 2003. The Nine Principles. http://www.unglobalcompact.org/Portal/

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66


APPENDICES

67


68

The development of a health and safety management index for use by business, investors, employees, the regulator and other stakeholders

APPENDIX A: MATERIALS SUPPORTING STAKEHOLDER DISCUSSIONS

Development of a Health and Safety Performance Index As you will see from the enclosed letter, the Health and Safety Executive (HSE) has commissioned Greenstreet Berman to develop a health and safety management index in order to raise the profile of health and safety amongst Directors (or their equivalents) of larger organisations. The HSE is very keen to involve a range of stakeholders in this work to ensure that it is both valid and acceptable. We would therefore be very grateful if you could spend a little time (around 30 minutes) to let us know what your opinions are.

Greenstreet Berman is an independent research and consultancy organisation. Any information we receive will be anonymised and collated before we report to HSE, unless you specifically ask us to pass on your opinion.

Aims of these discussions It is anticipated that the index will be made up of a mix of quantitative and qualitative headline indicators e.g. an indicator of management performance, employee injury rate etc.

We would like to explore a number of areas, including: • What potential index users would like the index to tell them; • Feasibility of gathering information for suggested indicators, and minimising extra

burdens on organisations;• Validity of the index as an indicator of health and safety performance; • How it should be designed to motivate directors to improve health and safety ; • Design to ensure that an index is not incompatible with recognised Corporate Social

Responsibility indices; and • Anything else you wish to tell us! Do you have any suggestions for possible health and

safety indicators and how best to design the index.

What we would like you to do Please consider the questions overleaf. These are not intended to be exhaustive, nor do we expect an opinion on every question. They are there to help guide our discussions. We have also attached some information about current thinking on measuring health and safety management performance, and an idea about how an index might look.

A Greenstreet Berman consultant – either Catherine Beardwell or Joscelyne Shaw – will contact you to discuss this. If they have not done so already they will make an appointment with you to do this. They will take notes during the conversation, so please do not feel obliged to provide a written response.

We expect the discussions to take around 30 minutes, but of course this will in part depend on your views.

greenstreet berman 69

The development of a health and safety management index for use by business, investors,employees, the regulator and other stakeholders



HEALTH AND SAFETY PERFORMANCE INDEX SUGGESTED ISSUES FOR DISCUSSION WITH GENERAL

STAKEHOLDERS

INTERVIEWEE:

ORGANISATION:

CONTACT DETAILS: Tel: Email:

Address:

1. Please explain briefly: • What your organisation does; and • What your own role is.

2. What role do you think a health and safety index should fulfil?

3. What does your organisation need from a health and safety index?

4. What should an index be telling you? (e.g. how well health and safety risks are controlled, standard of welfare provision for workers, whether financial security is threatened by health and safety risks, etc.)



5. This index is intended for use in the UK. Would you / your organisation need an index to reflect the performance of overseas operations of UK listed firms? Why / why not?

6. What types of areas of health and safety performance do you think an index should cover, such as major accident risk, fire risk, employee injuries / ill-health, contractors, road traffic injuries, air traffic safety, etc?

7. Do you have any suggestions on what health and safety indicators could be, or are used?

8. We have developed some initial ideas on possible indicators – see attached. To what extent do you think that each indicator is feasible, valid, useful, acceptable, meaningful etc? Why / why not?

9. Do you have any thoughts as to indicators that might be feasible in the medium to longer term with some minor changes (e.g. specifically recording work-related sickness absence)?



10. Do you have any suggestions as to what might be a valid/feasible indicator for health?

11. HSE would like the index to help in promoting health and safety on the corporate social responsibility agenda. What factors should we take into account to ensure that the index does indeed allow the HSE to do this?

12. Any other comments?



HEALTH AND SAFETY PERFORMANCE INDEX SUGGESTED ISSUES FOR DISCUSSION WITH COMPANIES

INTERVIEWEE:

ORGANISATION:

CONTACT DETAILS: Tel: Email:

Address:

Please explain briefly: • What your organisation does; and • What your own role is.

What role do you think a health and safety index should fulfil?

What should an index be telling stakeholders – investors, (potential) employees, pressure groups, the regulator etc.? (E.g. how well health and safety risks are controlled, standard of welfare provision for workers, whether financial security is threatened by health and safety risks, etc.)

How do you think health and safety in your organisation could benefit (if at all) from a health and safety performance index available publicly?



13. HSE is very keen that the index provides a positive lever for change in health and safety management within organisations which are the subject of the index. What do you think are the key features to ensure that this raises the profile of health and safety management amongst senior managers and directors?

14. This index is intended for use in the UK. Would you / your organisation need an index to reflect the performance of overseas operations of UK listed firms? Why / why not?

15. What practical difficulties or issues of fairness might an index raise for you, and might you have any suggestions for overcoming these difficulties?

16. How is reporting on health and safety currently undertaken within the company, i.e. at site, country or group level? What difficulties might you expect to be encountered regarding issues of reporting, etc.?

Have you / your organisation had any experience using other indices and reporting initiatives, e.g. FTSE4Good, BitC’s Corporate Responsibility Index, etc.? Are there any key lessons learned in using these initiatives that we should be aware of?



17. How would you like see the index being administered? Who do you think should be involved in reviewing the indicators, and how frequently?

18. What types of areas of health and safety performance do you think an index should cover, e.g. major accident risk, fire risk, employee injuries / ill-health, contractors, road traffic injuries, air traffic safety, etc.?

19. Do you have any suggestions on what health and safety indicators could be, or are being used?

20. We have developed some initial ideas on possible indicators – see attached document. To what extent do you think that each indicator is feasible, valid, useful, acceptable, meaningful, etc.? Why / why not?

21. Do you have any thoughts as to what indicators might be feasible in the medium to longer term with some minor changes (e.g. specifically recording work-related sickness absence)?



22. Do you have any suggestions as to what might be a valid / feasible indicator for health?

23. HSE would like the index to help promote health and safety as an aspect of the corporate social responsibility agenda. How does the company view health and safety – is there any link made to CSR currently? What factors should we take into account to ensure that the index does indeed allow the HSE to do this? Would there be any concerns / advantages to making this link more explicit?

24. Any other comments?



SOME POSSIBLE INDICATORS

Introduction This paper provides an overview of indicators that have been suggested and an example of what we think an index might look like. We start with an overview of what types of indicators there are, and then provide a list of indicators suggested by past research and health and safety reporting requirements and finally give an illustration of a health and safety index.

Overview of indicators

Types of indicators

Indicators can be split into a number of types: • Process indicators, such as assessment of management systems • Performance indicators, such as injury rates • Financial indicators, e.g. cost of injury claims • Compliance indicators, fines etc

It is also possible to differentiate between indicators that measure: • The risk posed to the organisation by adverse health and safety events • The risk posed to employees, members of the public, contractors, etc.

A review of past research and reporting requirements provides a list of possible indicators, as summarised below.

Process indicators

Directors’ declaration

This could comprise a statement to the effect that:

An assessment has been completed of the significant health and safety hazards posed by the organisation’s activities and appropriate set of health and safety arrangements are in place to control these hazards. The implementation of these arrangements is monitored and reviewed on a regular basis with action taken to redress any deficiencies and make improvements.



Key management indicators

It has been suggested that an assessment of an organisation’s health and safety management system is the best indicator of future performance. A number of suggestions have been offered on what such as measure could comprise. One option is to specify a small number of key management indicators, such as the level of health and safety representation on the board. This would entail assessing an organisation against a small set of indicators of how well it manages health and safety management, such as:

• Existence of a policy • Completion of a comprehensive risk assessment • Setting of improvement targets • Extent of internal health and safety reporting to the board • Level of health and safety representation on the board • Extent of internal auditing and performance review • Extent of employee involvement in health and safety management and review

Health and safety management system review

This would entail a review of the design and operation of an organisation’s health and safety management system against an “audit” scheme. A practical alternative for some may be confirmation that the organisation operates against recognised health and safety management standards such as OHSAS43 18001 or its equivalent.

Performance indicators

Employee injury rates

Employee injury rates are expressed in a variety a ways. Both the definition of what is an “injury” and the method of calculating a rate vary.

Injury has been defined as

• RIDDOR44 reportable “major” injuries • RIDDOR reportable “over 3 day” injury • Any injury leading to specified minimum amount of lost time from work/normal job

– variously 1 shift, 1 day, 3 days • Any injury requiring first aid • Any recorded injury (usually via the accident book) • Work related road traffic accidents (sometimes including commuting accidents)

Method of calculating rates

• Injuries per 100,000 employees, etc. per quarter, per annum etc. • Injuries per total person hours worked per quarter, per annum etc. • Injuries per person days/shifts per quarter/annum

43 Occupational Health and Safety Assessment Series – internationally recognised occupational health and safety management system specification.

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR) legally requires the reporting incidents leading to defined categories of injuries, illnesses etc to the enforcing authority in the UK.


44


• Injuries per unit of production per quarter/annum

Employee fatality rates

Clearly the injury does not need to be defined, other than it is work related. Variety in methods of calculating the rates exists as above.

Contractor injury rates

How these are calculated varies, often depending on the status of the contractor. Some contractors are very long term on site and are treated very much like employees. Others are only on site for the duration of a specific project. Sometimes information on hours of work of individuals is available to clients, more often not. This clearly affects the options available, but nevertheless they are similar to those for employees.

Absence rates

Part of the cause of absence rate is work related injury and ill-health. There are similar options on calculation of rates as for employee injury rates. However, this is less likely to be stated as a rate against production measures.

Options include

• Days off per employee/100 employees etc. per quarter/annum • Shifts off per employee/100 employees etc per quarter/annum

Rates of work related ill-health

This would be a rate of incidence of work-related ill-health per 100,000 employees.

There are no commonly accepted reliable methods of detecting all types of work-related illhealth. In the UK certain diseases are thought to be well recorded under RIDDOR and the Industrial Injuries Disablement Benefit Scheme. However, these are a small minority of all cases.

Mental ill health

This would be a rate of incidence of work-related mental ill-health per 100,000 employees. There is no agreement about how this could be implemented.

Major loss incident or incident with that potential

Previous research has shown that the quality of management of low frequency major incidents is not necessarily indicated or measured by lost time injury or fatality rates. An option is to devise an indicator of the rate of major loss incidents and/or incidents with that potential.



Some organisations, particularly those operating in major hazard sector such as railways and nuclear power generation, record and report the incidence of incidents such as train derailments, leaks of radioactive material etc. Indeed, there are regulatory requirements to report certain grades of incident. In some cases a rate of incidents is calculated that can be used to compare organisations within a sector, such as comparing between nuclear power generators.

Such indicators could be based on:

• The rate of major incidents per unit of production / movements / year • The rate of reportable major incidents / near misses etc per unit of production /

movements / year (where sector specific)

Coding of organisation at impending risk of “a major loss”

The Standard and Poor financial index provides a code for when firms are thought to be at risk of insolvency/major regulatory sanction. An analogous indicator of a major health and safety threat to the survival or profitability of a company has not yet been suggested. This is considered important because a number of occasions can be identified wherein an organisation has incurred significant loss or collapse due to:

• A critical audit by a safety regulator that undermines confidence in the organisation by customers, the public and investors – with significant direct remediation costs and indirect costs

• A major accident leading to major direct costs and loss of confidence • Discovery of major financial liabilities such as asbestos compensation claims

So, an equivalent code could be devised for noting when there is a major threat to an organisation’s survival due to an actual, pending or high probability of a major financial loss or business interruption due to, for example;

• A major accident causing a major loss of life, damage etc – with associated major direct costs/losses and possibility of loss of confidence in the organisation safety capability

• A critical regulatory intervention that has the potential to cause a loss of confidence in the management of the organisation with subsequent need for major reorganisation costs, loss of business etc.

• A threat to the “licence to operate”, such as a regulator proposing to withdraw an organisation’s operating licence

• Discovery of major financial liabilities associated with (say) injury/ill-health compensation claims, at a level that threatens the organisation’s financial health

For example, a code such as “MLP” for Major Loss Possible could be placed next to an organisation’s listing which would indicate that an event or liability has been reported that meets one of the above criteria.

Financial indicators

Health and safety expenditure

This would be amount spent per employee. There is no agreement about how this could be implemented, in particular how the figure could be identified.



Cost of accidents and ill-health

This would also be expressed as a rate of cost per employee/100,000 employees. There is no commonly accepted costing method.


This would entail reporting the frequency of enforcement actions such as improvement notices and the cost of fines are simple to report, perhaps indexed against the number of employees. However;

• The frequency and cost of fines etc tends to be low and may reflect enforcement policy as much as company performance;

• Fines and prosecutions highlight failures and would not distinguish between “average” and “good” performers

• Fines tend to be low.

Missing indicators Review of past research and reporting requirements does not provide an example of an indicator for:

• Staff welfare • Public health impacts.



Suggested Form of Health and Safety Performance Index

Illustration of indivi ing Company X

j No

No

dual company rat

Overall rating (Scale of 0 to 10: 0 = worst, 10 = best) 7.6

Has a director’s declaration been made? Yes

Does this organisation conduct ma or hazard operations that would be covered by regulations such as COMAH, Nuclear Site Licences, aircraft licensing etc?


The overall rating would be worked out using a collection of separately rated indicators weighted as to importance, illustrated below. Note that the relative importance figures are not in any way suggestions at this stage. They are just to show what an index might look like.

Employee injury rate

Indicators

H&S management system

8

Rating (0 to 10) 7

0.2

Relative importance

0.45

0.22

Weighting*

0.50

1.8

Weighted rating

3.5

Contractor injury rate 5 0.05 0.06 0.3

Employee absence rate 9 0.15 0.17 1.5

Major incident rating N/A 0.1 -Another indicator, e.g. compliance violations 9.5 0.05 0.06 0.5

Overall 1 1 7.6

*Weighting is a simple mathematical adjustment to calculate the index where not all indicators are applicable.

/ loss potential

declaration H&S index Verification

l i is ith

Hi

iis

lf

i

A No Y 7 UW S B Y 9.9 - E C No Y 9 - E D No Y 8 - E E Y 5 - S

Example of a League Table

Companyorganisation


Directors

available Under watch

NOTES Operations that have the potential for major

loss over…

Dec arat onconsistent w

recognised Code X

0 = Lowest score, 10 = ghest score

Someth ng terrible has/

about to happen

S = Seassessment

E = Externally verif ed

Yes

Yes



APPENDIX B: GRI SOCIAL PERFORMANCE INDICATORS - LABOUR PRACTICES AND DECENT WORK

The following core and additional indicators are outlined in the GRI Reporting Guidelines (June 2002) that specifically reveals the aspects occupational health and safety.

Employment

Core Indicator Additional Indicator

LA 1: Breakdown of workforce where possible by region/country, status, employment type and contract type.

LA 2: Net employment creation and average turnover segmented by region/country.

LA 12: Employee benefits beyond those legally mandated.

Health and Safety

LA 5: Practices on recording and notifying of occupational accidents and diseases, and how they relate to the ILO Code of Practice on Recording and Notification of Occupational Accidents and Diseases.

LA 6: Description of formal joint Health and Safety committee, management and worker representatives and proportion of workforce covered by any such committee.

LA 7: Standard injury, lost day and absentees rates and number of work-related fatalities (including subcontracted workers).

LA 8: Description of policies or programmes (for the workplace and beyond) on HIV/AIDS.

LA 14: Evidence of substance compliance with the ILO Guidelines for Occupational Health Management System.

LA 15: Description of formal agreements with trade unions or other bona fide employee representatives covering health and safety at work and proportion of the workforce covered by any such agreements.

Training and Education

LA 9: Average hours of training per year per employee by category of employee (e.g. senior management, middle management, professional, technical, administration, production and maintenance).

LA 16: Description of programme to support the continued employability of employees and to manage career endings.

LA 17: Specific policies and programmes for skills management or for lifelong learning.



APPENDIX C: EXAMPLES OF INDUSTRY SPECIFIC INDICATORS

Safety in the Airline Industry

There appear to be a number of civil aviation safety scoring systems in use globally. A few have been selected and an overview of their structure provided below.

FlightSafe45

This concept was launched in 1997 for a major international financial institution. It was used to objectively quantify the relative safety risk of scheduled passenger airlines based on their past accident record and ten other factors that are related to underlying safety levels. An overall profile of an airline is provided in relation to safety scores, accident records, passenger fleet, other fleets and flight operations.

Features of the Safety Scoring System

• Inclusion of a notional accident

The airlines receive a score that is between 0 and 10, where 0 represents the least safe airlines and 10 a perfectly safe one. However, a perfect score is not attainable as it is assumed that every airline has suffered what is termed an “additional” or “notional” accident above that of what has actually been experienced during the previous 12 years. The design of this is to enable the travel manager to determine the consequences of his/her travel policy in the event that such an accident should occur.

• Safety Multiplier

This safety multiplier is applied to all other risk elements and takes into account both the number and the nature of past accidents and the experience of the airline relative to operations of scheduled flights in the previous 12 years. The safety multiplier is calculated on a sliding scale. It is based on the accident rate per 100 000 landings, and is applied to the sum-total of the other ten factors each of which presently scores a maximum of one and a minimum of zero such that the following results are obtained:

Accident rate per 100 000 landings Score Rate of zero 1.00 Rate of 1 accident 0.80 Rate of 4 accidents 0.60 Rate of 9 accidents 0.40 Rate of 16 accidents 0.20 Rate of 25 or more accidents 0.00

To distinguish amongst the different types of accidents, fatal accidents are counted double whilst minor accidents with no loss of life or serious injury count as one half in the calculations. Only operational accidents are included in the calculations.

For more information on this scoring system and a list and details of airlines, visit www.flightsafe.co.uk/


45

• Individual function scores

There are 10 individual scores that are awarded to determine the overall score. All scores are equally assigned and are weighted between zero and 1.00. They cover the following areas: fleet average age, fleet composition, air traffic control environment, airfield environment, airline operations, regulations, airline ownership, airline management, airline alliances and airline maturity. To give examples of the outcome, British Airways scored 9.10 whilst Qantas Airways scored 8.63 and Zambian Airways 4.96.

Aviation Safety Network (ASN)46

The information gathered and presented on this website is taken from official sources, e.g. national authorities and safety boards. This network covers only accidents and safety issues in airliners, and there is a database of accidents where events have led to damage being sustained by the aircraft which is beyond repair.

Aviation Safety Database

The ASN Safety Database is updated every week and contains descriptions of more than 9 700 airliner, military transport category aircraft and corporate jet aircraft safety occurrences since 1943. The database can be accessed in various ways:

• Type indexes: Airliners, military transport aircraft and corporate jets; • Country index; • Cause (contributory) index; • Airlines index (alphabetical listing by country); and, • Top 50 airlines safety profiles.

Transport Canada Safety Indicators and Targets47

Within the civil aviation programme, there are indicators in place to monitor the level of aviation safety and public confidence in the aviation programme. The indicators reflect accidents per 100 000 hours and fatal accidents per 100 000 hours that are averaged out over a five year period which are then reviewed against a target. These indicators are determined according to sectors within the aviation industry, e.g. airline, commuter, recreational aviation, flight training, etc., and there is an overall total.

46 For more information, visit www.aviation-safety.net/47 For more information, visit www.tc.gc.ca/civilaviation/flight2005/tp13521/indicators.htm


International Nuclear Event Scale

This scale was designed to communicate swiftly with the public in consistent terms regarding the significance of events reported at nuclear installations, and includes events at civilian nuclear installations, any event associated with radioactive material and/or radiation and to any event occurring during transport of radioactive material. This scale reflects experience gained from the use of similar scales in France and Japan, and is used in more than 60 countries.

This scale was designed by an international group of experts under the auspices of the International Atomic Energy Agency (IAEA) and the Nuclear Energy Agency (NEA) of the Organisation for Economic Cooperation and Development (OECD). Events are classified on a scale at 7 levels, where the upper levels (4-7) are categorised as “accidents” and the lower levels (1-3) are termed as “incidents”. Events that have no safety significance are classified below the scale at level 0 and are termed “deviations”. Those events that have no safety relevance are termed “out of scale”. Each level is defined in terms of three safety attributes, i.e. off-site impact, on-site impact and defence in depth degradation48.

The vast majority of reported events are found to be below Level 3 classification. Countries are required to report an event to the IAEA within 24 hours.

48 For more information, visit http://www.nrc.gov/reading-rm/doc-collections/ commission/secys/2001/secy2001-0071/2001-0071scy.html


Scale Criteria or Safety Attributes Examples Off-site impact On-site impact Loss of safety systems

7 Major accident

Major release: Widespread health and environmental effects

1986 Chernobyl nuclear power plant (USSR) accident had widespread environmental and human health effects

6 Serious accident

Significant release: Likely to require full implementation of planned counter measures

1957 Kyshtym reprocessing plant (USSR) led to large off-site release of radioactive material that led to the evacuation of the

Acc

iden

t

surrounding population

5 Accident with off-site risk

Limited release: Likely to require partial implementation of planned counter measures

Severe damage to reactor core/radiological barriers

1979 Three Mile Island (USA) severe damage to reactor core with limited off-site release of radioactive material

4 Minor release: public Significant damage to 1973 Sellafield Accident exposure of the order reactor (UK) release of without of prescribed limits core/radiological radioactive significant barriers/fatal exposure material into off-site risk of a worker plant operating

area 3 Serious risk

Very small release: public exposure at a fraction of prescribed limits

Severe spread of contamination/acute health effects to a worker

Near accident no safety layers remaining

1989 Vandellos nuclear power plant (Spain) damage to plants safety systems due to fire, but no release on or

Inci

dent

off-site 2 Significant spread of Incidents with Incident contamination/overexpo significant failures in

sure of a worker safety provisions 1 Anomaly beyond the Anomaly authorised operating

regime 0 NO SAFETY SIGNIFANCE Deviation Out of NO SAFETY RELEVANCE scale event


Chemical Incident Response Service Guy’s and St Thomas’ Hospital Trust

This incident categorisation scale would be used as a rapid response tool to communicate with the public on the potential health impact relating to a chemical incident. This would easily describe the magnitude of the released chemical substance and the potential severity of the incident, and in this way, also initiate the appropriate level of response from the relevant authorities.

Chemical incidents are categorised according to: • Incident impact in relation to health, environment, resource and overall; • Measurable sum in relation to amount of chemical, number of people affected; and • Type of incident in terms of the chemical hazard, event, location.

The parameters selected on which to base the scale were chosen as this type of information is likely to be available, even if it is initially only in a crude form:

• The number of people potentially exposed; and • The observed severity of the impact on public health which is based on the health

impact severity (HIS) scale.

The same approach as the INES is used in that a single number illustrates the severity of the impact and each category is colour-coded. The difficulties of using a one-dimensional scale are recognised, however it is suggested that this gives an immediate sense of the context of the hazard even if there is no understanding of the construction of the scale (Binzel 2000). This scale is currently being tested by the Chemical Incident Response Service, London49.

49 Eagles, E., Maynard, R. & Murray, V. 2002. A categorisation system to communicate potential public health impacts of acute chemical incidents, Chemical Incident Report, No. 25, pp.9-12 (a publication produced by the Chemical Incident Response Service of the Medical Toxicology Unit, Guy’s and St. Thomas’ Hospital Trust)


Category/Grade Definition Examples 4

Catastrophic incident Incident may result in a devastating impact on human health: • More than 1 000 fatalities • More than 10 000 people with severe or

life threatening symptoms

Bhopal (India) 1994 Cloud of methyl isocyanate released at pesticide plant following runaway reaction when water entered 45 tonne storage tank resulting in over 3 000 fatalities and 170 000 injured.

3 Serious incident

Incident may result in: • Between 10 and 1 000 fatalities OR • Over 100 people with severe or life

threatening symptoms OR • Over 1 000 people with pronounced or

prolonged symptoms OR • Potential exposure of 10 000 people or

more with mild, transient and spontaneously resolving symptoms or even if there are no adverse health effects (because of the potential resource implications required to effectively manage the situation and likely media attention)

Toulouse (France) 2002 Explosion completely destroying a petrochemical and fertiliser factory resulting in 29 fatalities and more than 2 500 injuries

Flixborough (UK) 1974 Cyclohexane oxidation plant severely damaged by a large explosion resulting in 28 fatalities and many injuries

Camelford (UK) 1988 Concentrated aluminium sulphate discharged into a treated water reservoir resulted in a major contamination of drinking water supplies resulting in over 20 000 potentially exposed

2 Moderate incident

Incident may result in: • Less than 10 fatalities OR • Between 1 and 100 people with severe or

life threatening symptoms OR • Over 100 people with mild, transient and

spontaneously resolving symptoms OR • Potential exposure of more than 1 000

people even if there are no adverse health effects (because of the potential resource implications required to effectively manage the situation and likely media interest)

Norfolk (UK) 1991 Fire at a waste plastics factory gave rise to dense smoke plume resulting in 46 casualties and many exposed

London (UK) 1990 Aldicarb contamination of cucumbers served at school lunch resulting in 50 students with gastroenteritis

Greater Manchester (UK) 1997 Elemental mercury led to widespread contamination resulting in 225 exposed and confirmed toxicity in 19

1 minor incident

Incident may result in: • Up to 10 people with pronounced or

prolonged symptoms OR • Up to 100 people with mild, transient and

spontaneously resolving symptoms OR • Potential exposure of between 10 and 1

000 people with no adverse health effects reported (because of the potential resource implications required to effectively manage the situation and likely media attention)

London (UK) 1999 CS gas released at comprehensive school resulting in adverse health effects being experienced by 42 students

Derby (UK) 2000 Leak of petrol in basement of residential property resulted in 42 properties being evacuated with no casualties and no adverse health effects

0 Incident may result in: insignificant incident • Less than 10 people exposed to the

chemical hazard • Little or no impact on the health of the

public


Responsible Care

Responsible Care is the chemical industry's commitment to continual improvement in all aspects of health, safety and environmental (HS&E) performance and to openness in communication about its activities and its achievements. This initiative has been active within the UK since 1989 and is a voluntary initiative undertaken by members of the Chemical Industry Association (CIA).

In the annual questionnaire submitted by the member organisations, the following indicators are sought specifically in relation to health and safety, and the explanations are provided below.

• Fatalities – total deaths relating to industrial accidents, include highway/transport (on company business); and an instantaneous work related event or exposure, leading to death within one year.

• Major injuries and conditions reportable under RIDDOR 95 Regulation 3(1) b-d and Schedule 1, and the inclusion of all major injuries reportable under RIDDOR irrespective of whether time was lost.

• 1 day reportable accidents should include any person not at work on a scheduled day or shift who has suffered an injury as a result of an accident/exposure arising out of or in connection with work, resulting in at least one day/shift being lost. (This should exclude fatalities and major injuries and conditions).

• Over 3 day reportable accidents under RIDDOR 95 Regulation 3(2) which excludes fatalities and major injuries and conditions.

• Reportable diseases under RIDDOR 95 Regulation 5(1)(a) and Schedule 3 Part 1. • Notifiable dangerous occurrences under RIDDOR 95 Regulation 3(2)(e) and Schedule 2

Part 1.

These indicators are also reported in relation to employees and contractors, where employees include all permanent full or part time staff, including trainees and apprentices. Contractors are any non-company employee or individual who is providing a service to the company on the company premises. This definition does not differentiate between a contractor’s direct employees and those of any subcontractor.

Since 1999 a new indicator on illness data, the Occupational Illness Frequency Rate (occupational health) has been strongly supported by members which goes beyond legal reporting requirements. This is measured in terms of own employees (full and part-time). The categories under which number of cases per year is recorded by which the Frequency Rate is calculated are:

• Occupational illnesses caused by chemical agents (e.g. respiratory illnesses, skin diseases, etc.);

• Occupational illnesses caused by physical agents (e.g. upper limb disorders, occupational hearing loss, etc.);

• Occupational illnesses caused by biological agents; and • Occupational illnesses other than those listed above.


Safety in the Railway Industry There are a number specific indicators relating to safety performance reported on by the industry. These include:

• Accidental equivalent (passenger, worker & public) fatalities per million train mile;

• Five year average number of collisions and derailments per million train miles;

• Signals passed at danger per million train miles – split into category A and B SPADS

• Accidental passenger fatalities per million train mile;

• Accidental passenger major injuries per million train mile;

• Assault and robbery per million train miles;

• Public fatalities per million train miles;

• Workforce fatalities per million train mile, with sub measures for trackside and traincrew.

The International Association of Geophysical Contractors (IAGC)

Annual statistics representing the worldwide activities are submitted by member companies (since 1998), and in order to protect the individual companies, the data is aggregated to provide an industry datum. By employing such a strategy, it aims to encourage all members to continually improve their safety performance. It also aims to identify those areas in marine seismic operations which pose the highest risks. The high level indicators include: • Exposure hours (million);

• Total vessel months;

• Fatalities;

• Lost Time Injuries;

• Recordable Incidents (fatalities, LTI, RWDC, MTC);

• Number of companies reporting;

• Estimated industry sample level;

• Number of individual vessel HSE audits conducted with a senior manager as part of the audit team;

• Number of crew personnel who attended an HSE management course in the last three years to at least MM2 level of OGP HSE Competence and Training Guidelines;

• Number of hazard identification reports made in the year;

• Identification of those companies contributing and those who did not.



APPENDIX D: PILOT FEEDBACK QUESTIONNAIRE

Pilot Health and Safety Performance Index As you are aware, the Health and Safety Executive (HSE) has commissioned Greenstreet Berman to develop a health and safety management index.

The index is intended for use by a range of stakeholders such as investors (in particular for socially responsible investments) and trade unions to assess an organisation’s health and safety management performance.

It is also hoped that this will raise the profile of health and safety amongst Directors (or their equivalents) of larger organisations both indirectly via pressure from investors and other external stakeholders, but also directly as organisations use the Index to benchmark their performance against others.

Aims of these discussions A number of organisations from differing industry/service sectors have been invited to take part in the trial of the Index. Your views about your experience using it will help to shape the final Index that is submitted to HSE.

We would appreciate your views on a number of areas, including: • The feasibility of gathering the information for the indicators; • The validity of the index as an indicator of health and safety performance; • The ways in which the Index could be improved, and • Anything else you wish to tell us!

What we would like you to do Please consider the questions on the following pages. These are not intended to be exhaustive, nor do we expect an opinion on every question. Please complete what you would like, and feel free to make annotations on the hard copy of the Index too if that is easier. Please return your comments to us using our free post address (Greenstreet Berman Ltd, FREEPOST NAT2379, Reading RG1 4BR) or alternatively fax it to us on 0118 938 7729. It would help us if you made copies for yourself before sending.

A Greenstreet Berman consultant – either Joscelyne Shaw or Catherine Beardwell – will contact you to discuss your views in more depth. If they have not done so already they will make an appointment with you to do this.

We expect the discussions to take up to 45 minutes, but this will of course in part depend on your views.

Greenstreet Berman – Who are we? Greenstreet Berman is an independent research and consultancy organisation working on this research on behalf of HSE. Any information we receive from you will be collated into our report to HSE, unless you specifically ask us to anonymise your opinion.

If you have any queries about this research, please do ask Joscelyne Shaw or Catherine Beardwell. Alternatively contact Sara Marsden (T 0118-938-7702) who is the project manager at Greenstreet Berman. The project officer at the HSE is Alan Morley (T 020-7717-6168).



Health and Safety Performance Pilot Index

FEEDBACK FORM

We need feedback to make the Index practical and useful. Please complete this questionnaire and return it using the Freepost address given or fax details as listed below.

Please use extra sheets if needed.

Thank You.

Please return to:

Greenstreet Berman FREEPOST NAT2379 Reading RG1 4BR

OR

Fax: +44 (0)118 938 77 29

CONTACT PERSON:

JOB TITLE:

ORGANISATION:

INDUSTRY SECTOR: NO. OF

EMPLOYEES

CONTACT DETAILS:

Tel: Email:

Address:

Postal Code: City:



To what extent do you think that the Index is

Please circle one answer per row

Completely

agree

Partially

agree

Neither

agree nor

disagree

Partially

disagree

Completely

disagree

a. Practical? 1 2 3 4 5

b. Valid? 1 2 3 4 5

c. Useful? 1 2 3 4 5

d. Acceptable? 1 2 3 4 5

e. Meaningful? 1 2 3 4 5

Why / why not?

Do you have any suggestions for making it more practical, valid, useful, acceptable or meaningful?

Do you feel that the benefits of completing the Index are proportionate to the effort taken to complete it?

Please circle one answer

Benefits greatly

outweigh effort

Benefits outweigh effort

Benefits roughly

proportionate to effort

Effort outweighs benefits

Effort greatly outweighs benefits

1 2 3 4 5

Why / why not? And what could be done to increase benefits and / or reduce effort?



How useful might the index be as a lever to promote health and safety within your organisation?

Please circle one answer

Very useful Quite useful Unsure Not useful Counter productive

1 2 3 4 5

Why / why not? And what would make it more useful?

How useful would you say the index will be for investors and other stakeholders outside of your organisation?

Please circle one answer per row

External stakeholder (please specify e.g. investor, TUs)

Very useful

Quite useful Unsure Not useful Counter-

productive

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

Do you have any comments / clarification?

Does the Index cover an appropriate range of health and safety management issues? Why / why not?



Do you consider that the questions within each question set provide an adequate range of response? Why / why not?

For the purposes of the trial you were asked to restrict your responses to your UK operations. How feasible would it be to apply the Index to your overseas activities (if applicable)?

Would you be happy for your index result (not of this pilot) to be published, in a similar way to the Standard and Poor credit ratings for instance? Why / why not?

How clear were the instructions and guidance provided for filling in the Index? Please circle one answer

Very clear Quite clear Neither clear nor unclear

Quite unclear Very unclear

1 2 3 4 5

Do you have any suggestions for improvements in the guidance?



How many person hours / days did it take to complete the Index? Please circle one answer or insert a figure

Less than 2 hours

2 – 4 hours

½ to 1 day

1 – 1½ days Over 1½ days – please specify

1 2 3 4 How long?

Any further comments / clarifications

Which staff roles were involved in the completion of the Index?

You’ve been asked to supply information regarding your own employees’ sickness absence rates. What would you / others need to do in order to enable you to supply this information in relation to the contractors you use (if applicable)? Could this be feasible?

Are there any improvements (not noted elsewhere) that could be made to the Index?



If not already mentioned, do you have any views about how a health and safety management performance index might be implemented?

If you calculated your Index ‘score’ yourself, how straightforward did you find doing it? Any comments on our approach?

Any other comments?

Thank you very much for your time in completing this questionnaire!



APPENDIX E: POSTER PRESENTATION TO IIIEE NETWORK




Developing a Health & Safety Performance Index

For use by business, investors, employees, the regulator and other stakeholders

The aim of a Health and Safety Performance Index is to enable corporate stakeholders to make decisions based on sound information regarding organisations’ health and safety performance. The HSE’s intention is that this

Index gains universal acceptability among investors, insurers, workers and other stakeholders. As well as being of interest to external stakeholders, the Index will assist organisations with their own health and safety

management. The Index will enable employers to benchmark their performance against others in their industry sector, or against their own performance over a number of years.

Outlining the Project Framework Who is the Client? Health and Safety Executive

Define project scope

Broad stakeholder Consultation with

The UK Health and Safety Executive (HSE) is the main government body responsible for the regulation of risks to health and safety arising from work activity in consultation

companies Britain. Their mission is to ensure that risks to people’s health and safety from work activities are properly controlled. They are responsible for looking after

Develop Draft health and safety in nuclear installations and mines, Index factories, farms, hospitals and schools, offshore gas and

oil installations, the safety of the gas grid and the movement of dangerous goods and substances, railway safety, and many other aspects of the protection both of

Trial Draft Index workers and the public.

What is the Context? Review and Revitalising Health and Safety Strategyrefine Index

In June 2000, the UK government launched its strategy

Key Factors on Revitalising Health and Safety in which it set targets for improving health and safety performance over the next decade. These include:

To produce an index that is valid and feasible, the Index • Reducing the number of working days lost per 100 needs to ensure that it: 000 workers from work-related injury and ill health • Complements other CSR initiatives; by 30% by 2010; • Avoids duplication; • Reducing the incidence rate of cases of work• Incorporates standardised performance measures as related ill health by 20% by 2010;

well as process measures; • Reducing the incidence rate of fatalities and • Is comparable and differentiates between companies; major injuries by 10% by 2010; and • Reflects the global nature and needs of firms; • Achieve half the improvements under each target • Provides a variety of options for use, allowing for by 2004.

varying resource availability on the part of users; • Is not unacceptably demanding in terms of resources; As part of its Revitalising Health and Safety strategy, • Is compatible with furthering the broader aims and HSE has begun to explore the benefits of engaging with

objectives of Revitalising Health and Safety; and the Corporate Social Responsibility (CSR) sector and • Is acceptable to all stakeholders. major investors to raise the profile of health and safety.

For more information, please contact Joscelyne Shaw greenstreet berman [email protected] www.greenstreet.co.uk T +44 (0)118 938 7712 T +44 (0)118 938 7700


APPENDIX F: SUMMARY OF FTSE GLOBAL CLASSIFICATION SYSTEM

A growing list of stock exchanges and investment houses use this classification system developed by FTSE. The Handbook was published in 2002 and is available from the FTSE website50 .

Classification Structure

Companies are allocated to sub-sectors which most closely describe the business which is determined by the proportion of overall profit. There are: • 10 economic groups (general economic theme, e.g. Financials)

• 36 industrial sectors (general industrial theme, e.g. Insurance)

• 102 industry sub-sectors (homogenous groups, e.g. Re-insurance)

The economic groups and industrial sectors are listed below, and are used to classify those companies participating in the piloting of the Index.

50 www.ftse.com


Economic Group Industrial Sectors

00 Resources 04 Mining 07 Oil & Gas 11 Chemicals

10 Basic Industries 13 Construction & Building Materials 15 Forestry & Paper 18 Steel & Other Metals 21 Aerospace & Defence

20 General Industries 24 Diversified Industrials 25 Electronic & Electrical Equipment 26 Engineering & Machinery

30 Cyclical Consumer Goods 31 Automobiles & Parts 34 Household Goods & Textiles 41 Beverages 43 Food Producers & Processors

40 Non-Cyclical Consumer Goods 44 Health 47 Personal Care & Household Products 48 Pharmaceuticals & Biotechnology 49 Tobacco 52 General Retailers 53 Leisure & Hotels 54 Media & Entertainment

50 Cyclical Services 58 Support Services 59 Transport 63 Food & Drug Retailers 67 Telecommunication Services

70 Utilities 72 Electricity 77 Utilities – Other 81 Banks 83 Insurance 84 Life Assurance

80 Financials 85 Investment Companies 86 Real Estate 87 Speciality & Other Finance 89 Investment Entities

90 Information Technology 93 Information Technology Hardware 97 Software & Computer Services


APPENDIX G: SRI COMMUNITY ACTORS – A SELECTION

Some examples of various SRI stakeholders, e.g. fund managers and indexes, are outlined briefly below.

Morley Fund Management Morley Fund Management is an independently managed London based asset management business that manages more than £107 billion. Morley Fund Management has an SRI team of five fund managers and four specialist research analysts, and they will not invest in a company until it has been reviewed and approved by this SRI team.

In May 2002, Morley published its first Sustainability Matrix which has been used to rank the FTSE100 companies according to their environmental and social performance. This matrix is used by the fund manager to engage with companies to encourage improvement and as a tool to select companies for inclusion in the Morley Sustainable Future Funds. The Matrix aims to: • Encourage companies to improve their social and environmental performance;

• Protect and increase shareholder values by providing another tool to assist in the analysis of a company;

• Provide clear and transparent analysis of a company’s social and environmental policies;

• Encourage and stimulate debate and continue to raise awareness of CSR.

The sustainability of the business is rated from A to E where A equates to the company’s core business provides a sustainable solution providing some type of social or environmental benefit, e.g. renewable energy, healthcare and educational services. An E grade illustrates that the core activity of the company is in conflict with sustainable development. The management vision and strategy are subsequently graded from 1 to 5 where 1 is an excellent rating and 5 is the poorest rating. To obtain a 1 a company must show it has a clear vision of sustainable development and is working hard to achieve it. No FTSE100 company gained a 1 or a 5.

Insight Investment Insight Investment is another investment management company responsible for managing £68 billion. They have an SRI team of seven responsible for analysing companies and developing specific initiatives by themes, e.g. toxic chemical usage, corruption, and most recently they have been working on labour standards within particular sectors and boundaries. Across the entire operation a commitment has been made to CSR in that environmental, social and ethical aspects must be taken into consideration. The company perceives itself to play a role in facilitating improvements within the companies that they invest.

FTSE4Good FTSE is one of the world’s leading index providers and introduced an index series FTSE4Good to assist and facilitate socially responsible investment in September 2001. The FTSE4Good selection criteria cover: • Working towards environmental sustainability;

• Developing positive relationships with stakeholders;

• Upholding and supporting universal human rights.


The companies are assigned a high, medium or low impact weighting according to the industry sector. The indicators are then aligned in relation to policy, management and reporting aspects, with a similar approach as adopted by GRI in that there are core indicators and additional “desirable” indicators. The weightings are not made explicit. Unlike DJSI this index series is exclusionary in that companies from the tobacco, weapons and firearms and nuclear power are excluded. Companies are reviewed on a semi-annual basis (March and September).

The social indicators focus on equal opportunities and diversity at a policy level, provision of evidence for health and safety systems which would include one or more of awards, details of training, or published accident rates, as well as training and employee development.

The Ethical Investment Research Service (EiRIS) independently researches the criteria for the index series. The information on the company is gathered from a number of sources including: • Questionnaire;

• Publicly available company documentation;

• Media and other stakeholders.

The FTSE4Good also provides companies with some insight into how they are planning to adjust the criteria through a publication “Way Forward” that is freely available. This is often related to: • Refinement in principles and codes;

• Performance measures (recognising such work as undertaken by GRI particularly with respect to the development of metrics);

• Balance of criteria and raising the existing standards.

Consideration of health and safety is captured under evidence within management systems that can be acknowledged by one or more of the following: • Awards;

• Details of health and safety training;

• Published accident rates;

• Assigning responsibility for health and safety to a senior manager.

Dow Jones Sustainability Indices

Since the inception of the DJSI in 1999, these indices have been tracking the performance of the top 20% of the companies listed on the Dow Jones STOXX 600 Index in terms of sustainability. These indexes are based on the concept of sustainability as being criteria for investment as offering mutual benefit to both companies and investors derived from the assessment of opportunities and risks derived from social, environmental and economic dimensions.

The assessment process, known as the Corporate Sustainability Assessment is based on information gathered from a number of sources:

• Online questionnaire (information is later verified);

• Company documentation, e.g. policies and reports;

• Media and stakeholders, e.g. publicly available materials such as press releases, articles, stakeholder commentary;


• Direct contact made by analysts.

The research and analysis of the companies listed on the DJSI Indexes is undertaken by SAM51

and the Corporate Sustainability Assessment is externally verified by PricewaterhouseCoopers.

The criteria identified for the assessment process are made in relation to each dimension of sustainability, namely economic, societal and environmental, and inclusion of industry specific criteria are made in relation to these overall categories. The criteria are determined according to accepted standards, best practice and audit procedures both universally as well as in relation to industry sector. The general criteria constitute 60% of the assessment, with the industry specific criteria taking into account challenges and trends affecting the specific industry and make up the remaining 40% of the assessment.

A pre-defined scoring and weighting system structure is in place that calculates the total corporate sustainability score in relation to the above process. Once a company has been listed, they are monitored continuously.

51 Sustainable Asset Management



Health & Safety Performance Index – Final


Appendix H

The Health and Safety Performance Index

Greenstreet Berman Ltd. 1 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



Greenstreet Berman Ltd. 2 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QSTel 0118 938 7700 Fax 0118 938 7729



1. Introduction to the Pilot Index Version 2 (Revised) There is increasing expectation that employers take their health and safety responsibility seriously as a component of wider social responsibility. There is a general increase in demands for employers to be more transparent and accountable with regard to their actions in the workplace environment. This Index will assist external stakeholders in assessing how well an organisation is managing its risks and responsibilities towards workers and the public. Internally it can be used as an indicator of performance and, over time, progress in health and safety management.

This Index is designed to give a measure of an organisation’s health and safety performance. It includes and combines measures both of outcomes (e.g. accident rates) and of management processes to give a fair reflection of an organisation’s overall performance in health and safety management.

The index is at present for use for operations in the UK, but has been designed with the option to extend this to include global operations in the future.

Who will use the index and why? The results of the Index can be used by a range of stakeholders with an interest in assessing how well an organisation is managing its health and safety risks. This is in particular one aspect of corporate social responsibility.

It may be used by such stakeholders as the following:

• Investors choosing stocks in companies who have good risk management, or those seeking those taking their corporate social responsibility seriously

• Employers wishing to advertise their good performance in corporate social responsibility

• Employers wishing to benchmark their health and safety performance against others, or themselves over time

• Potential employees wanting to consider a company’s performance before taking up employment

• Insurers deciding premiums

• Regulators considering the need to influence senior executives’ decisions about health and safety.

As well as being of interest to external stakeholders, the Index can assist organisations with their own health and safety management. The Index enables employers to benchmark their performance against others in their industry sector, or against their own performance over a number of years.

It is not, however, the aim of the Index to provide guidance on effective health and safety management. Organisations seeking guidance of this kind should refer to HSE publication ‘HS(G)65 Effective Health and Safety Management’, OHSAS 18001, BS 8800 or similar. Greenstreet Berman Ltd. 3 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



2. Index structure & example results Overall structure The Index is made up of 5 sub-indicators, namely;

1. Health and safety management (including worker involvement)

2. Injury rate statistics

3. Employee absence rates

4. Occupational health management

5. Major incidents.

The overall Index result is calculated using the results (ratings) from these indicators. They are weighted according to importance e.g. the health and safety management indicator is considered the most important so has a higher weighting than the other indicators.

The information requested is a mixture of numerical and qualitative data. Where qualitative data is sought, a range of responses are provided from which you can select the appropriate ones.

The qualitative and quantitative information you provide is subject to a number of calculations to produce a final Index “score”. The calculations are set out in a separate “Calculating the Index” booklet.

Under Watch Flag A final part of the index is an indicator of whether there are any particular concerns about an impending major event. This might include an actual disaster, but also includes other events such as an adverse report from a regulator. This will not contribute to the index final score but instead raises an “Under Watch” flag, if there are any such concerns. This section of the index asks you to declare whether your organisation has suffered such an event and what actions you are taking in response to the event.

Directors’ declaration We ask that you note whether the Board has made a declaration that it has assessed the health and safety hazards associated with the organisation’s activities and has implemented an appropriate set of risk management controls.




Highly regulated activities We ask that you declare whether you carry out any activities that are subject to special regulations, as listed in this document.

Example results & presentation Individual company results

Once the Index goes ‘live’, the score that each company reaches would be made available to all stakeholders, for example, via the internet. There are likely to be options available to companies for providing more detailed information about their performance.

Illustration of individual company rating

Company X

Overall index

Yes

No

No

S

6.2 (Scale of 0 to 10: 0 = poor, 10 = excellent)


Does this organisation conduct major hazard operations that would be covered by regulations such as COMAH, Nuclear Site Licenses, aircraft licensing, etc.?

"Under Watch" due to major event?

Self assessed or externally verified (S or E)

Example of calculation of overall index

The overall index is derived by summing the weight ratings for each of the 5 indicators, as shown below.

Indicators

H&S management system

Employee/contractor injury rate

Employee absence rate

Occupational health management

Major incident rating

Overall

Rating (0 to 10)

7

4.3

5.5

4

8

Weighting

0.5

0.125

0.125

0.125

0.125

1

Weighted rating

3.5

0.54

0.69

0.5

1

6.2




Comparison of organisations

The results for all responding organisations will be presented in the form of an A to Z listing, as illustrated below.

Example of an A to Z listing

Sector Company / organisation

A

B

C

D

E

Directors declaration available


recognised Code

Y

Y

Y

Y

Y

H&S Index

0 = Lowest score

10 = Highest score

7

9.9

9

8

5


Y = Yes

N = No

N

Y

N

N

Y

Under Watch Verification

Has a major event

occurred?

S = Self assessment


UW S

- E

- E

- E

- S




3. How to complete this Index Introduction The Index is made up of five (5) distinct indicators, and the Under Watch Flag. There are various styles for each of the indicators. The first – the management indicator – is divided into 11 sub-sections with each having an equal weighting. Within each subsection there are a group of statements to which responses can be given. The second and third indicators – injury and employee absence rates – ask for numerical data on injuries, employee and contractor numbers/hours. The major incidents indicator requires the use of a descriptive scale of incidents ranging from small anomaly to major catastrophe.

Instructions At present the Index is applicable to UK operational aspects of organisations only. It has however been designed with the future in mind for an extension to global operations.

For the first – management – and fourth – health – indicators you are presented with a series of statements. Please tick each of the statements that are true of your organisation. The idea is that your “score” is cumulative so it will be entirely valid to have ticked all the responses within each section.

For the second – injury rate – and third – absence rate – we require data on both injury / absence rates, and numbers of employees and contractors so that we can standardise results. Please enter the data from your company as requested.

For the fifth – major incident – a scale of incidents is described. Please consider whether your organisation has had any such incidents and if so enter appropriate numbers against the relevant categories. We will use employee numbers again to standardise these results.

For the under watch flag, please complete the declaration having read the description provided of what type of incident would put your organisation “under watch”.

Guidance notes are provided with each question to assist you in responding.

Calculating the Index score We have a computerised model available for anyone who wishes to calculate their final Index score themselves.

External verification The Index operates on a “self-completion” basis. You are not asked to provide supporting documentation. You do however have the option for an external verification of your score in order to increase stakeholder confidence. This is your decision, and should you choose external verification your Index results will make that very clear.







The Index







INDICATOR 1 Health and Safety Management




Introduction We consider the management indicator to be the most important of the Index components. It therefore contributes a half of the final index score.

It is split into 11 components, each equally weighted within the management indicator. The first nine are headline indicators – those factors which we believe give the best indication of an organisation’s performance. On the whole, though not exclusively, they are relatively strategic.

One component (1.10) gives credit for a developed management system. If you are not sure if your organisation has a recognised management system in place, you will find a set of supplementary guidance on management systems (starting on page 51 of this document) which explore the elements of a health and safety management system you do have in place. From this you can tell if your management system is equivalent.

Instructions Each component is made up of a series of statements describing a factor which influences health and safety performance. There are three responses possible to each statement, i.e. “Yes”, “Some” or “No”.

It would be considered appropriate to select “Yes” if the statement is true most (e.g. approximately four-fifths (or 4/5)) of the organisation in terms of sites, employees, significant hazards, etc.

There is an option to select “Some” to reflect the organisation’s position in relation to a statement. This option is intended for organisations that are well on the way to achieving a “Yes” (e.g. applicable to approximately two-thirds (or 2/3)). It could be appropriate, for instance, if there are several initiatives being undertaken across the organisation, business areas or units but has not quite reached all parts of the organisation; or that this programme applies to most (e.g. approximately two-thirds (or 2/3)) but not all of the workforce.

For each component please:

1. Consider each statement

2. Tick the box you consider most appropriate for your organisation

3. Enter the total number of ticks in the boxes provided at the bottom of each column.

Note that the indicator works cumulatively so that it is possible that you could tick all statements as true – this indeed would give you the maximum score.




1.1 How are health and safety targets formulated?

Please tick as appropriate YES SOME NO

a. Written targets include compliance with health and safety regulations

b. Targets are aimed at avoiding any reduction in health and safety standards

c. Targets are defined for the reduction of injury, ill-health and other incidents

d. Targets are defined to achieve nationally and internationally recognised standards of health and safety management in all aspects of business

e. Targets are defined to become or equal the performance of industry leaders

f. Targets are defined for continuous improvement

g. An aspirational target of zero injuries / ill-health is defined

h. The Board1 specifically approves the health and safety targets set

i. The Board1 debates what health and safety targets should be

1.1 Total

1 Board or other equivalent “directing” body of an organisation - if this organisation has more than one board making relevant strategic decisions please consider these statements in respect to any of the relevant boards in this organisation. Greenstreet Berman Ltd. 13 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.2 How is health and safety represented at the board (or equivalent)?

Note - In this section “Board” includes any equivalent “directing” body of an organisation.


a. The board collectively and explicitly accepts responsibility for health and safety

b. A senior health and safety manager reports to the board as events demand (in addition to any regular scheduled reporting if applicable)

c. A senior health and safety manager (not a member of the board) reports to the board on a regular scheduled basis (in addition to any event prompted reporting)

d. A member of the board has been allocated responsibility for health and safety

e. A member of the board has been appointed as the “Director of Health and Safety” who proactively directs health and safety

f. A Director of Health and Safety, who is a member of the board, reports regularly back to the board on strategic issues relating to health and safety

g. The Board reviews the organisation’s health and safety management arrangements in order to improve its health and safety performance

1.2 Total




1.3 What is the level of health and safety reporting to the board?


a. Reporting to the board occurs in the event of a major/significant health and safety problem/incident

b. The board are given annual statistics on, for example, injury rates and prosecutions

c. The board are given quarterly (or more frequently) statistics on, for example, injury rates and prosecutions

d. The board are given the results of internal or external audits / inspections

e. The board are given reports on all Major / Fatal injuries and serious incidents

f. The board are given reports on progress against health and safety targets

g. The board are given reports on the performance of key contractors / suppliers of services2

N/A

h. The board are given reports on the health and safety performance of key suppliers of goods3

N/A

1.3 Total Add to your “Yes” total

2 Key suppliers of services / contractors are organisations which supply 10% or more of services and those who provide services where high risk / licensed operations are core to their service e.g. asbestos removers, scaffolding/construction/maintenance activities, agricultural activities, transport by road, etc. If it is less than this amount, select n/a. 3 Key suppliers include organisations who supply 10% or more of this organisation’s goods. If it is less than this amount, select n/a. Greenstreet Berman Ltd. 15 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.4 What is the level of public health and safety reporting?

This organisation actively makes the following information available to the general public


a. Annual statistics on injury rates, serious incidents (e.g. fires), sickness absence rates and prosecutions

b. Information on results of internal and external audit, such as ISRS ratings

c. Information on achievement of recognised health and safety management systems standards, such as 18001 or HS(G)65

d. Reports on progress against health and safety targets

e. Reports on the health and safety performance of key contractors / suppliers of services2 above, e.g. contractor injury rates

N/A

f.

Reports on the health and safety performance of key suppliers of goods3 above, e.g. % of suppliers complying with company health and safety requirements

N/A

1.4 Total Add to your “Yes” total




1.5 To what extent has the company selected or formulated health and safety performance standards and requirements?

Performance standards which:

• allocate specific responsibility

• explain what is to be done

• how and when it is to be done

• detail the expected result

have been explicitly set and recorded for:


a. Controlling the design, selection, purchase and installation of plant, materials and substances used by the organisation, and the selection of contracting organisations

b. This organisation’s significant occupational health risks, e.g. VDUs, other repetitive type injuries, stress, chemicals, noise, etc.

c. This organisation’s significant personal safety risks, e.g. working alone, working at height, electrical safety, etc.

d. General fire safety

e. Special / high consequence hazard safety, e.g. fire, legionella from air conditioning / cooling / water systems, asbestos management, chemical process safety, aviation, terrorism

f. Transport safety, including company related driving on highways

g. Staff welfare

h. Contractor’s4 health and safety risk

i. Controlling the risk to people outside the organisation from products / services supplied covering design and safe use, delivery, transport and installation, cleaning and maintenance (as appropriate)

1.5 Total

4 Workers directly engaged in supplying services to your organisation. Greenstreet Berman Ltd. 17 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.6 To what extent are health and safety plans developed?


a. Health and safety improvement plans are developed for each site or to cover all activities

b. Health and safety plans are reviewed and updated at least annually

c. Health and safety plans are developed in collaboration with the workforce

d. At least one board director is actively involved in developing and debating the content of health and safety plans

e. The Board endorses health and safety plans

f. The Board actively debates the content of health and safety plans

g. Health and safety plans are published to the workforce / representatives

1.6 Total




1.7 To what extent are the workforce involved in health and safety?


a. All employees are represented on health and safety matters by safety representatives and / or employee representatives, either appointed by Trade Unions or chosen directly by the workforce

b. The organisation consults safety / employee representatives for their views on health and safety matters, prior to the identification of solutions to problems (i.e. at the stage where outcomes can still be changed)

c. The company has a joint staff-employers’ health and safety committee with senior management leadership which deals with strategic health and safety issues

d. The majority of safety / employee representatives have recognised qualifications in health and safety or are working towards them, or have been on health and safety courses for safety / employee representatives beyond introductory level such as the TUC Stage 2 course, or the TUC Certificate in Occupational Health and Safety course

e. The organisation formally and in writing allocates safety / employee representatives time to carry out their role, including time away from other work for training, and makes middle and line managers aware of the need to honour this

f. Safety / employee representatives are involved in deciding on and setting health and safety targets

g. Safety / employee representatives are involved in carrying out risk assessment

h. Safety / employee representatives are involved in carrying out health and safety audits

i. Safety / employee representatives are involved in investigations of accident and near miss incidents, and any cases of occupational ill-health

j. We have a formal partnership agreement with the Trade Unions which specifically and explicitly includes health and safety

k. The board (or its equivalent) actively seeks and considers the views of workers prior to strategic changes which may affect health and safety

1.7 Total Greenstreet Berman Ltd. 19 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.8 How is health and safety management performance verified?


a. The company’s health and safety management system is externally audited on a regular basis5

b. The board level management of health and safety is subject to audit

c. There is an ongoing process of independent internal health and safety auditing of management arrangements using a recognised / systematic method, such as HQ audits of sites

d. The health and safety management arrangements of key contractors / suppliers of services6 are assessed

e. The health and safety management arrangements of key suppliers of goods are assessed

f. The health and safety management of organisational change7

is subject to assessment using a recognised method / guidance

1.8 Total

5 Inspection by health and safety regulators or HQ function (see option below) does not count for this. 6 Key contractors / suppliers of services are organisations which supply 10% or more of services to this organisation and those who provide services where high risk / licensed operations are core to their service e.g. asbestos removers, scaffolding / construction / maintenance activities, agricultural activities, transportby road, etc.7 For instance, downsizing workforce by 10%, reorganising management structure, etc.Greenstreet Berman Ltd. 20 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.9 How is health and safety performance monitored and reviewed?


a. Employee injury rates are benchmarked within the sector and between sites, and tracked over time

b. The workforce are consulted on the acceptability of health and safety performance

c. There is root cause analysis of all significant accidents8 , fires, incidents and cases of ill-health

d. Contractors’(i.e. suppliers of services) injury rates are benchmarked within the sector and between sites, and tracked over time

e. Absence rates are benchmarked within the sector and between sites, and tracked over time

f. The rate of major incidents (where applicable) are benchmarked within the sector and between sites, and tracked over time

g. Sector specific health and safety measures9 are benchmarked within the sector and tracked over time

h. The board debates the implications of results of health and safety performance monitoring on a regular basis

1.9 Total

8 All major injuries, deaths and incidents with potential for deaths.9 Radiation dose, train collisions, aircraft near misses, nuclear reactor trips, hydrocarbon leaks, etc.Greenstreet Berman Ltd. 21 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.10 To what extent is there a health and safety management system?

Are all aspects (planning, implementing, organising, monitoring, etc.) of health and safety at ALL SITES covered by a recognised management system, such as HS(G)65, OHSAS 18001, ISO 90001, EMAS, all elements of ISRS, Business Excellence Model, the CIA’s Responsible Care, etc.

*Please tick as appropriate and follow the instructions YES* Please specify which management systems are in place

OR

SOME* Selecting this option indicates that this organisation is well on its way to achieving a “Yes” (e.g. approximately two-thirds (or 2/3)).

If there is some uncertainty regarding this option, please see the supplementary questions (page 49) for guidance.

OR

NO* If you’re not sure please see supplementary questions (page 49) for guidance.

Where you have some elements of a management system but you are not sure it amounts to a “some”, you can complete the questions to

determine a score.




1.11 Procurement Indicator – do you require good health and safety performance of those who supply to you goods and services?

Questions related to Key Suppliers of Services/Contractors10


a. This organisation requires all key contractors / suppliers of services to have a recognised management system

b. This organisation requires all key contractors / suppliers of services to show improving accident/lost time injury statistics.

c. This organisation requires11 all key contractors / suppliers of services to show evidence of reducing levels of illhealth caused by work

d. This organisation requires all key contractors / suppliers of services to have established mechanisms for employee consultation

e. This organisation monitors the health and safety performance of key contractors / suppliers of services when providing services for us

f. When considering selection / re-selection of key suppliers of services, this organisation actively considers their previous health and safety performance record

1.11 Total

g. WE DO NOT USE ANY KEY SUPPLIERS OF SERVICE

10 Key suppliers of services / contractors are organisations which supply 10% or more of services and those who provide services where high risk / licensed operations are core to their service e.g. asbestos removers, scaffolding /construction / maintenance activities, agricultural activities, transport by road, etc.11 “Requires” by some threat of enforceable sanction. Greenstreet Berman Ltd. 23 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



1.11 Procurement Indicator – do you require good health and safety performance of those who supply to you goods and services? (continued)

Questions related to Key Suppliers of Goods12


h. This organisation requires11 above all key suppliers of goods to show improving accident/lost time injury statistics

i. This organisation requires all key suppliers of goods to show evidence of reducing levels of ill-health caused by work

j. This organisation requires all key suppliers of goods to have established mechanisms for employee consultation

k. This organisation monitors the health and safety performance of key suppliers of goods when providing services for us

l. When considering re-selection of key suppliers of services, this organisation actively considers their previous health and safety performance record with us

1.11 Total

m. WE DO NOT USE ANY KEY SUPPLIERS OF GOODS

12 Key suppliers include organisations who supply 10% or more of this organisation’s goods or those goods involving high risk in production and / or transport. Greenstreet Berman Ltd. 24 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



INDICATOR 2 Injury Rate – Employees /

Contractors




Introduction Although past injury rate performance is not necessarily a predictor of current and future performance, it is widely seen as an acceptable indicator of performance for larger companies. This Index recognises the importance of some measure of outcome, but also that it is only one indicator with other factors at play. This indicator is weighted to be a quarter as important as the management indicator.

In order to make rates comparable we will standardise them to frequency per 100,000 workers per annum. If your data is in terms of hours worked we will convert that using an average figure for number of hours worked per annum for a full time worker.

In order to ensure that equal importance is attached to both the health and safety of employees and of contractor workers we will weight the contribution of injury rates to the final index score in proportion to the ratio of employees to contractor employees.

Instructions Please provide information on employee and contractor13 numbers (or hours worked) for the last financial year, and the number of injuries for the same period for each group. Please ensure these figures are pertinent for the parts of your organisation being assessed (e.g. UK operations).

We recognise the difficulties there may be in collecting contractor data. If you do not have data on numbers of contractor employees or hours worked, please provide an estimate of the percentage of your total output for which contractor companies are responsible.

If you are unable to provide any information on your contractors, please consider the statements under section 2.3 and be aware that Indicator 3 will be determined based on the organisation’s employee injury rate alone.

13 “Contractors” includes any sub-contractor / non-employee workers engaged directly in the provision of services to this organisation. Greenstreet Berman Ltd. 26 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



2.1 Employee injury rate Please enter totals below

Total number of employees in the last year

OR

Total employee hours worked in the last year

Total number of injuries to employees sustained at work involving over 3 days off work (or away from normal work) and fatalities in the last year14

2.2 Contractor15 workers injury rate Please enter totals below

Total number of full-time equivalent contractors’ employees for the last year

OR

Total hours worked by contractors’ employees in the last year

OR (only if neither of the above are possible)

Please indicate the approximate percentage of your output contributed to by contractors in the last year

Total number of injuries to contracting workers sustained at work involving over 3 days off work or away from normal work and fatalities16

14 In the UK this equates to all RIDDOR reportable injuries (i.e. not including Dangerous Occurrances or“diseases”). It does not include commuting accidents. 15 “Contractors” includes any sub-contractor / non-employee workers engaged directly in the provision of services to this organisation. 16 Whilst undertaking work for this organisation.Greenstreet Berman Ltd. 27 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



If this organisation is unable to provide information on contractor injury rates, please consider the following statements and tick the one which best reflects your organisation’s use of contractors / service providers.

2.3 Statement on contractors17

Please tick as appropriate YES

a. Almost all of the organisation’s operations / production / provision of services and maintenance is carried out by contractors17

b. More than half (but not all) of this organisation’s operations / production / provision of services and maintenance is carried out by contractors17

c. Less than half (but more than 10%) of this organisation’s operations / production / provision of services and maintenance is carried out by contractors17

d. Less than 10% of this organisation’s operations / production / provision of services and maintenance is carried out by contractors17

e. This organisation uses contractors17 rarely, if ever, and only for short duration on unusual projects

17 “Contractors” includes any sub-contractor / non-employee workers engaged directly in the provision of services to this organisation. Greenstreet Berman Ltd. 28 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



INDICATOR 3 Employee Sickness Absence Rate




Introduction Our early discussions in particular explored the possibilities for an indicator of occupational health outcomes. A reliable indicator has long been recognised as very difficult to find because of the difficulties in identifying a disease, establishing that it is work-related, obtaining a diagnosis and then reporting it. There is a plethora of reporting schemes for various types of illness but many illnesses are not covered and there is little consistency.

Our exploration of this issue shows that there is a predictable agreement that direct measures of ill-health cannot be relied upon, but that it is important to include some indication of occupational health performance. Although it is recognised that sickness absence rates do not only reflect occupational ill-health, there appears to be a general acceptance that it does give an indication of employees’ general well-being, and does give some indication of the performance of an organisation in terms of the health of its employees.

Instructions Please give the total number of absences amongst all your employees. We will calculate the average using the figure you have already given on the total number your organisation employs. If you already have average figures, please enter them below as average number of days absence per year per employee.




3.0 Employee sickness absence rate Please enter the following

Total number of days sickness absence from work in the last year among all employees

OR (if you prefer)

Average number of days sickness absence per year, per employee







INDICATOR 4 Occupational Health




Introduction Occupational health management is widely recognised to be difficult, but essential to the health and well-being of workers. It is especially important given the great difficulties in detecting and measuring occupational ill-health, and often the perception of those at risk that it won’t happen to them.

For instance, it is important to proactively seek information on health rather than simply waiting for it to become apparent.

We have weighted this as a quarter as important as the main management indicator.

Instructions Please consider all the statements below and tick the relevant boxes. When you have completed these statements, please total your ticks in the various columns and enter the number in the bottom line of the table.



For each component please:

• Consider each statement

• Tick the box you consider most appropriate for your organisation

• Enter the total number of ticks in the boxes provided at the bottom of each column.

Note that the indicator works cumulatively so that it is possible to tick all statements as true – indeed, this would give the maximum score.




4.0 Occupational health


a. Targets are set for reducing the incidence of occupational ill-health

b. This organisation has access to an (internal or external) occupational health service18

c. This organisation encourages reporting of symptoms by workers

d. This organisation specifically asks workers whether they have any symptoms of ill-health at least once a year

e. This organisation’s risk assessment process includes consideration of the current health status and capabilities of individual workers

f. This organisation has a documented plan and programme for the reduction of risk from the causes of stress related illness, consistent with HSE guidance

g.

This organisation has a documented plan and programme for the reduction of the risk of injuries from repetitive work (e.g. typing, hand food processing etc.) and from lifting and handling, consistent with HSE guidance

h. This organisation monitors and reviews the implementation and effectiveness of the measures it takes to reduce the risk of stressrelated illness

i. This organisation monitors and reviews the implementation and effectiveness of the measures it takes to reduce the risk from repetitive injuries and from lifting and handling

j. This organisation provides a rehabilitation service which includes at least medical rehabilitation for any employee made ill or injured through their work

k.

If any employee is made ill or injured through their work, this organisation is actively involved with developing a back to work plan (or equivalent) in consultation with GPs / OH staff / HR staff / therapy / healthcare providers, which includes consideration of adjustments in the workplace

Continued…

18 Provides services such as health screening / assessment, workplace health promotion, return to work support, occupational health risk assessment and advice, etc. Greenstreet Berman Ltd. 35 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729




l.

This organisation provides a vocational rehabilitation service where an employee who cannot return to their previous work due to their work-related illness or injury to assist them to develop skills necessary to find new work

m. This organisation monitors and manages ill health absence

n. This organisation monitors work-related ill-health absence

4. Total

(Remember to include the previous page)




INDICATOR 5 Major Incident Rating




Introduction The table on the following page details categories of major events. The table on the page after that repeats the categories but leaves a column for you to fill in. This is another outcome indicator but is focussed on how you perform in terms of the types of incidents which have catastrophic potential, either in terms of their impact on the community or on the site or business itself, or at least incidents that indicate the potential for major incidents.

We can contrast these types of events with the slips and trips, and manual handling type incidents. Managing these well is essential to the health of workers but may not indicate effective management of the risk of catastrophic events, such as a fire destroying all or part of a site and putting many employees at risk of injury.

Instructions Please read through the description of the types of incidents defined – A to G – on the table overleaf. Please consider for each category how many incident/s has the organisation had in the last three (3) years. If no incidents in any of the categories listed have occurred, please indicate this with a zero in the appropriate boxes.

Please remember to include incidents for all parts of the organisation’s operations being assessed for the Index.




Descriptions of category of event

Category Description Nature of the events Examples

G Major (international) accident (catastrophe)

Major release or accident with widespread consequences, perhaps involving more than one country

>1000 fatalities or premature deaths

Chernobyl – tens of thousands premature deaths with international impact

F Serious (national) accident with hundreds or thousands of deaths

Accident likely to require full countermeasures by local emergency services

Over 100 (<1000) fatalities or premature deaths

Bhopal – thousands died, >170,000 injured

E Accident with offsite risk and/or many deaths

Severe damage to installation, major fire or explosion.

More than 5 but fewer than 100 deaths (or premature deaths from disease)

Lorry crash kills 10 people

Chemical plant destroyed by explosion with (say) a few dozen employees killed.

Train crash kills (say) 20 people

Legionella outbreak in a hospital resulting in deaths of > 5 patients.

D Accident without off-site risk / a few deaths or numerous nonfatal injuries/ illhealth

Significant damage to installation with some workers exposed or harmed

Over 10 persons exposed to non-fatal but seriously harmful substance

Incident with 1 to 5 deaths

Refinery explosion

Train derails at high speed with no serious injuries

Fire at waste plant gives rise to dense smoke cloud and exposure of residents.

Food poisoning of 50 residents in a (say) school or care home

C Serious incident Incident in which a further failure of a safety system could lead to a major accident, or where safety systems would be unable to prevent an accident.

Category A Signals passed at danger by trains without collision (train crosses another track)

Major flammable gas leak not ignited but isolation valves fails

Two aircraft breach minimum separation distances but alerted by collision alarms or ATC

Legionella detected before casualties occur

B Incident Incidents with significant failure in safety provisions but with sufficient defence remaining to cope with additional failures

Fire in store room of a shop that is contained by fire doors and people are safely evacuated

Chemical leak isolated by valve as per design

A Anomaly Anomaly beyond the authorised regime but with defence remaining.

Discovery of (say) sprinklers in shop inoperative but fire alarms and means of escape remain.

- Deviation Operational limits and conditions are not exceeded and which are properly managed in accordance with adequate procedures

Spurious activation of a safety system, e.g. a false fire alarm




Please complete this table

Category Descriptor Nature of the events Total no. in the last

3 years

G Major (international) accident (catastrophe)

Major release or accident with widespread consequences, perhaps involving more than one country

>1000 fatalities or premature deaths

F Serious (national) accident with hundreds or thousands of deaths

Accident likely to require full countermeasures by local emergency services

Over 100 (<1000) fatalities or premature deaths

E Accident with offsite risk and/or many deaths

Severe damage to installation, major fire or explosion.

More than 5 but fewer than 100 deaths (or premature deaths from disease)

D Accident without off-site risk / a few deaths or numerous non-fatal injuries/ ill-health

Significant damage to installation with some workers exposed or harmed

Over 10 persons exposed to non-fatal but seriously harmful substance

Incident with 1 to 5 deaths

C Serious incident Incident in which a further failure of a safety system could lead to an accident, or where safety systems would be unable to prevent an accident.

B Incident Incidents with significant failure in safety provisions but with sufficient defence remaining to cope with additional failures

A Anomaly Anomaly beyond the authorised regime but with defence remaining.

- Deviation Operational limits and conditions are not exceeded and which are properly managed in accordance with adequate procedures

Figures not

needed




Directors’ declaration Has your board made a written and signed declaration that matches or is consistent with the following statement?

Please tick as appropriate

YES

NO

“An assessment has been completed of the significant health and safety hazards posed by the organisation’s activities and an appropriate set of health and safety arrangements are in place to control these hazards. The implementation of these arrangements is monitored and reviewed on a regular basis with action taken to redress any deficiencies and ensure continuous improvement.”




Conduct of highly regulated activities

Does your organisation carry out any activities that are subjlisted below or their equivalent in other countries?

ect to special regulations, as

REGULATIONS Tick if none

Tick if ‘yes’ in the

UK

Tick if ‘yes’

outside the UK

COMAH (Seveso II directive)

Railway safety case regulations

Offshore safety case regulations

Asbestos licensing

Nuclear site licensing

CAA or FAA licensing

Mining

Transport of hazardous cargoes

Explosives

Other(s), please specify:




INDICATOR 6 ‘Under Watch’ Flag




Introduction An organisation is said to be ‘under watch’ when an event has occurred that either:

• Has the potential to indicate that there is a serious and systemic (widespread) failure of health and safety management

• Is of such a scale in its own right to have catastrophic consequences and / or recent enough and still has ramifications for the organisation.

This, in some cases, is in part defined via the reactions and perceptions of stakeholders to events that occur. So, this part of the Index does not affect the overall score, since such an incident may not stem from systemic failings, or may turn out to be a short term effect. Under watch is intended to flag up issues which should be monitored in order to come to an overall conclusion about current performance, risk and the organisation’s sustainability. For example, investors may wish to know if the solvency of an organisation is under threat due to accident related liabilities.

In order to receive a final score it is necessary for the organisation to sign the declaration in this part. In the case that an organisation is under watch it will have the opportunity to provide more information / clarification including information on what they are doing and planning to do in order to improve the situation.

It is anticipated that the operators of this index will monitor news about events as a check on self-reporting.

Instructions On the following pages you will find an explanation of the type of events that indicate that an organisation should be placed “under watch” for the time being. Please read this carefully.

Following this explanation you are asked to sign a declaration on behalf of your organisation that confirms that EITHER that the organisation:

• Has not suffered any of these events or

• Has suffered such an event.

If you have suffered an event that would fall into this category, please give a brief description of what that is in the space provided.

There is then an opportunity to provide further explanation of the incident and information on what you have done or intend to do to improve the situation. We would encourage you to fill this in, so that it gives the user the information they need to assess your current situation.




Description of “under watch” events The event is of sufficient scale or seriousness to either:

• Cause the brand name to be ‘shamed’ or damaged and / or

• Require a widespread / fundamental change in health and safety management and / or

• Cause the costs of remediation to be major / uneconomic – such as challenging company solvency or profitability and / or

• Cause the costs of compensation to be major/uneconomic - such as challenging company solvency or profitability and / or

• Lead customers, supplies and co-contractors (on a widespread basis) to wish to disassociate themselves from the organisation and / or

• Result in extensive regulatory action (e.g. loss of operating licence / prohibition of operations) and / or prosecution and / or

• Cause market dislocation.

In these cases the organisation would be placed under watch until either:

• It becomes apparent that the potential event or its potential consequences have not or will not materialise or

• The organisation has demonstrated that it has recovered from the incident or has a recovery plan that will assure restoration of confidence in the organisation’s safety performance or

• The consequences / actions arising from the event have ceased / been completed and the organisation now has effective health and safety management arrangements in place.

Organisations placed under watch may include ones that have not “failed”. In these cases an event has occurred that is judged to have the potential to constitute a major failure subject to developments and/or further information on the event.

In principle, events that have the potential to indicate that the organisation has a systemic or widespread serious failing are counted. A serious or even catastrophic event does not necessarily indicate a serious failing if fault is thought to fall elsewhere. Some examples of serious incidents that are not thought to reflect on the organisation include:

• Incidents caused by terrorist action

• The Selby train crash where a car driver came off a road, down an embankment and onto a railway – regarded to be an “act of god” that the organisation could neither foresee nor reasonably prevent

• Airplane crashes caused by pilot error – which do not reflect on the safetyperformance of the aircraft manufacturer




• Crashes caused by isolated engineering or operational faults / errors – such as the Concorde crash which did not have ramification for the safety and performance of the vast majority of British Airways fleet.

The exceptions to the latter include:

• Where the direct costs and consequences of an accident are of such a scale that they have serious ramification, such as a desire to prohibit a certain type of activity / operation or

• Where the remediation costs are prohibitive. Some activities may be deemed to be inherently unsafe and hence unacceptable regardless of the competence of the organisation or

• Where the incident, though isolated, causes a loss of market position – such as where a product is temporarily withdrawn or a service is temporarily halted / rejected – but where another supplier has stepped in or where customers have found alternatives by the time service is restored.

Further explanation of events that should be declared is given below.

Confidence losing reports / audits / enforcement action

A highly critical audit report that demonstrates that trust cannot be placed in the organisation to manage safety to the standards expected by key stakeholders. The findings of the reports will lead, at a minimum, to the company having to make major changes to the management and organisation. They may also cause, at a minimum, a loss of confidence in the organisation amongst key stakeholder such as customers and regulators. Examples of such events include the Nuclear Installations Inspectorate’s audit reports on BNFL, British Energy and UKAEA.

Confidence losing incidents

Actual incidents, non-catastrophic and catastrophic, can also demonstrate that trust cannot be placed in the organisation to manage safety to the standards expected by key stakeholders. These incidents may reveal either a common fault in safety management or a common / widespread engineering defect that has the potential to cause serious (fatal or disabling) harm. Examples of such events include:

• Railtrack: The Hatfield train crash exposed doubts over the trust that could be placed in the management of maintenance and led to major re-engineering costs

• Valuejet: An air crash revealed that the airline lacked a competent maintenance function and ceased trading




On a lesser scale, the deaths of one or two employees can reveal a common failure of management which in combination with enforcement action indicates that there is a common and widespread systemic failure of health and safety management. An example of such events involved the deaths of two fire fighters in 1992 led to a realisation that the UK fire service approach to health and safety management systematically failed to meet modern-day standards and expectations of regulators, staff or elected representatives. This led to major changes in operational management and investment in new forms of health and safety management.

In some cases, a serious incident on a site can have serious local implications for a site. Such incidents may be deemed to reveal serious problems with the safety of the specific site without indicating corporate or organisation wide problems. The incident may cause doubts to arise about the future of the site. These doubts may arise from the cost of site improvements, disruption of site operations by reforms and modifications, local opposition to the site or the corporation’s wish to disassociate itself from a “dangerous” facility.

On the other hand, events in one organisation can have a ripple effect on other similar organisations if it is deemed that the “faults” are common across the sector. This may create a loss of confidence in the entire sector, revealing as it does a common fault, that may lead to demands for significant industry wide changes.

Catastrophic / major incidents / occurrences

Catastrophic events can cause major consequences where the organisation is considered to be at fault, even if the problem is not widespread or systemic across the organisation. The event is of sufficient scale to directly cause loss of reputation, costs and disruption. Examples of such events include:

• The Piper Alpha disaster (Occidental ceased operations in the North Sea)

• The Bhopal disaster (Union Carbide).

These events can include “health” incidents where a large proportion of a workforce / public are deemed to have suffered serious ill-health.

Health and safety liabilities An organisation may discover it has previously un-revealed major liabilities for work related injury and illness. Examples include:

• The emergence of “long tail” compensation liabilities for chronic / latent diseases amongst current or past employees

• Discovery of contamination of public water supplies.

PLEASE COMPLETE THE DECLARATION AND DESCRIPTION, AND GIVE ANY SUPPLEMENTARY INFORMATION YOU WISH IN THE SPACE PROVIDED.




Declaration on under watch events

I have read the above description of what events would put this organisation

‘under watch’ for health and safety risk management and declare that this

organisation HAS / HAS NOT* suffered an event of this type which is currently

affecting its performance or the perception of its performance.

[*Please delete as appropriate]

Signed

Position

Date

If this organisation HAS suffered such an event please complete a description

below, and if you wish provide a statement of intended action to improve the

situation (overleaf).

Description of event Please provide a brief description of the event or events your organisation has suffered.

If you wish please complete a statement of your actions in response to this incident/s on next page.




Statement of intended actions Please provide a statement of intended actions to improve the current situation with respect to the event that puts your organisation ‘under watch’.







Supplementary Guidance on Management Systems




Introduction This section is to provide guidance for an organisation that does not have a recognised management system in place, or if there is any uncertainty regarding this.

In outline the following is based on “Successful health and safety management” (HS(G) 6519), guidance produced by the Health and Safety Executive. Aspects already covered in the main management indicator are not repeated here.

Instructions Please use the following statements as a guide to your answer to management subindicator 1.10.

Each component is made up of a series of statements describing a factor which influences health and safety performance. There are three responses possible to each statement, i.e. “Yes”, “Some” or “No”.



Step 1: Completing the supplementary guidance questions If you were unsure whether your organisation has a management system in place, you will have answered the final section of the Index “Supplementary Guidance on Management Systems”. For each component please:

1. Consider each statement

2. Tick the box you consider most appropriate for your organisation

3. Enter the total number of ticks in the boxes provided at the bottom of each column.

Note that the indicator works cumulatively so it is possible to tick all statements as true – indeed this would give the maximum score.

19 Successful health and safety management HS(G)65 Second Edition 1997, ISBN 0-7176-1276-7 Greenstreet Berman Ltd. 52 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



Step 2: Determining an outcome for sub-indicator 1.10 1. Please fill in the results for each sub-section in the relevant columns; and following

the method of calculation indicated in Column 4 and 5 headings, complete the final two columns.

2. Please complete this table now by adding up all the results from Column 5, to give you a score out of 5. Finally, divide by 5 (so that the result is out of 1).

3. To determine which box is appropriate to tick in sub-indicator 1.10, compare your final result with Table 2 below.

Table 1 Supplementary Management System Calculation

Total Total Total Column 1 + Divide number number possible ½ Column 2 Column 4 by of ticks of ticks no. ticks Column 3 “YES” “SOME”

Column 1 Column 2 Column 3 Column 4 Column 5

Example: Organising

15 6 29 15 + ½ (6) = 18 18/29 = 0.62

7.1 Policy 12

7.2 Organising 29

7.3 Planning and Implementing 20

7.4 Measuring Performance 29

7.5 Review 10

Total of column 5 add all entries

Management system score – divide total by 5


What final result did you get from the Supplementary Guidance?

< 6.7 6.7 to ≤ 8.5 + 8.5

This means you should enter a tick in the following box for sub-indicator 1.10 NO SOME YES




7.1 Policy


a. The organisation’s health and safety policy commits the employer to continuous improvements in health and safety performance

b. The board actively debates and agrees the health and safety policy

c. The health and safety policy clearly links health and safety management with other business management areas such as finance, personnel, environment, quality and / or CSR

d. This organisation publicises the health and safety policy to all interested parties such as suppliers, investors etc.

e. This organisation regularly consults with employees regarding policy

f. This organisation regularly consults with stakeholders (other than employees) regarding policy

g. This organisation reviews policy following any incident with the potential for serious consequences

h. This organisation regularly reviews the impact of new legislation on health and safety policy

i. This organisation regularly benchmarks its policy against other organisations’ policies

j. This organisation reviews health and safety policy in the event that it takes on new activities (including the acquisition of other companies)

k. This organisation reviews policy in the light of advances in the understanding and recognition of health and safety hazards, actively seeking information on which to base such reviews

l. This organisation ensures, and can demonstrate that every employee and contractor is aware of the policy and understands its relevance to them

7.1 Policy Totals




7.2 Organising20 1. Control


a. Senior site managers are formally and in writing given clear health and safety responsibilities

b. Senior site managers receive training in their health and safety responsibilities

c. A senior manager has responsibility for the design and architecture of the health and safety management system

d. Guidelines have been written to assist managers in implementing the health and safety policy

e. All line managers are formally and in writing given clear health and safety responsibilities appropriate to their responsibilities

f. Managers are held accountable for discharging their health and safety responsibilities

g. Health and safety performance is included in individual performance review and appraisal systems

h. Procedures are laid down (formally and in writing) identifying and acting upon failures by any employee (including managers) to achieve adequate health and safety performance

i. Supervision is a key element of control and levels of supervision (by both supervisors, team leaders etc.) are determined by the risk of jobs and the competence of the person / people carrying out the job

j. Those with health and safety supervisory roles are competent in coaching and communicating health and safety issues to individuals

k. Those with supervisory roles have responsibilities to monitor health and safety performance both by formal (e.g. assessment) and informal (spot checks) means

l. Those with supervisory roles have formal and written responsibilities to ensure the development and maintenance of health and safety competence, in particular for those new to a job or undergoing training

7.2.1 Control Sub-Totals

20 Note that ‘co-operation’ is not covered as its core – extent of involvement of the workforce - is included as one of the main 10 management elements. Greenstreet Berman Ltd. 55 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



7.2 Organising (continued) 2. Communication


a. All workers have ready access to the health and safety information they need for their jobs

b. Health and safety legal developments are actively monitored

c. Technical developments in relevant areas of risk control are actively monitored to ensure the organisation is aware of current best practice

d. Developments in health and safety management practice are actively monitored to ensure the organisation is aware of current best practice

e. The organisation has a formal and agreed plan for the effective communication of the health and safety policy

f. The organisation has a formal and agreed plan to communicate the commitment of senior management to the implementation of the health and safety policy

g. The organisation has formal and agreed plans to communicate plans, standards, procedures and systems relating to the implementation and measurement of performance

h. The organisation has systems to enable it to learn from its experience by effectively communicating the lessons learned from near miss incidents and accidents

i. A range of communication techniques – visible behaviour, written communications and face-to-face discussions – are used to convey health and safety information, to ensure that all workers are effectively informed

j. All managers are aware of the importance of their personal behaviour in supporting positive health and safety performance, and act accordingly

7.2.2 Communication Sub-Totals




7.2 Organising (continued) 3. Competence


a. Competency standards are set for all health and safety related activities

b. Systems are in place to identify health and safety training needs when personnel are recruited, change job or the organisation / aspects of work activities change

c. Recruitment and placement procedures ensure that employees, in particular managers, have the necessary physical and mental abilities to do their jobs or can acquire them through training and experience

d. Contractors are actively encouraged to attend health and safety training activities and often do

e. The training provided for employees covers at least these three areas:

• Organisational needs (e.g. the structures and systems for delivering the health and safety policy)

• Job needs – management needs (e.g. leadership, communication skills, coaching skills) and non-management needs (e.g. detailed knowledge of the health and safety arrangements relevant to an individual’s job)

• Individual needs (e.g. identified during appraisals, arising because they have not absorbed formal job training)

f. The need for refresher training for many competences is recognised and systems are in place to identify such needs and provide the appropriate training

g. Arrangements are in place to provide competent cover for staff absences, in particular for all those with critical health and safety responsibilities

7.2.3 Competence Sub-Totals

7.2 Organising - Totals YES SOME NO

7.2.1 Control Sub-Totals

7.2.2 Communication Sub-Totals

7.2.3 Competence Sub-Totals

7.2 Organising Totals




7.3 Planning & Implementing


a. This organisation’s health and safety risk control systems covers:

Acquisition of new businesses

Design, selection, purchase and construction of new workplaces

Design, selection, purchase and installation of plant, materials and substances used by the organisation

Plant, materials and substances used by others such as contractors in our operations on and off site/s

Selection of contracting organisations

Foreseeable emergencies

Disposal of plant, equipment and substances (including wastes)

b. The organisation has identified suitable benchmarks against which to assess the performance of its risk control systems

c. Performance standards which

• allocate specific responsibility

• explain what is to be done

• how and when it is to be done

• detail the expected result

And have been explicitly set and recorded for:

Policy formulation and development

Internal methods of accountability

Health and safety committee and other consultation meetings

Collection and dissemination of health and safety information from external sources

The involvement of senior managers in safety tours and accident and incident investigations

Health and safety plans and objectives

The risk assessment process for inputs (e.g. raw materials, contractors, etc), work activities, products, services and disposal




7.3 Planning & Implementing


Implementation of risk control systems and workplace precautions

The active monitoring arrangement including inspections

Accident and incident reporting system

Accident and incident investigation system

Audit and review

7.3 Planning and Implementing Totals





7.4 Measuring Performance


a. All sites are required to set health and safety targets

b. All sites are required to monitor their performance against targets

c. This organisation’s active monitoring systems includes:

Routine procedures to monitor specific objectives e.g. quarterly / monthly reporting / returns

Periodic review of documentation relating to the way in which health and safety objectives have been established for individuals

Periodic review of documentation relating to assessment and recording of training needs

Periodic review of documentation relating to the delivery of suitable training

Periodic review of documentation relating to health and safety performance assessment

Systematic inspection of plant and equipment by managers / supervisors to ensure the continued effective operation of workplace precautions

Inspection of plant and equipment by safety / employee representatives

A requirement for recommendations for action necessary to prevent recurrence of any deficiency found AND puts action required into a recorded and tracked action system allocating responsibilities and deadlines

Identifying and reporting hazards

Identifying and reporting weaknesses / omissions in performance standards

d. This organisation’s reactive monitoring systems includes:

Identifying and reporting injuries and cases of ill-health

Identifying and reporting non-injury incidents with the potential to cause injury, ill-health or loss

Cross referencing and checking first-aid treatments, health records, maintenance or fire reports and insurance claims to identify any otherwise unreported events

Training which promotes all reporting by clarifying the underlying objectives and reasons for identifying the above incidents, hazards, etc.




7.4 Measuring Performance (continued)


Analysis of incident investigation results to identify common causes and trends which may not be apparent from the investigation of an individual event

e. This organisation’s incident investigation system:

Requires an assessment of potential worst consequences

Ensures that greatest effort is on those incidents which have caused serious injury or ill-health AND those that had the potential to cause widespread or serious injury or ill-health

Examines both immediate and underlying failures in health and safety management systems leading to the incidents / hazards, etc.

Requires recommendations for action necessary to prevent recurrence of the incident / hazard etc AND puts action required into a recorded and tracked action system allocating responsibilities and deadlines

Ensures that the organisation as a whole learns from the event by making key people aware of the incident / failings identified and ensure they take any relevant action to prevent similar failings leading to incidents

Requires that all investigations are lead by someone with the status and knowledge to make authoritative recommendations including those on management failings, and as a minimum is a line manager

Requires senior management involvement for those events with serious or potentially serious consequences

Requires the recording of the results of the investigation in a form which enables analysis of causes and trends

Requires investigations to be initiated promptly and completed within defined time limits

Requires those leading accident investigations to be trained and competent in accident techniques and in understanding the importance of both immediate and underlying causation

Provides written guidance / tools for investigators to assists in carrying out accident investigations to an adequate standard e.g. investigation form, check lists, etc.

7.4 Measuring Performance Totals





7.5 Auditing and Reviewing Performance


a. This organisation has arrangements in place to establish that:

• appropriate management systems are in place

• adequate risk control systems exist, are implemented, and consistent with the hazards of our organisation

• appropriate workplace precautions are in place

b. Over time, this organisation’s auditing and review system verifies the adequacy of all aspects of health and safety management – policy, organising, planning and implementing, measuring performance and review; and this also includes management arrangements linking the centre with different business units and / or sites

c. This organisation’s auditing and review systems verify critical risk control systems (RCSs) more frequently than other RCSs

d. This organisation tailors its audit and review programme to its particular needs and hazard profile

e. This organisation uses a team approach involving managers, employees AND safety / employee representatives in implementing the audit and review programme

f. This organisation uses a team approach involving managers, employees AND safety / employee representatives in devising and reviewing the audit and review programme

g. Auditors use a range of sources of information including interviewing individuals, examining documents AND visual observation

h. This organisation judges the adequacy of our health and safety management systems using reliable benchmarks such as legal standards, HSE guidance (e.g. HSG65) and industry standards

i. This organisation’s auditing and review system identifies positive achievements as well as areas for improvement

j. This organisation has laid down specific standards of training and assessment for the competence of those carrying out audits and review

7.5 Audit and Review Totals




NOTES





Calculating the Health & Safety Performance Index – Final


Appendix I

CALCULATING THE HEALTH AND SAFETY PERFORMANCE INDEX







Preliminary Information Step 1: Employee and contractor numbers The “equivalent full time” number of contractors and employees needs to be estimated.

1. If you can simply state the total number of full time employees the number can be directly entered into Table 4 overleaf. If you also have no key contractors / suppliers of services (as defined in the index) or already know the full time equivalent number, please also enter “0” or the number of full time equivalent contractors (respectively) into Table 4.

2. If by carrying out the steps in paragraph 1 you have completed Table 4 please complete the total workers calculation (E+C) and move straight on to Step 2 overleaf.

3. However if you only have estimates of contractor hours worked, or if you have part time posts you need to calculate the number of “equivalent full time” people and enter them into Table 3.

Employees – full-time equivalent calculation If you have records of total employee hours worked please calculate the number of fulltime equivalents by dividing this figure by 1950 and enter into Row 1 of Table 3.

If you have records of the number of part and full time employees, but no records of hours worked, you can simply treat each part time post as half a person, thus;

No. of part- time employees = equivalent full time employees

Divided by 2

Enter the result in the table below (Row 2)

Contractors / providers of services - full-time equivalent calculation For contractors, if you have recorded (say) 3.9 million hours of contractor time, this can be divided by 1950 hours (a standard working year) to give 2,000 equivalent full time contractor “posts”. Please enter this calculation and result in Row 3 in Table 3 below.

Table 3 Total hours worked

1 Employee hours worked = …………………….. Divide by 1950 E =.…. …………….equivalent full time posts

2

OR

No. of full time employees

PLUS +

No. part-time Emp’ees 2 E =………………... equivalent full-time posts

3 Contractor21 hours worked = ………………… Divide by 1950 C =.……….………..equivalent full time posts

21 All references to “contractors” include suppliers of services (as opposed to goods). Greenstreet Berman Ltd. 67 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



4. Once you have estimated the number of “equivalent” full time employees and contractors please:

1. Enter employee numbers (E) and contractor numbers (C) in Table 4.

2. Add E and C (E+C) to give a total number of workers.

3. Enter total numbers (E+C) into the final row in Table 4.

Table 4 Total number of full time equivalent workers

Employee numbers (E) …………. E =

Contractor numbers (C) C =

Total Numbers Workers E+C =

Step 2: Calculate the employee weighting factor EW Using the data from Table 4 above please complete : Table 5.

1. Divide E by (E+C) and

2. Enter the result into column 3 in Table 5 below.

Table 5 Employee weighting factor

Column 1 Column 2 Column 3

Employee EW = E/(E+C) =weighting (EW)

For example, if you have 10,000 Employees and 2,000 Contractors the calculation is:

10,000 employees = 10,000 = 0.83 10,000 Employees + 2,000 Contractors 12,000




Step 3: Calculate the contractor weighting factor CW This is very similar to the employee weighting factor.

Using the data from Table 4 above:

1. Divide C by E+C and

2. Enter the result into column 3 in Table 6 below.

Table 6 Contractor weighting factor

So weighting (CW)

Column 1 Column 2 Column 3

Contractor CW = C/(E+C) =

For example, if you have 10,000 Employees and 2,000 Contractors the calculation is:

2,000 Contractors = 2,000 = 0.17 10,000 Employees + 2,000 Contractors 12,000







INDICATOR 1 CALCULATION Health and Safety Management




Introduction In order to calculate the Management Indicator you need to calculate the score for each of the 11 elements. For all elements other than 1.10 this is a simple matter, wherein you divide the number of “ticks” per element by the total number of questions per element. For element 1.10 a special calculation method is needed, as described in Step 2 below.

Overleaf (under “Step 3”) you will find a table with all the elements of the management indicator laid out. Column 1 is for you to enter your total number of ticks for each of the elements. Column 2 shows the maximum possible number of ticks for the element.

Step 1: Elements 1.1 to 1.9, and 1.11 1. Enter your total ticks for each element into Column 1 for “Yes” ticks and Column

2 for “some” ticks in Table 7 as indicated. (Leave element 1.10 until the next step.)

2. Then, for each element in Table 7 add the total in column 1 to half the total for column 2 entry and enter the result into Column 4.

3. Then for each element, divide the entry in Column 4 by the maximum given in Column 3. (Note that the maximum figure you will get is 1 for each element.)

4. Enter this result to two decimal places into Column 5. 5. Before making the final calculation you now need to calculate the entry for

Column 5 for element 1.10. Please go to Step 2 below.




Table 7 Overall Management Indicator Calculation

Total number of ticks “YES”

Total number of ticks

“SOME”

Total possible no. ticks

Column 1 + ½ Column 2

Divide Column 4 by

Column 3


Example: Targets 4 4 9 4 + ½ (4) = 6 6/9 = 0.66

1.1 Targets 9

1.2 Board representation 7

1.3 Reporting to the board 8

1.4 Reporting externally 6

1.5 Performance standards and 9 requirements

1.6 Health and safety plans 7

1.7 Workforce involvement 11

1.8 Performance verification 6

1.9 Monitoring and review 8

1.10 Management system

STEP 2 – Enter result from Table 922

1.11 Supplier performance 11/6/5*

Total of column 5 (please add all entries)

STEP 3 – Management indicator score – divide total by 1.1

* Please select appropriate total i.e. 11 if you have both key suppliers of services (contractors) AND of goods, 6 if you only have key suppliers of services, and 5 if you only have key suppliers of goods.

22 If you have recognised management systems and insist on them for your key suppliers and contractors enter 1. Otherwise, please calculate your overall score using the method given in the following section. Greenstreet Berman Ltd. 73 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



Step 2: Element 1.10 Management Systems Entering a number for element 1.10 of Table 7 requires a different type of calculation.

4. If you have a formally recognised management system (or generally recognised system such as HSE’s HS(G)65) for your organisation simply enter 1 into Table 7 column 5, and move on to Step 3).

5. If you are well on the way to having recognised management systems across the organisation, you will have answered “some” to 1.10 - please enter 0.5 into column 5 of Table 7 and continue straight to Step 3.

6. If you were unsure you may have chosen to answer the final section of the Index “Supplementary Guidance on Management Systems”. Please fill in your results for this; it follows the same method of calculation as for the main table above. Your final score will however be 0, 0.5 or 1 (corresponding to No, Some, or Yes).

7. Please complete this table now, adding up all the results from Column 5, giving a score out of 5, and finally dividing by 5 (so that the result is out of 1).

8. Please then see Table 9 to determine whether you score 0, 0.5 or 1 and enter this final result into Table 7 above against 1.10 into column 5. Then proceed to Step 3 to calculate your overall management indicator score from the information you have entered.


Total Total Total Column 1 + Divide number number possible ½ Column 2 Column 4 by of ticks of ticks no. ticks Column 3 “YES” “SOME”


Example: Organising

15 6 29 15 + ½ (6) = 18 18/29 = 0.62

7.1 Policy 12

7.2 Organising 29

7.3 Planning and Implementing 20

7.4 Measuring Performance 29

7.5 Review 10

Total of column 5 add all entries

Management system score – divide total by 5




Table 9 Management Indicator score

What final result did you get from the Supplementary Guidance? < 6.7 6.7 to 8.5 > 8.5

This gives scores as follows: NO = 0 SOME = 0.5 YES = 1

Step 3: Calculate overall Management Indicator The overall Management Indicator is given by summing the entries in Column 5 of Table 7 and then dividing by 1.1 to give a score out of 10 (instead of 11). So the score should be in the range of 0 to 10, where 0 is worst and 10 is best possible result.







INDICATOR 2 CALCULATION Injury Rate – Employees /

Contractors




Introduction The injury rate indicator is calculated in several steps. First the injury rates per 100,000 workers are calculated for both employees and contractors (suppliers of services). These are then weighted using the weighting factors calculated in the preliminary calculations. A ratio of this rate and the industry average is calculated and a look up table provided to give your final indicator (out of 10) score. A weighted injury rate the same as the UK average (ratio=1) would for instance give you a score of 5.

Step 1: Calculate employee and contractor injury rates The employee injury rate is calculated as a rate per 100,000 employees. The calculation for employees is:

Number of injuries X 100,000

Number of employees

Table 10 Employee injury rate calculation

Column 1 Column 2 Column 3 Column 4 No injuries to

Employees Employee numbers Rate per employee

(Col 1 divided by Col 2)

Rate per100,000 employees

(100,000 x column 3) For example: 25 10,000 0.0025 250

The same calculation is completed for contractors, as shown below:

Table 11 Contractor injury rate calculation

Column 1 Column 2 Column 3 Column 4 No injuries to

contractors Contractor numbers Rate per contractor

(Col 1 divided by

Rate per100,000 contractors

Col 2) (100,000 x column 3) For example: 8 2,000 0.004 400




Note that if you do not have the data for contractors the overall index is calculated using only employee data, but you are required to select a statement from 5 given in the index best reflecting the importance of contractors to you.

If this is the case for you, please move straight to Step 3 of this section.

Step 2: Calculate injury rate weighted for employees/contractors The Employee and Contractor injury rates are weighted to give an overall Weighted Injury rate. This is calculated by:

• Multiply Weight for Employees from Table 5 (EW) by employee injury rate.

• Multiply Weight for Contractors from Table 6 (CW) by Contractors injury rate.

• Add the two weighted injury rates together.

The calculation (and an example) is shown below:

Table 12 Weighted injury rate calculation

Column 1

Injury rates (Table 10, Table 11)

Column 2

Weights (Table 5, Table 6)

Column 3

Weighted injury rates

Employee injury rate = EW =

Contractor injury rate = CW =

Overall weighted rate (sum of column 3)

Table 13 Example of weighted injury rate calculation

Column 1

Injury rates (from Table 10 & Table 11)

Column 2

Weights (from Table 5 & Table 6)

Column 3

Weighted injury rates

Employee injury rate = 250 EW = 0.83 250 x 0.83 = 207.5

Contractor injury rate = 400 CW = 0.17 400 x 0.17 = 68

Overall weighted rate (sum of column 3) 207.5 + 68 = 275.5




Step 3: Look up Injury rate index The injury rate indicator is derived by comparing your weighted injury rate (or your employee injury rate if contractor details are not available) with the UK average. This is achieved by:

• Dividing your weighted injury rate by the UK average - 63023.

• Looking up the weighted injury rate on the following table (Table 14) – which gives you your Injury rate indicator.

Thus for example, with a weighted injury rate of 275.5 and a UK average of 630 the multiple is 0.44.

Example calculation: 275.5/ 630 = 0.44

This gives an indexed Injury Rate Indicator of 6.8

An organisation with an injury rate of (say) 1,000 would have a multiple of

1,000/630 = 1.6, and hence an indicator of 4.

23 The over 3 day injury rate reported by the HSE for 2001-2002 is 630 per 100,000 employees. Greenstreet Berman Ltd. 80 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



Table 14 Injury indicator look up table

Industry average multiple

Injury rate indicator



0.1 10.0 0.38 7.1

0.11 9.8 0.39 7.0

0.12 9.6 0.4 7.0

0.13 9.4 0.42 6.9

0.14 9.3 0.44 6.8

0.15 9.1 0.46 6.7

0.16 9.0 0.48 6.6

0.17 8.8 0.5 6.5

0.18 8.7 0.52 6.4

0.19 8.6 0.54 6.3

0.2 8.5 0.56 6.3

0.21 8.4 0.58 6.2

0.22 8.3 0.6 6.1

0.23 8.2 0.62 6.0

0.24 8.1 0.64 6.0

0.25 8.0 0.66 5.9

0.26 7.9 0.68 5.8

0.27 7.8 0.7 5.8

0.28 7.8 0.75 5.6

0.29 7.7 0.8 5.5

0.3 7.6 0.85 5.4

0.31 7.5 0.9 5.2

0.32 7.5 0.95 5.1

0.33 7.4 1 5.0

0.34 7.3 1.05 4.9

0.35 7.3 1.1 4.8

0.36 7.2 1.15 4.7

0.37 7.2 1.2 4.6

Continued overleaf Greenstreet Berman Ltd. 81 October 2003 Fulcrum House 5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729







1.25 4.5 3.8 2.1

1.3 4.4 3.9 2.0

1.35 4.3 4 2.0

1.4 4.3 4.2 1.9

1.45 4.2 4.4 1.8

1.5 4.1 4.6 1.7

1.6 4.0 4.8 1.6

1.7 3.8 5 1.5

1.8 3.7 5.2 1.4

1.9 3.6 5.4 1.3

2 3.5 5.6 1.3

2.1 3.4 5.8 1.2

2.2 3.3 6 1.1

2.3 3.2 6.2 1.0

2.4 3.1 6.4 1.0

2.5 3.0 6.6 0.9

2.6 2.9 6.8 0.8

2.7 2.8 7 0.8

2.8 2.8 7.2 0.7

2.9 2.7 7.4 0.7

3 2.6 7.6 0.6

3.1 2.5 7.8 0.5

3.2 2.5 8 0.5

3.3 2.4 8.5 0.4

3.4 2.3 9 0.2

3.5 2.3 9.5 0.1

3.6 2.2 10 0.0

3.7 2.2




INDICATOR 3 Employee Sickness Absence Rate

(Absence Scale)




Introduction The absence score is calculated by identifying the index rating in Table 15 that corresponds to the average number of days absence due to sickness per employee in your organisation – using the table overleaf. Thus, for example, an organisation with 5 days lost due to sickness per year per employee is assigned an index of 7.5.

Some examples are given below:

• An importing agent with 0.25 days lost to sickness is assigned a score of 10.

• A legal firm with 3 days lost per employee is assigned a score of 9.2.

• A water utility with 5 days lost per employee is assigned a score of 7.6.

• A school with 10 days lost per teacher is assigned a score of 3.8.

• A prison service with 16.7 days lost per officer is assigned a score of 0.

• A food manufacturer with 22 days per employee is assigned a score of 0.




Table 15 Sickness absence rate indicator - look up table In

dica

tor V

alue

10

9

8

7

6

5

4

3

2

1

0

<2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 11.5 12 12.5 13 13.5 14 14.5 >15

Days sickness absence per employee per annum

Greenstreet Berman Ltd. 85 October 2003 Fulcrum House, 5 Southern Court, South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729

Calculating the Health & Safety Performance Index - Final


INDICATOR 4 CALCULATION Occupational Health Indicator

Greenstreet Berman Ltd. 86 October 2003 Fulcrum House5 Southern Court South Street, Reading, RG1 4QS Tel 0118 938 7700 Fax 0118 938 7729



Introduction There is only one element of this indicator, so the calculation is relatively straight forward, and an example is given below. The key difference here is the need to multiply by 10 to align with the other indicators.

The first Table gives an example. The second is for the calculation.

Table 16 Example of occupational health indicator calculation



“SOME”



Divide Column 4 by

Column 3


Example Occupational Health

7 4 18 7 + ½ (4) = 9 9/18 = 0.5

Occupational health indicator score – multiply total by 10

0.5 x 10 = 5

Table 17 Occupational health indicator calculation



“SOME”



Divide Column 4 by

Column 3


Occupational Health 18

Occupational health indicator score – multiply total by 10




INDICATOR 5 CALCULATION Major Incident Rating




Introduction The major incident index is calculated in two steps. First a weighted score is derived based on the number of incidents per year. These incidents are assigned a weight to reflect their severity and then divided by the number of employees. This gives a per employee rate that can be multiplied by 100,000 to give an easier to read rate. Then, in step 2, the rate is placed on a scale to derive the index.

Step 1: Calculate weighted incident frequency A weighted score is given by the sum of (Wa x Fa) + (Wb x Fb) etc divided by the number of employees, where:

• Wa = Weight assigned to incident. • F = Number of incidents per year for a given category of incident across the

organisation.

The frequency is calculated as a rolling 3 to 5 year average. Thus, 3 category D incidents in 3 years would give a frequency of 1.

The product of the latter multiplication is divided by the number of employees and then multiplied by 100,000.

Thus, an organisation with (say) 50,000 employees and 1 category D incident per year would have a score of:

(1/50,000) X 100,000 = 2

Some worked examples of how to calculate the weighted incident frequency are given below drawing on hypothetical data. A blank table is given below.

Table 18 Major incident indicator calculation

Category Events per annum Weight

Weighted rate per annum Column b x column c)

Employees - E

Rate per 100,000 employees (Sum of column d divided by column e x100,000)

MI index

a b c d e f

G 1000

F 100 E 10 D 1 C 0.1 B 0.01 A 0.001

Total of column d




Examples Category Events per annum

Weight Weighted rate per annum (b*c)

Employees Rate per 100,000 employees (Sum of d

MI index

divide by e*100,000)

a b c d e f Nuclear operator

B 1 0.01 0.01

23,000 0.25 6 A 47 0.001 0.047

Subtotal

0.057

Nuclear operator

B 1 0.01

5600 0.21 6

A 2 0.001

Subtotal

0.012

Rail organisation

D 0.2 1 0.2

15,000 7.5 3

C 5 0.1 0.5 B 30 0.01 0.3 A 120 0.001 0.12

Subtotal

1.12

Petrochemical firms

D 1 1 1

115,000 1.6 4

C 5 0.1 0.5 B 30 0.01 0.3 A 100 0.001 0.1

Subtotal

1.9

Retailer B 0.2 0.01 0.002

260,000 0.0026 10 A 5 0.001 0.005

Subtotal

0.007




Step 2: Derive index score The weighted incident frequency score is placed on a scale as shown in the table below to derive the Major Incident (MI) index rating. For example a weighted incident frequency of 2 gives a MI index rating of 4.

Table 19 Major incident Indicator Look-up table (continues on next page)

MI score Indicator MI score Indicator

< 0.01 10.0 0.09 7.6 0.012 9.8 0.095 7.6 0.014 9.7 0.1 7.5 0.016 9.5 0.12 7.3 0.018 9.4 0.14 7.1 0.02 9.3 0.16 7.0 0.022 9.2 0.18 6.9 0.024 9.1 0.2 6.8 0.026 9.0 0.22 6.7 0.028 8.9 0.24 6.6 0.03 8.8 0.26 6.5 0.032 8.8 0.28 6.4 0.034 8.7 0.3 6.3 0.036 8.6 0.35 6.1 0.038 8.6 0.4 6.0 0.04 8.5 0.45 5.9 0.045 8.4 0.5 5.8 0.05 8.3 0.55 5.7 0.055 8.2 0.6 5.6 0.06 8.1 0.65 5.5 0.065 8.0 0.7 5.4 0.07 7.9 0.75 5.3 0.075 7.8 0.8 5.2 0.08 7.8 0.9 5.1 0.085 7.7 1 5.0




MI score Indicator MI score Indicator

1.1 4.9 10 2.5 1.2 4.8 11 2.4 1.3 4.7 12 2.3 1.4 4.6 13 2.2 1.5 4.6 14 2.1 1.6 4.5 15 2.0 1.7 4.4 16 2.0 1.8 4.4 17 1.9 1.9 4.3 18 1.8 2 4.2 19 1.8

2.2 4.1 20 1.7 2.4 4.0 22 1.6 2.6 4.0 24 1.5 2.8 3.9 26 1.4 3 3.8 28 1.4

3.2 3.7 30 1.3 3.4 3.7 32 1.2 3.6 3.6 34 1.2 3.8 3.5 36 1.1 4 3.5 38 1.0

4.2 3.4 40 1.0 4.4 3.4 45 0.9 4.6 3.3 50 0.7 4.8 3.3 55 0.6 5 3.2 60 0.5

5.5 3.1 65 0.4 6 3.0 70 0.4

6.5 3.0 75 0.3 7 2.9 80 0.2

7.5 2.8 85 0.2 8 2.7 90 0.1

8.5 2.7 95 0.0 9 2.6 > 100 0.0

9.5 2.5




Greenstreet Berman Ltd. 93 October 2003 Fulcrum House5 Southern CourtSouth Street, Reading, RG1 4QSTel 0118 938 7700 Fax 0118 938 7729



OVERALL HEALTH AND SAFETYINDICATOR CALCULATION




Introduction The overall index is calculated by:

• Multiplying the result for each indicator by its respective weighting, and;

• Summing weighted indicator ratings.

The calculation is shown below in Table 20 using hypothetical data. The table following is provided blank to carry out the calculation.

Table 20 Example overall index calculation

Employee/contractor injury rate

Indicators

H&S management

7.5

Rating (R) (0 to 10)

7

0.125

Weighting (W)

0.5

7.5 x 0.125 = 0.94

Weighted rating

(R x W)

7 x 0.5 = 3.5




Overall

4

5.5

8

0.125

0.125

0.125

1

4 x 0.125 =0.5

5.5 x 0.125 = 0.69

8 x 0.125 =1

6.63

Table 21 Overall health and safety index calculation

Indicators

H&S management

Employee / contractor injury rate




Overall

Rating (R) (0 to 10)

Weighting (W)

0.5

0.125

0.125

0.125

0.125

1

Weighted rating (R x W)




A blank reporting form is given below.

Table 22 Index reporting form

Company X

Overall rating

(Scale of 0 to 10: 0 = worst, 10 = best)


Does this organisation conduct major hazard operations that would be covered by regulations such as COMAH, Nuclear Site Licenses, aircraft licensing, etc.?


Self assessed or externally verified (S or E)




Greenstreet Berman Ltd. 97 October 2003 Fulcrum House5 Southern CourtSouth Street, Reading, RG1 4QSTel 0118 938 7700 Fax 0118 938 7729

Printed and published by the Health and Safety ExecutiveC30 1/98

Printed and published by the Health and Safety Executive C1.10 03/04

ISBN 0-7176-2834-5

RR 217

78071 7 628346£25.00 9

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RESEARCH REPORT 217 - Health and Safety Executive · RESEARCH REPORT 217. HSE ... (SOHAS) The Health and Safety Executive ... A No Y 7 UW S B Yes Y 9.9 -E C No Y 9 -E D No Y 8 -E