Reporting organisational health data: the powerful leverage

Investors are looking for more transparency on the risks and opportunities companies are facing related to sustainability practices, increasing the importance to report data about Environmental, Social and Governance matters (ESG).  

Reporting ESG-data and hence S data is getting increasingly important. Data related to health, well-being and safety at work are part of the social pillar of ESG, but there is still a big gap in this area, considering that about 80% of European companies still do not perform a psychosocial risk assessment. This is either due to the assumption that there are no risks or to the belief that the risks are already known, or even due to a lack of knowledge of the subject and fear of the results they may obtain.  

Data on organisational health is missing in a majority of companies. However, it is worth investing in it as this creates value and advantages for the company. The collection and reporting of health and safety data obtained by psychosocial risk assessment is a key management tool. It provides guidance on the organisational progress and inputs that may help organisations to determine and meet objectives and enables a better day-to-day management. It also helps organisations overcome negative impacts and mitigate psychosocial risks, acting as an important instrument for preventive actions. 

Psychosocial risk assessment aims to understand the likelihood and consequence of psychological harm occurring in the organisation due to psychosocial hazards of work, such as job demands, workload or leadership support. Knowing the likelihood of occurrence various adverse harm health effects like burnout, stress-related absence, exhaustion, or fatigue, allows prioritising risk mitigation actions. The risk matrix approach is a functional, highly effective risk representation that organisations can adopt, highlighting the combination of the probability of an adverse event (hazards) and the negative consequences of these effects (harms). (Taibi et all, 2022) 

Reports on organisational health and safety in large industrial companies revealed that companies have placed greater emphasis on the conventional metrics of occupational health and safety and have resumed reporting of data on occupational accidents and absenteeism, neglecting data such as standards and management initiatives that support wellbeing, training programmes, and other data from monitoring systems (Evangelinos, et al., 2018).  Although it is widespread practice in human resources to regularly report, many of the reported data are deprived of metrics, with an inconsistent structure and without well-defined phases. The main concerns in HR reports are limited to quantitative data such as career progression, diversity, inclusion, and turnover; wellbeing is often neglected, due to the disregard of indicators such as achievement, appreciation, recognition, and interpersonal relationships (Bruwer, et al., 2022).        

The quality of the information disclosed in organisational health reports translates into important guidelines for leaders to ground business strategic decision making, however there is still much work to be done as studies reveal that reporting only exposes 10% of the total information, with 44% referring to safety, 22% to well-being and the remaining related to occupational health. Regulated indicators are the focal point of the reporting, while the data related to psychosocial risks are the most neglected. 

The actual regulation is one of the most important indicators for the quality of the reporting in the European companies, proving that the existence of a certification system ends up being an additional motivation for the companies to assume this commitment to health and wellbeing reporting.  Another driver is the existence of an organisational health and safety management system because it provides the basis of a psychosocial risk management strategy. Third-party validation of reports is also an important part of quality assurance, as it tests the accuracy, comparability, and reliability of the information. On a scale of 0 to 30, on average, European companies score 12 points on quality check. This indicates that companies still continue to attribute more weight to general safety indicators, revealing low readiness to disclose data related to health and wellbeing (Alves & Ramos, 2021).  

Investment in organisational health-related data reporting proves to be financially profitable, as it yields returns for people, but also has positive impacts on the organisational image and reputation that consequently leads to customer loyalty, increased productivity, and financial returns.  It allows stakeholders to analyse the company’s long-term performance, encourages people to define their values, leading to greater competitive advantage to attract and retain highly skilled and talented workers. Companies that disclose their health and safety data have higher performance due to greater involvement in effective health and wellness practices allows organisations to be better prepared for future regulations and as well to be compliant with the existing ones. The upcoming European regulation on ESG report (CSRD – Corporate Sustainability Reporting Directive) will further strengthen this need. 

What can organisations do to ensure they get quality health and wellbeing data to report? By following these guidelines, organisations will certainly be closer to a certainly be closer to achieving this aim: 

• Identify your moral and ethical values: this will facilitate goal setting;   

• Identify the gaps between what you are doing now and where you want to go: this will allow you to define the best practices to meet the objectives;  

• Improve the quality of data that relates to prevention and risk mitigation measures;   

• Consider data as an asset and combine it with context to interpret it deeply;   

• Implement appropriate metrics to ensure diverse, consistent and comprehensive data to avoid incomplete and potentially misleading disclosures;   

• Implement a management system where information is linked to principles such as reliability, relevance, comparability and accuracy;   

• Follow the country’s and European legislated guidelines and the guidelines of regulators in health and welfare.   

References 

Alves, C., & Ramos, M. (2021). Occupational Health and safety: Quality and determinants of its disclosure in sustainability reporting. Jornal of Business Management. 

Bruwer, M., Scholtz, S., Beer, L., & Rothmann, J. (2022). The Human Capital Risk Reporting of Listed South African Companies: Exploring a Reporting Framework to Support Corporate Governance. Administrative sciences.  

Evangelinos, K., Fotiadis. S., Skouloudis, A., Khan, N., Konstandakopoulou. F., Nikolaou. & L., Lundy, S. (2018). Occupational health and safety disclosures in sustainability reports: An overview of trends among corporate leaders. 

Emerick, D. (n.d.). What is ESG Reporting? Access in https://www.esgthereport.com/what-is-esg-reporting/

Global Monitoring Report (2021). WHO/ILO Joint Estimates of the work-related Burden of Disease and Injury, 2000-2016.  Access in https://www.ilo.org/wcmsp5/groups/public/—ed_dialogue/—lab_admin/documents/publication/wcms_819788.pdf

Taibi,Y., Metzler, Y. A, Bellingrath, S., Neuhaus, C.A & Muller, A. (2022). Applying risk matrices for assessing the risk of psychosocial hazards at work. Sec. Occupational Health and SafetyVolume 10 – 2022 | Access in https://doi.org/10.3389/fpubh.2022.965262