By putting safety and environmental issues front and center, waste management companies have the chance to grow their business, create better protective measures and develop best practices that can bring in new investment, putting them on a path towards sustainability.
By Robin Bolton
Corporate executives may view reporting environmental, social and governance (ESG) metrics as an inconvenience. However, it is now increasingly clear that companies actively reporting ESG data are enjoying a competitive advantage. Blackrock revealed that companies with better ESG profiles outperformed their peers in 2020, enjoying what has been dubbed a “sustainability premium.”
In March 2021, the Securities and Exchange Commission (SEC) created a Climate and ESG Task Force, citing increasing investor focus on the issue. The SEC is said to be preparing to make ESG reporting mandatory for all public companies, no matter their size. As the Biden administration prepares to implement strict net zero targets on the power sector and makes climate change a priority, ESG reporting has become a hot topic—even in the waste management industry.
As the sector looks to improve the collection efficiency of methane emitted from landfills, ESG reporting is set to play a key role to track and reflect this. But ESG reporting will not just be a benefit for shareholders and stakeholders. It will also affect the ultimate environmental impact of waste management facilities and can help ensure worker safety despite the increased risks of interacting with this highly dangerous gas. In short, this reporting may be just what is needed to help the waste services sector take the next steps forward in environmental responsibility and safety.
Photo courtesy of IsoMetrix.
Managing Methane
According to the United Nations, methane has a global warming potential between 28x and 34x that of CO2 over a 100-year period. It is even higher over the short term, being 84x to 86x as potent as CO2 over 20 years. It is, therefore, incumbent on the waste management industry to develop strategies to deal with this greenhouse gas in a way that has the least detrimental impact on the environment.
Managing methane involves greater risk for workers mainly due to its highly combustible property. Methane should ideally be used and not released into the atmosphere. This could be in power plants to generate electricity that either feeds into the national grid or used at the waste management facility itself. If left unmanaged, methane could collect within confined spaces on landfill sites, resulting in explosions if ignited or affecting workers if inhaled, from headaches to even death.
It could be easy for waste management companies to consider such challenges as standalone concerns. The temptation is to see reporting on the environmental impact of methane as a kind of paperwork, an obligation to shareholders that is separate from the issues that arise around worker health and safety. This siloed approach, however, is fraught with risk. It does not allow for the consideration of the greater picture of tackling climate change while also ensuring the ongoing safety of workers on the ground.
Centralized ESG Management
A centralized ESG management and reporting system allows companies to understand and manage these risks in one place. In other words, a centralized software solution provides companies with an easy way to manage all health, safety and sustainability risks. It enables companies to capture, document and report on sustainability metrics, while simultaneously managing the worker safety processes surrounding them. By using a system that manages data across different areas of concern and different locations, it becomes possible to quickly identify how a waste management company can more effectively reduce its environmental impact while at the same time putting safety first.
Safety, while top of mind in high-risk industries, is often overlooked as a key element of ESG. Falling under the ‘social’ aspect, it indicates to investors how seriously a company takes the well-being of its workers, with the additional effect of improving shareholder value. It is as much about internal staff as it is about external stakeholders.
The fact is, a fully integrated approach to ESG can help identify and resolve risks throughout the waste management process, beyond methane collection, mitigating against dangerous hazards that can arise despite the best efforts of workers. By its very nature, waste management is a risky business. It involves lots of moving equipment, from containers to rolling stock, and huge transfer stations where waste is transported and transferred to large trucks for removal to landfill. There are risks from falling debris, moving vehicles and uneven ground. Add the danger of methane flares, potential explosions, and maintaining equipment, and the need for a system that properly tracks every risk is clear.
ESG management and reporting can help waste management companies proactively manage risk and identify near misses. Looking at safety issues across the organization through the single lens of ESG means it is possible to see patterns in the data so you can put controls in place to prevent issues in the future and develop training programs that ensure workers are fully attuned to risk-mitigating procedures. By looking across the business as a whole, worker safety will be improved, in turn boosting the public image of the company and potentially attracting new investors.
Get Started
As a starting point, organizations should identify their disclosure objectives. That is, who their stakeholders are and what they should understand about the ESG initiatives in place and/or planned. This will help them chose the right framework, set
internal goals and select the technology tools to support information gathering, analysis, monitoring and managing. It is also important to evaluate internal resources to determine whether to appoint an internal ESG expert to manage the analysis and strategy implementation, an outside consultancy or some combination of the two.
As environmental concerns grow and greater government oversight looms, waste management companies that work to mitigate the impact of methane emissions—and who do so while ensuring worker safety and health—will see benefits far beyond the happiness of stakeholders and shareholders. By putting safety and environmental issues front and center, they have the chance to grow their business, create better protective measures and develop best practices
that can bring in new investment, putting them on a path towards sustainability. | WA
Robin Bolton is the ESG Principal at IsoMetrix, a leading risk management software company that provides ESG and GRC management solutions. For more information, visit www.isometrix.com/contact-us.