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Managing Process Safety and Operational Risk: Challenges and Trends
Safety

Managing Process Safety and Operational Risk: Challenges and Trends

By | November 2, 2022

In many industries, effective process safety management (PSM) and operational risk management (ORM) enable organizations to make the most of their core competencies. With efficient, robust PSM and ORM processes and systems in place, organizations can focus on the products they manufacture or the services they provide knowing that their assets, people and the communities in which they operate are protected from harm.

Yet, there’s a wide range of internal and external factors that can interfere with the practice of PSM and ORM. Internal issues such as budget and resource availability come into play. So do global events and macroeconomic trends such as “The Great Resignation.” In our seventh annual Safety Report, we examine these issues and others as we look at the current state of process safety and operational risk management.

ESG Matters

Our 2022 Safety Report is the first to include survey responses on the topic of Environmental, Social and Governance (ESG), and our findings indicate a widespread belief that PSM goes hand in hand with ESG. Eighty-seven percent of respondents report that PSM fits within their ESG programs, with most finding it relevant for their governance program and a slightly smaller group finding it applicable to the environmental component of ESG. Concern for the environment is also apparent in findings on impact scenarios, with 71% acknowledging that environmental impact events are troubling for their business and 58% highlighting scenarios that have an impact on human habitation as problematic.

While process safety management has always been about keeping people safe, it appears that PSM professionals now view their work in the context of ESG. Yet survey results also suggest that organizations face challenges in operationalizing ESG.

Safety Report Cover 2
ReportSafety Report 2022
The focus on environmental, social and governance (ESG) performance has elevated the role of effective process safety management (PSM) and operational risk management (ORM).

Still Struggling to Achieve Safety-Critical Maintenance

Safety-critical maintenance and asset integrity inspections are essential for safe operations. But respondents report that in a typical month, only 67% of scheduled maintenance and inspections is completed, leaving one-third of this critical work unfulfilled. This is not a new development. For the past several years, this figure has registered between 62% and 68% in our survey findings.

What gets in the way? Seventy-four percent identify limited resources, and 66% point to conflicting priorities. Other challenges include inadequate planning, identified by 44%, and limited budget, identified by 41%.

When asked whether they are confident that they’re fully aware of their assets’ exposure to a major accident hazard, respondents say that they’re generally not confident. Furthermore, 69% report a gap between their organization’s process safety goals and the reality of process safety as they experience it. Knowledge loss may have something to do with this gap.

The Notable Consequences of Knowledge Loss

Despite the availability of technology solutions that institutionalize process safety knowledge, many organizations still rely on the expertise of individuals for effective process safety management. Critical knowledge resides with them, and information sharing often depends on them. So, the consequences of their departure—whether for retirement or a role with another company—are great.

“The Great Resignation” was underway before the COVID-19 pandemic began, but the trend gathered steam as workers reconsidered their jobs and work preferences during the pandemic. Our 2022 Safety Report highlights the challenges associated with this development: 62% of survey respondents report that loss of experienced personnel causes risk to increase on the plant or asset, significantly outweighing other factors.

Take a Closer Look at PSM and ORM Trends

Many investors and stakeholders now view company performance through an ESG lens, and that performance relies heavily on effective process safety management and operational risk management. Our 2022 Safety Report looks at PSM and ORM trends and provides insight into how business leaders can advance process safety and operational risk management using the tools available today. Download our report to learn more.

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