As the global focus on ESG performance grows, operational risk management (ORM) and process safety management (PSM) have never been more important. Effective ORM and PSM are key to ensuring the safety of employees and the communities where businesses operate. However, as Sphera’s seventh annual Safety Report shows, organizations still struggle to achieve 100% of planned safety-critical maintenance in a typical month, contributing to a gap between process safety goals and the reality of process safety. According to our report, only 67% of safety-critical maintenance is achieved in a typical month.
The percentage of respondents reporting a gap between process safety intent and reality increased this year. Sixty-nine percent of respondents reported a gap between their companies’ process safety goals and what is achieved, up from 21% in last year’s report. “The Great Resignation” has created operational challenges for industries such as Oil & Gas, Manufacturing and Chemicals/Petrochemicals, and could account for the widening gap reported this year. Employees moving from one company to another has resulted in the loss of valuable knowledge and experience.
This loss of expertise means that process safety can be compromised, and this highlights the need for institutionalizing best practices and process safety knowledge to ensure knowledge isn’t lost as employees leave their roles. Issues identified in the 2021 report such as limited resources and limited budgets could also partially account for the widening gap.
As the gap between process safety goals and the reality of process safety widens, the focus on ESG continues to intensify. ESG is emerging as an essential tool for keeping people and communities safe. This year was the first time we surveyed respondents about where process safety management fits within their ESG strategies.
As our report shows, the majority of PSM and ORM professionals believe that ESG is relevant for PSM. I’m excited to see that many ORM and PSM professionals are leveraging ESG as a guiding framework in process safety management and operational risk management. But operationalizing ESG within an organization comes with its own challenges, especially when a company lacks the tools for it. The right software, data and expertise can pave the way for successful ESG performance.
While survey respondents recognize the ability of technology solutions to enable effective process safety management and reduce vulnerability to near-misses and major hazard events, our report indicates that few respondents take advantage of the full range of technology solutions available to them. Low levels of technology adoption can be attributed to the challenges many organizations face in connecting disparate systems of data. With the increased spotlight on ESG performance and the ongoing advancements in technology, more organizations may be prompted to adopt technology solutions moving forward.
For many PSM and ORM professionals, technology offers a wealth of benefits. Technology solutions and real-time data can provide a more accurate and actionable risk assessment, which enables proactive risk management. Technology can also be a tool for capturing and sharing institutional knowledge across an organization, helping to close knowledge gaps that are created when experienced employees leave a company. It allows companies to achieve greater safety, sustainability and productivity, laying an essential foundation for operational ESG.
Our report shows that respondents are concerned about environmental impact scenarios more than any other kind of impact scenario. As the consequences of climate change become more apparent across the globe, it’s clear that climate change is becoming too big a problem to ignore. We must act now to prevent its worst effects.
When it comes to environmental impact scenarios, the stakes for PSM and ORM professionals are higher than they’ve ever been, with a company’s reputation and finances on the line. Increased scrutiny from investors, regulators and the public means companies will have to focus more on the impact they have on the environment. This year marked the first time we’ve surveyed respondents about environmental impact scenarios, and we expect to see the focus on the environment continue to grow in the coming years.
PSM is now seen as a relevant part of many companies’ ESG programs. Once seen as optional, having a strong ESG strategy is fast becoming mandatory. With the right data, software and expertise, companies can operationalize ESG across their organizations and create a safer, more sustainable and productive world. I invite you to download the report to learn more about the challenges companies face in managing and reducing risk, as well as the recent trends and developments in PSM and ORM.