Reporting variables makes comparisons difficult
How relevant are injury rates?
It’s somewhat tricky to interpret the true relevance of any injury rate greater than zero without an accompanying context.
Let’s assume two peer companies calculated an identical OSHA Total Recordable Incidence Rate (TRIR) for the same period of time. Company A experienced only injuries that were classified as Medical Treatment Cases (MTC), but Company B recorded more serious injuries than MTCs. Who has performed better in spite of both reporting the same TRIR?
After briefly reviewing the websites of Walmart and ExxonMobil, the following OHS metrics were found:
Walmart – 2018 Global Responsibility Report
- “OSHA recordable incident rates – Walmart U.S. and Sam´s Club vs industry”: bar chart displaying values for the period 2012 to 2017.
- “ESG - Commitments and Progress Priorities, Metrics and Results”: does not address OHS metrics.
ExxonMobil - 2017 Sustainability Report Highlights
Performance Data table – Safety, Health and the Workplace. The following OHS metrics were tabulated for the period 2008 to 2017:
- Fatalities – employees
- Fatalities – contractors
- Fatal accident rate — total workforce
- Fatal incident rate — total workforce
- Lost-time incident rate — employees
- Lost-time incident rate — contractors
- Lost-time incident rate — total workforce
- Total recordable incident rate — employees
- Total recordable incident rate — contractors
- Total recordable incident rate — total workforce
- Process Safety Tier 1 Events (API RP 754 guidance)
- Number of regular employees at year end
A few observations:
- There is no common vocabulary or uniformity in the way OHS metrics are reported
- Reported OHS metrics in each report are all lagging indicators
- Both companies refer to one or more standards such as GRI, IPIECA, IOGP, API, and neither follow one single standard in its entirety.
Reporting OHS metrics
Slogans such as “Journey to Zero” and “Our Goal… Zero Harm” are vague pledges when no deadline period is set as to when zero occupational injuries and illnesses should be achieved.
The so called OSHA TRIR is the most popular metric reported, but it can be misleading. Comparing a company’s TRIR with outsourced support activities (legal, payroll, advertising, R&D, maintenance, etc.), against the TRIR of a peer company with a full in-house support organization is not a good comparison. The lean company will have relatively less working hours clocked by lower risk exposure personnel than the peer company with in-house support.
Plus, one recordable injury will have a greater negative effect on the TRIR of a smaller company than in a large one (less working hours to “dilute” the event).
A period of three years seems to be more appropriate to show the recent evolution of leading and lagging OHS metrics. Companies should choose one standard when reporting OHS metrics, such as GRI, IPIECA, IOGP, etc. OHS related metrics should be discussed when presenting quarterly financial results to current or potential investors. And the “Journey to Zero” motto must have a sensible goal of eliminating all OHS incidents; otherwise it will be just another marketing slogan.