Superior Environmental, Health, and Safety Performance: What Is It?

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Courtesy of Richard MacLean & Associates, LLC


Ask any business executive or stock analyst “What are the best performing corporations, and why?” and they will immediately respond with the names of companies that have superior results, based on a handful of financial parameters. Price-to-earnings ratio, return on equity, total shareholder return, beta, and so on are universal corporate benchmarks. Indeed, definitive, comparative profiles of corporations can be summarized on a single page—in, for instance, reports by Morningstar, ValueLine, Thompson, and Hoovers. Lists of the “Top 100” and “category kings” appear in publications such as Fortune and the Wall Street Journal with only a few columns to differentiate “winners and losers.” Environmental, health, and safety (EHS) performance is an entirely different matter, however. Just what is superior environmental, health, and safety performance?

About This Article

This article explores the published literature and regulatory definitions of superior EHS performance, and summarizes the opinions offered in survey responses from 60 senior environmental, health, and safety professionals. As this article explains, the survey found no consistent definition of superior environmental, health, and safety performance. Fifty-two companies were identified as “having it,” but the reasons for their selection differed greatly. The published literature and regulatory and legislative definitions do little to add clarity. Clarity on this issue could significantly advance progress toward sustainable development. This article offers suggestions on how it could be achieved.

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