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EHS

EHS, Sustainability Functions Combined at 32% of Companies

EHSEnvironment, health and safety (EHS) and sustainability functions are combined at about a third of companies that responded to the National Association for Environmental Management’s (NAEM) most recent survey.

NAEM’s 2016 Staffing, Structure and Budgets report, based on a survey of 193 companies, says 59 percent of companies are managing EHS as a combined function at the corporate level. And 32 percent have a function that combines EHS with sustainability.

The organization’s 2012 report found 35 percent of corporations were combining EHS and sustainability functions.

NAEM executive director Carol Singer Neuvelt told Environmental Leader that the 2012 report was the first time NAEM documented the two functions being combined at the corporate level. “It also demonstrated that the EHS function plays a lead role in activities that companies define as ‘sustainability programs’ in their external communications, often without a change in function name inside the company,” she said.

The new survey confirmed those findings. “What this tells me is that for some companies, there are strong efficiencies to be achieved by combining the management of these activities into a single function,” Singer Neuvelt said. “For other companies, managing sustainability as a stand-alone function has distinct strategic advantages.”

The report found 28 percent of responding companies have “stand-alone” sustainability functions, assigning activities such as goal setting, carbon disclosure and lifecycle analysis to a dedicated department.

“The takeaway is that there is not one ‘right’ way to design an organization,” Singer Neuvelt said. “How a company chooses to structure itself really depends on the organization’s goals, its level of risk, its size, the nature of its operations and its level of program maturity.”

The NAEM survey follows research by Verdantix that shows a trend towards the head of sustainability role “disappearing” as companies increasingly turn “responsibilities over to the VP of environment, health and safety or to the director of corporate responsibility,” said Yaowen Ma, Verdantix industry analyst. The role is slowly becoming redundant as sustainability programs mature and other function heads take over.”

The Verdantix study predicts that spending by heads of sustainability on consulting services will shrink by 2.4 percent a year over the next five years, from $417 million in 2016 to $369 million in 2021. By contrast, other business functions such as finance, sourcing, and product design will spend more on sustainability projects resulting in compound annual growth for the entire market of 4 percent over the next five years.

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