In this report we analyse all safety reporting provided by ASX200 companies as at 31 March 2020.
Serious safety incidents come at significant personal cost to employees and financial costs to employers. These incidents can have long term negative effects on employees and their families. For employers, these incidents bring a loss of productivity and operational performance while exposing the company to potential compensation claims. More broadly, companies risk losing their social licence to operate if such incidents are seen as systemic by the broader community.
Key findings:
- Safety reporting is now common but can be limited with the majority (130 of 200) of ASX200 companies reporting a safety metric. The most common metrics disclosed were traditional productivity-focused indicators, such as LTIFR and TRIFR, which provide limited insight into material safety risk exposure.
- There are major gaps in reporting with 70 companies not reporting any safety data, slightly up on 67 companies in the prior year. Crucially, 23 companies are in sectors including Industrials and Food & Beverage where safety issues are likely to be material.
- Many companies link safety to executive remuneration, but several provide no performance metrics - 90 companies linked their safety performance to executive remuneration outcomes, up from 85 companies in the prior year. However, our analysis identified 10 companies who linked safety performance to remuneration without disclosing any safety data or targets.
- The number of fatalities decreased to 20 from 22 in the prior year. These fatalities were at 12 companies compared with 13 companies in the previous year. Of concern, 94 companies did not provide any information on fatalities (leaving investors unsure of whether the silence meant zero fatalities). Contractors accounted for 5 of the disclosed fatalities.
- 36 companies went beyond basic disclosures and reported indicators relating to severe incidents or injuries. In addition, 17 companies disclosed “near miss” data, up from nine in the previous year.
- Contractor risk - Despite the widespread use of contractor labour, only 11 companies in the ASX200 separately disclosed the safety performance of its contractor workforce.
