EHS Risk Management
GUIDE
What is EHS Risk Management in 2023?
EHS risk management is a way to identify potential safety and environmental hazards and minimize their impact on your company. In this guide, we’ll look at some of the challenges organizations face when it comes to risk management, and the tools available to help you meet those challenges.
EHS Risk Management
Risk has always been a part of doing business.
However, many of the risks organizations face today — such as cyberattacks, resource scarcity, and natural disasters due to climate change — didn’t exist or were barely acknowledged a few decades ago.
The risks organizations face today have changed and so have the tools used to identify and manage those risks. Keeping a log of risks in a spreadsheet is no longer the best way to get ahead of potential issues.
That’s why we created this EHS risk management guide.
Table of Contents:
What is EHS risk management?
Why is EHS risk management important?
What are the types of EHS risk?
What is EHS risk assessment?
What is the 5-step risk assessment procedure?
What is a risk register?
What is risk management software?
Next steps & additional resources
(If you’re looking for information about Lisam’s risk management software, visit our risk management software page.)
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01
Improve risk visibility by identifying “hidden risks” within your organization
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02
Reduce costs by dealing with business threats before they arise, rather than allowing them to develop into bigger problems
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03
Make informed decisions based on quantitative risk data, rather than guesswork or a “gut feeling”
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04
Demonstrate compliance and continuous improvement in relation to current and future regulations
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05
Increase shareholder confidence by lowering the company’s risk profile
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06
Gain a competitive advantage by operating efficiently
Benefits of a Proactive Approach to EHS Risk Management
What are the Types of EHS Risk?
Most of the time when we’re talking about EHS risk management, we think of safety risks. You’re probably familiar with job hazard assessment (JHA), which is one way of identifying safety risks related to a specific task or activity.
But safety is only one facet of EHS risk. EHS risk management encompasses many different types of risk across your enterprise. Often, these risks span many departments (finance, HR, operations) and activities — which is what makes managing these risks so challenging.
Here are a few common types of EHS risk:
Compliance risk: Potential exposure to fines, legal penalties, and losses when a company fails to comply with laws and regulations
Example: A company receives a serious OSHA violation for failing to use proper fall protection.
What is EHS Risk Assessment?
An EHS risk assessment is a formal process to identify potential environmental, health and safety hazards related to your organization’s operations. Conducting an EHS risk assessment can help you determine which risks pose the greatest threat to your operations, and identify controls to reduce the level of risk.
You should conduct a risk assessment any time a hazard is identified, or there’s a change to your operations that could introduce new risks.
Since there are so many different types of EHS risk, EHS risk assessments can vary widely in scope. Here are a few well-known types of risk assessment:
- JHA
- JSA
- Environmental risk assessment
- Climate risk assessment
Next, let’s look at the steps to conduct an effective EHS risk assessment.
1. Identify Hazards
A hazard is anything that has the potential to cause harm to people, property, or processes. This includes everything from heavy machinery to chemicals, electricity, working alone, or even driving.
Some hazards can be identified simply by taking a thorough look at the worksite. However, other hazards — especially non-routine situations like maintenance or cleaning — may be more difficult to observe. In that case, talking to workers who are familiar with the task or facility, asking lots of questions, and capturing employee observations can help you to identify potential hazards you might otherwise have overlooked.
2. Determine Who Might be Harmed and How
As you identify hazards, you’ll need to think about the possible consequences of each hazard. For example, if you’ve identified improperly stored chemicals as a hazard, some of the possible consequences might be:
- Chemicals could degrade
- Workers or cleaning staff can be exposed to a hazardous substance
- Leaks or spills
- Fire or explosion
It’s important to remember that risk assessments not only cover hazards to employees, but to anyone who might be impacted by your operations. Subcontractors, maintenance and cleaning personnel, customers, visitors, the community, and the environment will all need to be carefully considered during the risk assessment. For example, an accidental release of chemicals could impact not only your operations but also the local air or water supply.
3. Evaluate & Prioritize
Next, you’ll need to determine the level of risk related to each hazard you’ve identified. Some risks — like the risk of a chemical explosion — are very severe but very unlikely to occur. Other risks may have less potential for harm, but be more likely to occur.
It doesn’t always make sense to implement controls for every single risk you’ve identified — nor would it be feasible to do so. Instead, you’ll need to focus your efforts on those risks that are most severe and most likely to occur.
One way to determine which risks are most serious and therefore need controls is by using risk scoring. Risk scoring is the process of assigning a numerical value to a risk depending on its severity and the likelihood that it will occur. Scoring gives you an objective way to compare and prioritize risks across your organization. Here’s an example of a risk scoring matrix:
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