DEPARTMENTS
ETHICS
Editor’s note: The case study in this article is fictitious and is intended to highlight ethical issues in the practice of industrial hygiene. Any resemblance to real people or organizations is coincidental. The opinions expressed are those of the authors and do not necessarily reflect the opinions of AIHA, The Synergist, the Joint Industrial Hygiene Ethics Education Committee, or its members.
Responses to “Ethics and ESG Ratings”
The article “Ethics and ESG Ratings” in the April 2022 issue presents a fictional case study about the ethical issues related to environmental, social, and governance (ESG) rankings. A summary of the case study appears below, followed by responses from Synergist readers.
SUMMARY
Global General Appliances (GGA), an American multinational manufacturer and marketer of home appliances, has a new CEO who is enthusiastic about getting the company listed on ESG scorecards. He proposes to turn the EHS department into an ESG affairs department. GGA publishes a short corporate responsibility report each year, but the CEO understands that to get listed on important scorecards, he needs a much more robust set of initiatives and metrics and a longer annual publication. EHS staff feel pressured to give the CEO the numbers he wants.
Judith, a certified industrial hygienist who works at GGA, has proposed several new leading indicator metrics for environmental and safety issues. While GGA informally tracks many of these measures, Judith finds that the company misrepresents them as half-truths. She reports the shortcomings to her boss, who tells her it’s going to be an uphill slog getting senior executives and the board of directors to commit resources to improving the quality of these metrics.
What are Judith’s options? How hard should she push back against the chain of command? How does she show the worth and positive impact of ethical ESG metrics? Should she quit her position at GGA due to the risk that pushing for better ESG performance might set back her career?
“This article raises quite a relevant problem: the credibility of ratings, labels, certifications, and so on. When they are only used to improve the company’s image, they may induce pernicious effects.”
READER RESPONSES
I think Judith needs to get some company leaders interested in fixing things that have been reported but not resolved. They have to understand they are at risk if inspectors come out, see the list of reported problems, and want an update on what the company has done to resolve them, or if someone gets hurt and inspectors come calling to understand how. ESG issues are important, but they are too far removed in this scenario for leadership to relate to them. Judith should first push harder to get leadership on board with fixing problems. Once she’s done that, she can relate the problems to ESG.
At the same time, Judith should report the ESG metrics honestly. I understand the leadership can pick and choose what they want to present to the board, but if those metrics start changing over time, the board probably will pick up on it and want to know why. Before she reports the metrics, she should show them to the leadership teams so she doesn’t make enemies. She should be respectful and work with them if they have issues with what is reported. They have probably earned and expect that courtesy.
—A digital Synergist reader
This article raises quite a relevant problem: the credibility of ratings, labels, certifications, and so on. When they are only used to improve the company’s image, they may induce pernicious effects, as illustrated in this example. The core issue is the company culture, which the CEO must explain, promote, and develop. Because the CEO does not appear to be effective at this, Judith and other managers and directors will have less influence. If Judith is sure to find another job in a better environment, she should quit her position at GGA.
—Michel Guillemin