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Operational Excellence

The Importance of EHS Compliance

Written By: Joe Demski
July 19, 2022
7 min read

All lawful construction businesses operate under highly regulated conditions where there are comprehensive legal guidelines in place around every aspect of how their company interacts with the natural world and what it is doing to maintain the health and safety of workers and any other community stakeholders connected to the outputs of a construction project.

Construction businesses have a vested interest in complying with EHS regulations because failure to do so could result in loss of life, critical losses to public image, construction project delays, and the potential to be put out of business if economic losses or legal violations are severe enough to lead to losses of licensure.

To put the importance of EHS compliance within the construction industry in context, consider one of the most serious workplace accidents of all time which lead to some of the highest ever OSHA EHS penalties ever rendered in the United States:

On February 7th, 2010 a natural gas explosion at the Kleen Energy Power Plant under construction in Middletown, Connecticut resulted in the death of 6 workers, injuries to more than 50 employees, $8,347,000 in penalties rendered by the U.S. Occupational Safety and Health Administration (OSHA), over $16.6 million in damages issued to Keystone Construction & Maintenance and Blue Water Solutions following a federal investigation by the U.S. Chemical Safety and Hazard Board (CSB) determined that the accident occurred as a direct result of improper management and employee negligence.

In this article, learn more about the importance of EHS compliance for construction industry service providers.

What is EHS Compliance?

EHS compliance (Environmental, Health, and Safety) is a blanket term that refers to all the laws, rules, regulations, procedures, programs, roles, policies, and efforts put in place to help protect the safety and health of your team, the public, and the environment from workplace-related hazards and dangers.

EHS is a legal requirement for construction businesses and failure to comply can result in some serious business risks that need to be mitigated:

  • Injury, illness, and death: Though construction workers only represent 6% of the U.S. workforce, they sustain 20% of all on-the-job injuries. Failure to ensure the safety of workers and other community stakeholders creates a very serious liability for construction businesses.
  • Fines and penalties: Failure to comply with EHS recording, tracking, and reporting guidelines exposes construction companies to major fines and penalties.
  • Civil lawsuits and criminal charges: The most serious EHS violations will result in civil or criminal legal proceedings leading to the serious financial strain being placed on the business.
  • Losses in worker confidence: Notable safety violations and public fines do very little to create a culture of confidence in workers and can make it harder to attract and retain highly qualified employees.
  • Failure to generate business: Quality issues can dramatically limit the ability of construction contractors to secure new projects when news gets out about how inefficient operations lead to major violations and safety issues.
  • Destruction of the natural environment: Many areas of EHS compliance revolve around ensuring businesses are not harming the environment.

Why EHS Compliance is Important in the Construction Industry

The construction industry is the largest in the entire world and is responsible for generating 13% of the world’s GDP. In 2020, the construction industry contracted by 3.1%—the largest decline since the 2008 financial crisis—yet in the last two years has rebounded dramatically and been invigorated by an industry-wide shift to digital transformation that brings quality management to the forefront.

EHS compliance is a major area of concern for C-suite executives seeking to deliver the highest quality construction products and services. Advances like the shift towards modularization have created a lot of opportunities for contractors to deliver better business operations and higher quality benchmarks but areas such as environmental, health, and safety compliance remain major liability risks for executive teams.

Today’s most effective enterprises have realized the immense potential to use software to handle the complexity and nuance of addressing the evolving landscape of compliance demands in their respective industries. For construction service providers the stakes are very high: while business continues to pick up following the slow down 2020, today they are faced with a heightened sense of urgency around implementing the best practices to secure profits today and long into the future.

EHS is a major concern for business owners and management teams responsible for generating business development results. Every construction company has different EHS regulations to be aware of but following them is of supreme importance and should not be neglected. Compliance can be seen as a challenge or an opportunity and today leveraging the right construction management software is the key to realizing the potential of EHS compliance to generate real cost savings.

How to Track EHS Compliance in the Construction Industry

The most effective way for construction businesses to track EHS compliance is to use enterprise construction management software solutions. Today, the most advanced construction business rely on the utility of cloud-powered software to ensure their teams, job sites, and businesses are not creating unnecessary risk and the potential for catastrophic and dangerous outcomes.

EHS compliance is an ongoing concern that is only becoming more and more serious as time goes on. Construction companies today have many more legal regulations, government agencies, reporting obligations, and considerations to make when it comes to achieving EHS compliance. This is why the absolute best way to track EHS compliance is by investing in an enterprise construction management solution.

Your enterprise construction management solution will:

  • Create a single and unified source for ensuring the accuracy of all reporting, recording, and tracking of EHS to ensure compliance with legal obligations
  • Generate comprehensive insights around how to improve EHS outcomes to promote greater safety while also reducing costs and supporting more efficient business operations
  • Allow your business to ensure you are doing everything you can to recognize EHS opportunities and reduce all risks associated with issues of non-compliance

EHS Regulations to Follow

It is the responsibility of every construction company to understand the specific EHS regulations connected to the jurisdictions where they do business. Each local, state, national, and transnational jurisdiction a construction business operates in will have a range of different requirements connected to areas of general health and safety of construction contractors, workplace health and safety of workers, environmental impact, and other areas of regional EHS concern.

All construction businesses need to have management systems in place to support the ongoing compliance process audit program. They must ensure their management systems verify compliance needs and match operations with industry regulations. An audit program is essential for evaluating risk and ensuring the right steps are being taken to mitigate all ongoing environmental, health, and safety risks.

FAQs

What does EHS mean in the workplace?

EHS refers to "environmental health and safety" responsibilities that require businesses follow specific procedures in response to regulatory requirements. Failure to comply with EHS rules could lead to damages to a company's reputation. Construction managers need to develop audit programs to ensure they are taking the proper steps to reduce EHS risks.

What is an EHS compliance Manager?

An EHS compliance manager is tasked with overseeing ongoing compliance processes to ensure a business is operating lawfully with respect to its environmental, health, and safety legal obligations. EHS managers help to ensure a safe working environment for workers. They are also responsible for all EHS management activities necessary to protect the natural environment in line with legal obligations.

What are the five steps to compliance?

Achieving legal compliance requires:

  1. Understanding the full scope of the law and all reporting requirements
  1. Performing an audit to ensure all business operations are in-line with compliance needs
  1. Evaluating the results of a compliance audit to identify areas to improve
  1. Completing interventions to promote compliance initiatives
  1. Creating the appropriate structures to ensure these compliance processes are sustained

What does EHS stand for?

EHS stands for Environmental, Health, and Safety.

Written By: Joe Demski

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