Budgets for environment, health, and safety (EHS) are expected to increase in 2016 at 75% of the companies surveyed by independent research firm Verdantix.

The new global survey of 312 EHS executives found that 10% of firms will increase 2016 EHS spending by double digits, while an additional 21% will increase spending by at least 5%. Only 3% of surveyed executives expected EHS budgets to decline in the coming year. The proportion of respondents who are planning to increase spending next year (75%) is a significant increase over the number who reported budget growth in 2015 (62%).

Key Insights

• Training and hiring are expected to account for the largest share of budget increases in 2016, while operational excellence programs, CEO focus on sustainability, and improved financial performance were also noted as drivers of larger budgets.
• Incident management and risk analysis were noted by more than 50% of respondents as high priority items that will be addressed in 2016.
• EHS auditing was flagged as a high priority item by 45% of the respondents.
• Voluntary certifications will see the lowest increases in investment.
• Environmental consulting expenditures are expected to grow at 40% of responding companies, while 57% of responding companies anticipated flat 2016 budgets.

Changing EHS Perceptions

Verdantix CEO, David Metcalfe noted that the survey data may indicate an emerging shift in EHS perceptions. “EHS has traditionally been viewed as a function which should deliver compliance at minimum cost,” Metcalfe commented. “Our survey data show that this negative perception of EHS is changing. Thirty-six per cent of the EHS managers we interviewed state that their CEO believes EHS impacts short-term or medium-term financial performance. And the top two drivers for EHS budget increases are operational excellence and CEO support for sustainability goals.” Increasing awareness of the linkage between EHS and financial performance could bring about future changes in EHS priority at leading companies.

Photograph:Money by Nerijus J, Vilnius, Lithuania

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