3-20. Management Initiatives to Transform "EHS from a Cost to a Value"

For a long time, EHS (Environment, Health and Safety) in companies has been seen as a "cost for regulatory compliance." However, with the rise of ESG investing and sustainable management, there is a growing movement to position EHS not just as a cost, but as an investment that enhances corporate value. Strategic measures are essential to transform EHS into a source of added value for a business.

1. From Risk Reduction to Corporate Value Enhancement

EHS activities directly reduce the risks of accidents and legal violations, helping a company avoid potential losses from lawsuits, fines, or operational shutdowns. It is important to see this not as a "defensive cost," but as an investment that protects and enhances corporate value. Specifically, preventing occupational accidents and complying with environmental regulations leads to a reduction in reputational risk, contributing to long-term brand strengthening.

2. EHS as a Source of Innovation

Efforts to reduce environmental impact and improve safety can lead to technological innovation and the creation of new business models. For example, investing in energy-saving equipment and recycling technologies not only helps with environmental compliance but also directly leads to cost reduction and the development of new markets. Furthermore, creating a safe working environment contributes to employee motivation and productivity, and is evaluated as part of human capital management.

3. Gaining Stakeholder Trust

Proactively disclosing EHS data and complying with international standards like GRI, SASB, and ISSB is essential for gaining investor trust. As ESG investing expands, active investment in EHS raises a company’s profile as a "sustainable enterprise," which can lead to a lower cost of capital and a more stable stock price. It also makes a company a preferred choice for customers and suppliers as a "responsible business."

4. Concrete Management Approaches

• Introduce KPIs: Incorporate EHS metrics, such as occupational accident rates and CO2 emission reductions, into management KPIs to allow top management to monitor them.

• Design Incentives: Reflect the outcomes of safety and environmental improvement activities in personnel evaluations and compensation to embed EHS into the company's culture.

• Utilize Digital Tools: Use IoT and AI to grasp risks in real-time and enable data-driven decision-making.

• Integrate the Supply Chain: Require business partners to meet EHS standards to optimize the entire chain and strengthen competitive advantage.

Conclusion

To transform EHS from a cost into a value, it is essential to view it not as a "regulatory obligation" but as an "integral part of corporate strategy." By implementing management initiatives from multiple perspectives—including risk reduction, technological innovation, trust-building, and human resource utilization—EHS becomes a core element that supports a company's sustainable growth.