Business-connected EHS: Why ROI tracking is essential
In a rapidly evolving business landscape, the traditional perception of the environment, health and safety (EHS) function as a cost center is overdue for a dramatic shift. Organizations are waking up to the reality that EHS when strategically managed and properly linked to financial outcomes can be a powerful driver of business value—not just for compliance or risk mitigation, but also for profit generation and growth.
The challenge? Proving the objective and demonstratable return on investment (ROI) of EHS programs.
The business case for EHS-driven value
Effectively meeting the baseline expectations from communities, regulators and investors is a core outcome of successful EHS management and allows a business to thrive. Fulfilling these mandates alone creates a strong business case for EHS investment. However, many EHS departments have struggled to communicate to the overall organization how EHS effectiveness powerfully supports core financial objectives.
Understanding and communicating the connection between strong EHS performance and value creation is an important but not straightforward task for EHS business leaders. In a 2024 study, Deloitte found that although leaders believe investment in sustainability (and by association, EHS) has positive return on an organization's overall value, the ability to quantify this value is limited because of the difficulties in quantifying the significant intangible benefits of an EHS program as well as in justifying the often-long time frame for the benefits to be realized.
Specifically, study results showed that not quantifying value can make it hard to secure, continue or grow investment, particularly when risk avoidance and intangible benefits are not considered. The study analysis report stressed the importance of measuring value to driving further progress in sustainability and EHS. The challenge persists—many organizations still underappreciate, or struggle to quantify, the full value of these investments—particularly when benefits are intangible or accrue over long time frames.
Tackling the intangibles: Making the invisible visible
One persistent challenge in EHS value measurement is the long-tailed or intangible nature of certain benefits—such as reductions in reputational risk or improvements in worker morale and workplace accident rates that could eventually drive productivity. But they're hard to quantify upfront. However, “not measurable” does not mean “not valuable.” It simply calls for creative thinking in metrics design, scenario planning, and the use of proxy indicators.
Steps to help transform EHS value measurement:
The payoff: Tangible returns and strategic benefits
When organizations find the appropriate approach—connecting EHS management with ROI tracking—they not only develop a culture that protects their people and the environment but they also position themselves for sustainable growth and profitability. Importantly, these benefits feed into a continuous cycle of value creation and innovation, drawing stronger links between EHS activities and the organization’s overall financial health.
Conclusion: Making EHS central to business value
Moving EHS from the realm of compliance and risk minimization to that of strategic value creation requires more than a change in measurement—it requires a mindset shift at all levels of the business. Deloitte has created a set of accelerators that can help organizations jump-start their journey to a business-connected EHS. In our follow-up blog post “The playbook: Activating EHS as a performance engine,” we will take the next step forward in promoting this mindset shift by providing a guide for initiating, justifying and reinforcing this new perspective on EHS.
