Workplace health and safety as a driver of long-term value in Australian listed companies

As stewards of the long-term retirement savings of working people, IFM recognises that maintaining high standards of workplace health and safety directly supports business performance and helps protect investment outcomes.

For us, promoting strong safety practices in the Australian listed companies we invest in goes beyond meeting compliance standards. It’s a practical and measurable way to reduce risk, maintain operational continuity, and support more resilient business models over time. Our approach actively aims to promote robust health and safety standards through strategic engagement and portfolio management.

We believe that a company’s health and safety performance can significantly impact its share price, either positively or negatively, underscoring the importance of this topic for investors. This highlights the necessity of incorporating health and safety 
considerations as an important element in active investment decision-making.

An Evolving Landscape for Australian Listed Companies

Future Development of Australian Workplace Health and Safety Regulations

The Australian workplace safety landscape is evolving significantly with the introduction of the Australian Work Health and Safety Strategy 2023–2033. The strategy was developed by Safe Work Australia, a government statutory body, and is supported by a regulatory framework that signals a national push to reduce workplace injuries, illnesses, and fatalities, with a particular focus on emerging workplace challenges.⁸

This ten-year strategy focuses on key priority industries and aims to drive continuous improvement in workplace health and safety outcomes across Australia, impacting listed entities. It also reflects broader trends that are shaping the development of Australian workplace health and safety regulation and wider landscape:

How IFM Engages on Safety in Australian Listed Equities Portfolios

Achieving a high level of Occupational Health & Safety (OH&S) within a listed or unlisted company requires a culture that prioritises continuous improvement, leading to changes in behaviours and mindsets of everyone at the company—from being reactive after an injury or illness has occurred to identifying and fixing issues before they may cause harm.

We believe our experience investing in Australian listed equities, combined with deep local market knowledge, distinctively positions us to address health and safety developments specific to Australia. We believe all companies have a duty to provide safe working conditions for their employees and that accidents and fatalities can significantly impact not only the workforce but also company performance through productivity loss, litigation, cultural impacts, and reputational damage.

Our active equities investment teams incorporate safety performance into their decision-making, recognising that poor safety practices often reflect deeper structural or cultural issues, such as inadequate oversight, misaligned incentives, or week internal controls, that may signal broader investment risks. 

We engage directly with listed companies, where appropriate, on safety issues, particularly when concerning trends emerge. We expect listed companies to disclose comprehensive safety performance data, including both leading indicators (such as near-miss reporting and safety training rates) and lagging indicators (including lost-time injury frequency rate and total recordable injury frequency rate). We expect listed entities to respond transparently to serious incidents, including the timely disclosure of fatalities to the stock exchange, clear information on consequence management, and publication of investigation outcomes. These expectations are designed to ensure accountability and to encourage continuous improvement in safety outcomes.

Executive remuneration is another area of focus. We believe safety performance should be meaningfully reflected in variable pay structures, particularly for executives with operational or risk management responsibilities. Where this alignment is lacking, we may vote against remuneration reports to send a clear signal to boards and management. 

In cases where persistent safety concerns or patterns of inadequate board oversight emerge, we may escalate through our proxy voting rights. This may involve voting against the re-election of directors who hold specific safety oversight responsibilities - beginning with relevant committee chairs, and, if necessary, extending to the board chair and other independent directors. This escalation process is a core part of our stewardship framework and reinforces our commitment to holding companies accountable for worker wellbeing and operational 
integrity.

Ultimately, our engagement on workplace health and safety is aligned with our values, and is grounded in our purpose: to invest, protect and grow the long-term retirement savings of working people.

For full details, including all disclaimers applicable to the data contained herein, please refer to the complete article. 

^{1 Safety Should Be a Performance Driver}

^{2 Thriving workplaces: How employers can improve productivity and change lives | McKinsey}

^{3 Business Case for Safety and Health - Overview | Occupational Safety and Health Administration} 

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^{5 Australian Workers Compensation Statistics 2018-19p FINAL_contents_fix}

^{6 Healthy work environments slash costs of workplace injuries and illnesses, study finds}

^{7 Safety culture, safety performance and financial performance. A longitudinal study - ScienceDirect}

^{8 Australian Work Health and Safety Strategy 2023–2033 | Safe Work Australia}

^{9 Mental health | Safe Work Australia}

^{10 Australia: Risky business - addressing psychosocial hazards in the workplace - HFW} 

^{11 Emerging Challenges - Australian Work Health and Safety Strategy 2023-2033 | Safe Work Australia}

^{12 2024 Annual Sustainability Report | IFM Investors}