While climate change is a global concern for us, a more local concern is the safety of the people who work for the companies we invest in.
Their approach to safety management, especially when their operations involve higher elements of risk, often reflects a wider attitude to risk and continuous improvement. And the riskier the working environment, the more robust the approach needs to be—which is where our expertise and approach to ESG can help.
Our timberland portfolio consists of three unlisted assets actively managed by an internal investment team. Active asset management encourages greater focus on operations, including helping to improve the safety culture in our investments. Given our sizable equity interest, we’re afforded nine board seats across our three timber companies. One of our nominee directors is also Chair of the Health and Safety Committee on these boards, playing a very direct and active role in safety management. To that end, we’d like to highlight some of the safety initiatives that have led to an improved safety culture.
Our timber investments are supported by Hancock, an experienced global timber manager who manages the daily operations of these businesses. Bill McCallum, a senior representative of Hancock, shares some insights on the safety considerations at our New Zealand timber plantations.
Members who are passionate about ESG issues might be surprised to learn that we invest in timber plantations. What kind of forests are they?
They’re largely Radiata pine forests—an exotic species endemic to California, specifically the Monterey Peninsula. Radiata grows relatively quickly on a wide range of sites and produces high-quality wood fibre. The timber is widely used in the Australian and New Zealand construction industries.
The forests meet the strict investment-grade criteria of UniSuper. They’re well-documented, well-researched and have been historically well-managed.
How challenging is forestry for the people who work in it?
Tree-felling can be a high-risk activity—large trees on steep terrain. The second high hazard activity on steep land is ’breaking out’—attaching wire ropes to the felled stems so they can be winched to a central processing area. Until recently these two operations were undertaken entirely manually. Manual tree felling and breaking out are the two critical risk operations undertaken by workers.
How has safety improved?
Our operations have had the capability to fell and break out trees mechanically on easy terrain for several years, but it was a real challenge to extend the mechanisation of these operations onto steep land. It was a mission which many in the industry regarded as unachievable.
In 2013, our timber business led a major change in the New Zealand forest industry. This led to mandating mechanised tree-felling on steep terrain by 2015. By working closely with key contractors, over 80% of our steep country is now felled mechanically.
These improvements reflect UniSuper's intense focus on continuous improvement and the prevention of harm to the people working in all its assets.
Our operations extend beyond forests—to transportation, for example. How have these safety learnings extended to associated sectors?
Historically, it’s fair to say the forestry industry focused on in-forest operations. There wasn’t the same level of focus extending to log transportation on public roads. With UniSuper’s involvement, these companies became very conscious of the extended responsibility for the entire supply chain and the safety of the people beyond the forest gate.
Both in New Zealand and in Australia, there have been, for many reasons, an unacceptably high incidence of road accidents involving log trucks. Although there was some progress, with a decline in on-road accidents, we were still far from achieving the goal. With the support of UniSuper’s nominee director, a team of transport health and safety experts was engaged to look at log transport safety from a fresh perspective—extending from the physical infrastructure of in-forest landings and roads, to public road and highway conditions, the types of trucks and trailers our contractors were using and the hours our people were working—and came up with an extensive list of observations and recommendations of areas for potential improvement.
How has safety improved for the workers and contractors?
One example is our focus on driver fatigue, which is an issue for all heavy transport operators. The industry is characterised by long days and driver fatigue is thought to be a factor in at least 12% of road crashes.
One of the initiatives implemented is the installation of in-cab rear facing cameras that monitor drivers’ faces to detect driver tiredness or lapses in attention. Once activated, an audible alarm sounds and seat vibrations alert the driver. Micro-sleep and distraction episodes are recorded and logged, which can then trigger further intervention from a dispatcher if required.
Two surprising outcomes were observed. One is that drivers (who, to some extent, initially regarded the technology as intrusive) are embracing the system because it’s helping to keep them safe. The other is that it’s helped identify and assist a number of people with sleeping disorders, notably sleep apnoea, which affects around 10% of drivers.
Safety is a key part of UniSuper’s approach to ESG. How has this made a difference?
I see UniSuper as an ethical institutional investor. UniSuper's strong focus on continuous improvement and the prevention of harm to the people working in its assets, has seen a tangible improvement in the overall safety metrics and culture. UniSuper demonstrates a strong, visible and caring leadership which resonates well with the staff at these businesses.
UniSuper doesn’t hesitate in providing resources to ensure an engaged and empowered workforce, investing in cultural surveys, training and development. Safety is a key measure UniSuper uses to evaluate the success of its investment in forest assets.