Health is Wealth- Why we need to get H (Health) into ESG

The Covid-19 pandemic has shown how poor health and health inequalities undermine resilience within populations and impede economic development. As a result, health is increasingly seen as important as climate, and indeed both are linked. 

The key recommendations of the report, Levelling Up Health, launched in April by the APPG for Longevity with Rt Hon Matt Hancock MP, Secretary of State for Health and Care, Chris Whitty, CMO and Henry Dimbleby, leading the National Food Strategy, have been broadly supported[1].

This includes the key recommendation that business assumes a far greater role in contributing to the nation’s health, including the development of a Business Index to measure this.

Why? Businesses have direct influence on health through their direct influence on employees’ health as employers, the nature of the products and services they sell, and their external, both direct and indirect, influence on the environments and communities in which they operate and impact. Covid has shown that all these aspects require attention, and alignment towards improvement of our resilience and wellbeing as societies.

Business clearly has a large role in influencing the quality of work, which can be measured broadly in terms of 1) Job autonomy; 2) Pay; 3) Job well-being; 4) Job security and 5) Job satisfaction[2]. 

In addition, and as witnessed in the climate space, companies and their shareholders are coming to recognise that there is an increasing alignment between health outcomes, shareholder or public pressure, and cost of capital.

ESG (Environmental, Social and Governance) investing is now mainstream but is very largely focused on the ‘E’, that is, Environmental factors, especially regarding climate change[3].  But given the strong environmental influence on health outcomes, ESG framing for investments can also extend to assets which are not primarily health-focused, but which nevertheless have sizeable positive health effects: social housing and later life living being obvious examples which are positive in an ESG framework. 

In the session ‘Business and Levelling Up Health’ at the Healthspan conference (recording here) leaders involved in Business for Health  convened to outline plans for a Business Index and make the case for why ‘H’ needs to enter ESG frameworks.

John Godfrey, Founding director and Chair of Business for Health and Corporate Affairs Director at Legal & General, said:  ‘The Stevenson Farmer report first showed the high cost to business of mental health.  Quite apart from any moral and ethical concerns businesses have, there is a clear self interest in having a fitter and healthier workforce; it is terrible waste if people are unable to work in their 50s who otherwise could be having many more productive lives and years at work.  What we are trying to do at Business for Health with the Business Index is to try and develop some of the metrics, because what gets measured gets done and we want to help business on this journey’.

Mary Bright, Head of Social Affairs at Phoenix Group, added: ‘We have the potential to tap into an enormous amount of talent, wealth, new business and innovation opportunities that all come from the macro trend of living longer- and businesses who change and adapt early will be those who are successful.  ESG funds show a better return and businesses that align around purpose is the growth area. We see the role of business in health as a huge opportunity.’

Dr Annabel Bentley, Chief Medical Officer, AXA Health, added: ‘One of the most interesting areas is climate change as a source of ill health - and something that needs to be tackled as one of the highest priorities. It is encouraging that we are already beginning to tackle that via all the carbon initiatives. I hope the work of Business for Health will help us gather pace here as it’s a combination of factors that makes a difference. Whether you call it clean or healthy- clean food, clean energy, clean work and probably clean physical activity-  all of those things help individuals be healthier, help communities be healthier and help businesses be healthier.’

Jess Attard, Head of Food and Health at ShareAction, summed up the risks of not aligning around ESG: ‘Companies that are overly reliant on the sale or production of harmful products and services, leave themselves increasingly exposed to regulation to tax hikes to litigation to reputational damage.  We want to see companies shifting to healthier products and services that are better for the population, better for the company and better for investors. Our Tesco campaign has demonstrated the power of shareholders who have persuaded the company to set measurable and ambitious health targets to grow that portion of healthier sales. And we think that will really have tangible positive impacts on population health.’

The consensus is clear.  Consumers, companies and investors are fast beginning to recognise their important influence on population health.  But, work needs to be done to harness data to measure company performance on health and to have that embedded into ESG frameworks like we have seen with climate.

The good news is that health data and metrics are improving rapidly and the positive and negative health impacts of companies can, along with climate impacts, be assessed to encompass direct impact (e.g., employee health), secondary impacts (e.g., products and services sold) and contribution to health externalities (e.g., use of product by consumers). This is being explored in the design of an Open Life Data Framework by the APPG for Longevity, as published recently in the Lancet[4].

With health data plentiful and objectively credible, and at least on a par with climate data,  the time is now to incorporate “H” into ESHG.

Help us design the Business Index - NOW

We are encouraging everyone to get involved in the design of the Business Index for companies, employers and investors to measure contributions to health (now and into the future), as a prelude to a wider risk management framework by filling in the form here ideally by close of play 14 May. The feedback will inform a series of round tables we will be holding later in May and June 2021, and to which survey contributors will be invited.

This Index will help to identify ‘commercial determinants of health’ in their widest sense- share best practice, and generate knowledge to understand how business can improve population health, aligned to the ONS Health Index. The approach will be cross-sectoral and the working model will encourage smaller employers as well as larger businesses to be represented.

[1] All Party Parliamentary Group for Longevity, https://appg-longevity.org/events-publications

[2] The Health Foundation. https://health.org.uk/publications/long-reads/the-quality-of-work-and-what-it-means-for-health

[3] US Sustainable Investment Foundation

[4] Open Life Data to Support Healthy Longevity for All, https://www.thelancet.com/journals/lanhl/article/PIIS2666-7568(21)00081-7/fulltext