Liam Crosby, Senior Programme Development Manager, ShareAction, considers the role of investors in improving health outcomes.
Social, economic and environmental factors play a massive role when it comes to our health.
We see this clearly from the Covid-19 pandemic, where people from the most deprived areas are twice as likely to die after contracting the virus.
It’s clear too when you look at the prevalence of obesity. As early as year six, children from disadvantaged communities are twice as likely to be obese. This is driven by a range of interconnected social and economic factors, including a lack of affordable, healthier food options on supermarket shelves.
And we see something similar happening in life expectancy data where those living in the poorest parts of the country will die nine years earlier on average than those living in less deprived areas.
It’s clear that the Covid-19 pandemic has not only highlighted, but also exacerbated these inequalities – through its effects on everything from employment to housing and education.
Health: A systemic risk
Much like tackling climate change, addressing poor health is crucial for society and the economy.
70 million workdays are lost each year due to mental health problems in the UK, and obesity related disease costs UK business £27 billion per year.
More fundamentally, health inequalities are injustices that undermine our collective wellbeing.
The UK government has committed to increasing healthy life expectancy by five years, and reducing inequalities between rich and poor. On a global level, the UN Sustainable Development Goals commit to reducing deaths from non-communicable disease by a third.
Achieving these aims will require monumental action on the social, environmental and economic conditions that shape our health.
This will mean greater scrutiny and pressure on the role that businesses play through their products, employment practices and effects on the environment.
The pandemic has been a wake up call
The Covid-19 pandemic has shone a spotlight on just how vital a healthy population is for economic prosperity.
The global economy shrunk 4.4%, while the UK economy saw its biggest slump in 300 years.
Meanwhile, the pandemic wiped out some 114 million jobs and 8.8% of global working hours last year.
Women, young people and low-skilled workers were hardest hit, causing the International Labour Organisation to warn of a ‘lost lockdown generation’.
Broadening the concept of health
Yet, too often, health is neglected by investors. Even where social issues are considered as part of ESG or responsible investing, health is often just a footnote, a passing mention in an annual report examined through the narrow lens of healthcare, or pharma.
We have already seen the power investors can have in encouraging companies to transition to more climate-friendly processes – which in itself has positive health benefits.
This same pressure now needs to be brought to bear to accelerate progress on the other factors that drive and shape our health.
Long-term Investors for People’s Health (LIPH)
There are early signs that institutional investors are beginning to wake up to this. A pioneering group, recognising obesity as a material risk, recently filed the first health-focused resolution at a UK retailer.
Building on this momentum, we’re developing a new programme – with funding from the Health Foundation and support from Guy’s and St Thomas’ Charity – to put health at the heart of responsible investment.
We want to support investors to consider health – and the social factors that drive it – within their decision-making processes, and drive up investment standards to narrow the health inequalities that we see today.
The new programme – Long-term Investors for People’s Health (LIPH) – will set out the business case for a healthier society and provide clear guidance on how investors can be part of the solution.
We’ll bring together a coalition of leading investors, to set standards of responsible investment and to make clear, evidence-based asks of companies which will improve people’s health, and build long-term portfolio resilience.
With the risks of inaction laid bare by the pandemic, there is both an ethical and financial imperative for investors to act.