October 14 - Healthy economies depend on healthy populations. Covid-19 highlighted that in sharp relief. Yet in the pandemic’s wake, poor health is still cutting short millions of lives. Further still, the cost-of-living crisis is a health crisis. Cold, damp homes make people ill. When people have to choose between heating and eating, their health is going to suffer. Uncertainty and worry about finances matter as much for health as the effects of living on a low income.
Health inequalities are widening, and this comes at great cost. As well as damaging the lives of millions of people, widespread ill health has grave economic ramifications. Poor health is already estimated to cost 15% of global GDP. In the UK, people in the most deprived areas die over a decade earlier than people living in more affluent areas. Less than one in 10 British men manage to reach retirement in good health.
Just like the climate crisis, poor health has become a systemic risk that investors can’t afford to ignore. We can’t have prosperity without good health.
Our health is a combination of three things. It’s our biology and genetics. It’s our choices and actions. And it’s the product of the environments we live, grow up and work in. By far the biggest factor in our health is the last. Up to 80% of people’s health is shaped by their environment. As a result, investors have an enormous influence on people’s health through the companies they invest in – companies which can shape the health of their workers, customers and wider society.
Yet health is a blind spot for many investors. Many overlook the impact and potential for positive impact they can have. Health is largely absent from asset managers’ risk assessments and sustainability indices. This even applies to many responsible investors: British American Tobacco was granted the third highest ESG rating in the FTSE 100 by financial market experts Refinitiv in 2021.
At Guy’s and St Thomas’ Foundation, our 1 billion pounds endowment has a dual mandate to drive health equity and achieve attractive financial returns. By prioritising health, investors can help to lay the foundations of a healthier society. Supporting people to enjoy healthier lives helps companies to access a healthier labour market and ultimately boosts their returns. This would add £10 trillion to global GDP by 2040.
Fortunately, positive change is already starting to happen. For example, in 2019 we partnered with ShareAction on the Healthy Markets initiative, an alliance of 35 investors with 7.5 trillion pounds in assets under management, to improve people’s health by increasing access to affordable, healthy food. Today 65% of the UK grocery market has targets to increase the proportion of their portfolios from healthier foods. And global manufacturers like Danone and Unilever have committed to report on the healthiness of their sales using government-endorsed definitions, while Premier Foods has gone even further and committed to double its sales of healthier products by 2030.
A number of investors are already taking steps to support the change we need. Legal and General has called for a “H for health” to be included in the ESG approach, while CCLA Investment Management has launched a mental health company benchmark. Investors are engaging companies to help them improve the healthiness of their products, pay a living wage, and offer employees secure contracts, flexible hours and sick pay. These are just some instances of what prioritising health looks like – but they are still too few and far between. We must all do more.
To help investors understand how to build healthier economies, Guy’s and St Thomas’ Foundation has partnered with ShareAction, the Health Foundation and a growing group of responsible investors on the Long-term Investors in People’s Health global alliance. This is a new and ambitious initiative to help investors prioritise health. It will demonstrate leadership on health, shape guidance and best practice, drive policy conversations and influence better reporting of data.
Good health is an asset to society and the economy. Now is the time for people’s health to become embedded in investment policies. A clear commitment to investing in a healthier society should be the aim of all forward-thinking investors.