The financial capital markets may be an unexpected collaborator in advancing the goals of public health and development. Recent statistics demonstrate that $8.7 trillion of assets are managed by sustainable, responsible, and impact (SRI) investing. Environmental, social, and governance (ESG) reporting is among the emerging criteria for impact investments.
While ESG investing continues to gather traction within the financial markets, various indicators remain underrepresented within ESG investing frameworks. In particular, health metrics remain neglected within ESG reporting despite being central to financial materiality. Companies impact health in the workplace (through employees), marketplace (through core products and services), and community (through community health investments). Why should a company not be disclosing how they address health in these three areas?
Companies are also starting to realize that they must be behind advocating for better health. The CEO of Hootsuite, Ryan Holmes, has proposed three ways companies can create a culture of health:
- If you build it, they will exercise – gyms, fitness classes and showers at work.
- The company that sweats together, stays together – fostering a culture of fitness.
- Help managers understand the benefits of exercise … to the bottom-line.
Overall, companies are realizing the imperative to create shared value in health. A selection of leading insurance companies are working together to pioneer “Shared Value Insurance,” an approach in which the insurer gains financially while addressing societal challenges. Vitality’s insurance partner network is collaborating with FSG on this.
It is increasingly clear that non-financial measures are material to a company’s overall financial performance. For ESG to have the desired impact, health metrics must be integrated into the core functioning of business in the workplace, marketplace, and community.
This post is based on a devex blog post by Akash Goel and Derek Yach on leveraging ESG for business and health. Interested in learning more? Follow Derek Yach @swimdaily or Vitality @VitalityUSA for updates.