Companies Reporting on Employee Health: Gamble or Good Risk Management?

January 22, 2016 Shahnaz Radjy and Derek Yach

Fifteen years ago, companies would never have believed it would become common practice for them to track and publicly report on their water use, energy efficiency, and carbon footprint. It did. Today, with sessions at the World Economic Forum Annual Meeting in Davos on “Health is the Bottom Line” and recognition that human capital is a company’s greatest asset, the question should not be whether corporate reporting should include employee health and well-being, but how.

An immediate reaction many have to this concept is a concern for data and privacy. What if companies start discriminating, hiring younger, healthier people and firing anyone with a body mass index (BMI) outside what is considered a healthy range? What if a whole company moves out of a community who needs the business as part of its social structure, to relocate in a healthier county?

These are all valid questions and have to be addressed. But they are also a distraction from the huge potential positive impact that companies reporting on health could have. The focus should be the role of the private sector to improve employee health. Not in a big brother kind of way, but simply because most individuals spend a majority of their time at the workplace, and many workplace health and well-being programs extend to families and sometimes even the community.

For companies, there are myriad arguments why they should – responsibly – invest in employee health and well-being within their human capital management best practices:

  • A high number of people currently work in a nonmanufacturing environment and risks faced by blue collar workers have evolved from merely safety (injuries and death rates) to chronic diseases such as obesity and diabetes
  • Employee health and well-being are strong determinants of productivity, morale, and retention
  • Links have been found between best-in-class workplace health programs and improved stock performance

A company should also consider the impact it has on the health of its consumers, through the products and services it generates. These should not only not harm health, but ideally enhance it. Every sector has a role to play in better health and the opportunity to be part of the solution.

The report launched today, “Reporting on Health: A Roadmap for Investors, Companies, and Reporting Platforms,” calls for companies to report on health; for boards of directors to ask about health as part of how they manage risks that are material to their bottom line; and for investors and shareholders to consider a company’s culture of health (or lack thereof) as part of their due diligence.

It is time to learn from the environmental movement, and put health on the map as a proxy for good governance.

Source of thumbnail image: Richard Nilsen

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