Health Metrics and Corporate Reporting on Employee Health Remains Frozen in Time
A significant percentage of non-communicable diseases (NCDs) such as cardiovascular and chronic respiratory diseases, type 2 diabetes, and some cancers and mental illnesses can be prevented by addressing key lifestyle changes: tobacco use, exercise, diet, and alcohol consumption. Corporate America knows prevention makes good business sense in terms of healthcare costs, employee productivity, staff retention, and recruitment, and many companies are working to address these issues through workplace health promotion and disease prevention programs. A critical piece of research carried out by Fabius and colleagues further showed that businesses that foster a culture of health outperform the market, so investors could and should also be using related information to make investment decisions.
However, despite the importance of health metrics both to businesses and investors, there remains a lack of health metrics in public reporting. Currently, reporting of employee health within corporations mainly focuses on issues related to occupational safety and health (OSH). While OSH reporting is ethically important and crucial to a business’ financial bottom line, it is not the only aspect of employee health that should be reported.
Global organizations such as the Global Reporting Initiative (GRI), International Integrated Reporting Council (IIRC), and the UN Global Compact have developed highly influential reporting frameworks to stimulate greater reporting of sustainability metrics alongside financial metrics across the globe. Their efforts have shown great success in promoting the reporting of environmental and social aspects of businesses. These organizations work alongside ongoing efforts at a national level in the US, including US SIF and the Sustainability Accounting Standards Board (SASB) who have made significant progress in advocating for and better defining environmental, social, and governance (ESG) disclosure within Securities and Exchange Commission (SEC) reporting. In addition, indices such as the Dow Jones Sustainability Index (DJSI) have shed critical light on what companies are and are not doing in this space.
However, to date, this dramatic progress in corporate reporting has not included the broader and evolving health issues of employee populations, despite increasing evidence of the material impact of these on the lives of working-age Americans and on the financial bottom line.
It is critical that CEOs of businesses take a leadership position in acknowledging the importance of the health of their workforce through public reporting. The recent American Heart Association (AHA) CEO roundtable meeting highlighted the number of CEOs who strongly support health improvement of employee populations within their organizations. We need to build on such momentum.
It is also vital that investors consider health as a key indicator in financial decision making. We are seeing a sea change in the type of sustainability data taken into consideration by investors in their decision making and need to capitalize on this to ensure that health is incorporated. Finally, reporting organizations, both at the national and international level need to incorporate broader health issues into their reporting frameworks. The appointment of ex-NYC Mayor Bloomberg, who showed strong support for prevention in his work for NYC, to the helm of SASB may be a highly positive move in this direction. To quote his recent Financial Times article and build on it financial statements are an incomplete picture of a companys health, and a companys health is defined by the health of its employees.
In the past 40 years, OSH reporting has significantly contributed to over 65% reduction in occupational injuries, national regulation of OSH and coordination of OSH research, and placing OSH at the heart of healthcare planning. Reporting on health beyond OSH offers a chance for the broader health issues at stake in the US to receive similar focus.
Incorporating health metrics into corporate reporting is vital, which is why it was one of the five key recommendations issued by the Vitality Institutes Commission in June 2014. The Vitality Institute is convening a working group to discuss these issues, define metrics and pilot them over the course of the next 18 months. Members include: Ron Goetzel, Nico Pronk, Ray Fabius, Humana, Novo Nordisk, Allegacy Federal Credit Union and the Robert Wood Johnson Foundation among others. To find out more, contact email@example.com.