Investors managing more than US$5.7trn of assets have launched an alliance to finance “healthier and fairer societies”.
The alliance, known as the Long-term Investors in People’s Health, is led by ShareAction, which campaigns for responsible investing. It says that most investors overlook health as an environmental, social and governance (ESG) issue, partly due to a lack of good quality and comprehensive data. A total of 35 institutions have signed up to the initiative.
The move aims to give investors the tools to improve health outcomes for workers, consumers and communities by sharing best practice and creating opportunities to work together on corporate engagement. Investors are asked to commit to embed health into their policies and practices, and to use their influence throughout the investment sector.
Signatories across the UK, the US, Japan and the Netherlands include Legal and General Investment Management, Hermes Investment Management, Mitsubishi UFJ Trust & Banking Corporation, the Local Authority Pension Fund Forum, American Century Investment Management, Guy’s and St Thomas’ Foundation, and the Health Foundation.
According to the McKinsey Global Institute report Prioritizing health: A prescription for prosperity, poor health already costs 15% of global GDP amid widening health inequalities. The cost-of-living crisis is also creating challenges for people’s physical and mental health. Meanwhile, ShareAction’s research report Health: An Untapped Asset – How investors can strengthen returns by improving health outcomes identified significant gaps in investors’ understanding of health and associated risks, as well as opportunities for improvements that could strengthen the resilience of their portfolios.
Two thirds of asset owners surveyed were unaware of options to invest in funds thaqt deliver positive health impact, while three quarters said they receive minimal or no information from fund managers on stewardship for health. Health is also largely absent from asset managers’ risk and ESG assessments and is not routinely captured in sustainability indices.
In addition, companies face tougher regulation on how their products and policies contribute to public health, with more than 50 jurisdictions now imposing sugar taxes, according to the Obesity Evidence Hub.
“Economies depend on healthy populations just as they depend on a stable climate, yet health remains an ESG blind spot for many investors,” said ShareAction chief executive Catherine Howarth. “Health deserves to be at least as well embedded in mainstream investment practice as climate risk.”