Why ESG must include health equity
The convergence of three major issues could make long-standing health inequities even more severe. More than two years after the pandemic emerged, COVID-19 and global migration emergencies continue to impact society. At the same time, the health of the planet is deteriorating, and trust in our most established institutions is eroding. These developments have disproportionately affected people who have been historically marginalized and who suffer from poorer health overall than other parts of the population because of structural flaws and bias.
The Global Health Equity Network (GHEN) was launched in September 2021 at the World Economic Forum out of the imperative for private organizations, civil society, and governments across the globe and in every industry to collaborate and address these issues. GHEN has a mandate to shape a healthier and more inclusive world by convening executive leaders across sectors and geographies to commit to prioritizing action towards health equity as core to any organization across industries.
What does health equity look like?
Health equity is an outcome in which every individual has the opportunity to achieve their full potential in all aspects of health and well-being. Today, health inequity pervades every community. It exists between and within countries. Significant health disparities (quantifiable differences in health-related outcomes) have been documented across many dimensions, including race, ethnicity, age, gender, sexual orientation, location, and disability status. It is seen in increasing learning poverty (the percentage of 10-year-olds unable to read and understand a simple text) in low- and middle-income countries, food insecurity that pervades throughout communities, and is exacerbated by climate change and gender inequities that exist in many countries. It is rooted in poverty, illiteracy, unemployment, and social customs.
The consequences of health inequity are severe. As one example, disparities in life expectancy exist across and within countries according to race, gender, and income, among others. Life expectancy in low-income countries is nearly 20 years less than in high-income countries. Health inequity also has a financial impact. Health disparities cost the US $42 billion in lost productivity per year. The European Parliament estimated that health inequities in the European Union cost around 1.4% of GDP every year, almost matching the EU’s defense spending (1.6% of GDP).
What role can business leaders play?
Health-focused leaders and businesses embrace the responsibilities and opportunities to make choices that positively affect the health and well-being of all stakeholders with whom their organizations engage: employees and their families, customers, contractors, suppliers, alliance partners, and broader communities. This can be achieved by designing and executing a strategy that places health equity at the center of the business and operations, and expands across four domains: the organization, its offerings, its community and its ecosystem.
Indeed, many leaders themselves see health and health equity as vital platforms. In a global survey of 42 various cross-industry C-suite executives (CXOs), including World Economic Forum partners, the findings reveal that some business leaders are already considering their role in activating health equity. Half of surveyed business leaders say health equity is a very high priority for their company. Global companies are now launching innovative efforts across industries to address it. As an example, JPMorgan Chase invested $250 billion toward a new health care arm, Morgan Health, which is focused on improving health outcomes for its workforce, investing in health technology companies and promoting health equity. Unilever also has committed to improving the health and living standards of its employees and communities. This includes a program to provide regular physical and mental health checks for employees.
Achieving health equity is not just the right or moral thing to do. All businesses play a role in and are affected by health inequities—and not just those in the health care and life sciences industry. Health inequities strain workforces and productivity, create supply-chain challenges, and have an impact on the way that consumers make purchasing decisions. Health inequities result in trillions of dollars in lost productivity annually. As such, addressing health inequities can help business leaders accomplish their core business goals of improving workforce productivity, increasing market opportunities, fueling economic growth and improving competitive advantage.
Action requires the ability to understand the problem, identify solutions and measure impact. Businesses and their leaders require a shared language to assess, measure and activate health equity. While business leaders are grappling with these societal issues, many businesses are also increasingly focused on environmental, social and governance (ESG) management, measurement and reporting. Many ESG issues have a direct relationship to health equity – and better management, action, investment and performance on ESG-related issues could drive health equity as an outcome. In our survey of 42 cross-industry global CXOs, the top challenges to incorporating health equity in their ESG reporting were: lack of a clear financial business case; and lack of standardized measures.
A global economy should focus on governance, people, planet and prosperity. A healthy planet is necessary for healthy people, who, in turn, are necessary for healthy companies. One person or entity cannot address health equity alone. As we note in our recent Insights Report, embedding health equity measurement and reporting standards in ESG frameworks can create a shared language and approach for business leaders to assess, measure and activate health equity. Indeed, several ESG standards-setting organizations have begun to integrate health equity into their frameworks. Achieving health equity requires leaders to intentionally and deliberately design and build systems that advance it as an outcome. They can start by asking themselves: What’s our health footprint and how are we generating equitable health and well-being? Health equity is everyone’s business.