LIPH: the business case

Good health is the bedrock of a thriving society, well performing companies, and a strong and resilient economy. It is generally valued above all else by individuals and was cited the most important SDG by a group of public savers in the UK. Good health is what enables us to live independent and fulfilling lives, as well as contribute productively as workers and be active participants in the economy.

At present, our lives are being cut short; fifteen million working-age people die prematurely around the world each year from non-communicable disease and in some developed countries life expectancy has begun to stall or even fallen for certain demographics for the first time since records began.

The burden of ill-health is not shared equally; in countries like the UK there’s almost a twenty-year difference in healthy life expectancy between people living in the richest and poorest places, and as a result of the pandemic about 100 million people have fallen back into extreme poverty (these adverse impacts are felt hardest by the most vulnerable groups).

Companies, and their investors, have an opportunity to reverse these trends. As much as eighty per cent of people’s health is shaped by their environment – the jobs they do, the things they consume, the places they live. A wide range of companies influence and are impacted by people’s health, which means both the corporate and investment sectors have a critical role to play. We’ve developed the framework below to help investors consider companies health impacts using three scopes, mirroring the approach used for climate disclosures:

These pillars are relevant to SDGs three (good health and wellbeing), ten (reduced inequalities) and eight (decent work and economic growth) in particular, but also underpin others. Prior to a formal launch of the LIPH programme in October 2022, we will work with early investor signatories, academics and others to establish sectors of importance within each of these pillars, as well as a set of metrics which investors can consider when assessing investee companies' health impacts and risks.

Like climate change and biodiversity loss, poor health poses a systemic risk that many investors cannot easily diversify away from. For example, around the world there are now more sugar taxes then there are carbon taxes, creating huge risks to companies over reliant on the sale of unhealthy products. Given corporate disclosure is typically poor on this topic, investors may be exposed to greater financial risk than they recognize.

In the US, poor worker health costs employers $575 billion a year from everything from lost productivity due to worker absence and chronic conditions to injuries leading to workers compensation. The average (and rising) cost of poor health in the US is $3,900 per worker per year. In India where twenty-one of the world’s thirty cities with the worst air pollution can be found, air pollution costs Indian businesses $95bn every year, equivalent to 3 per cent of India’s GDP.

Improving population health gives way to huge opportunity as the link between health and economic prosperity runs both ways. Better health boosts economic development through increased worker productivity and lower health-related costs which can create a drag on the economy.

A stronger, and importantly, more equal economy can ensure more families are able to access the things they need to stay healthy and to thrive. For example, better health could add US$12 trillion to global GDP in 2040, representing an eight percent boost to the economy.

If your organisation wishes to join the LIPH signatory group, you should:

• Agree to the principles;
• Complete a short survey which we will send, including asking for a key contact or contacts at your organisation for us to liaise with on matters relating to the programme;
• Agree to allow ShareAction to publish your organisation's name and logo on our website.