In the evolving realm of corporate responsibility, the integration of health considerations into ESG frameworks is gaining momentum. Dr Chris Edmond, Medical Director of WorkHealth Jersey, offers valuable insights into why embedding health into ESG could redefine sustainable business practices.
Environmental, social, and governance (ESG) factors are undeniably important drivers of business performance and value creation. But in today’s world, where health and wellbeing are increasingly under threat, it’s time to ask: should ESG become ESHG?
I’d argue that there’s also a role for adding an ‘H’ to ESG to specifically recognise businesses’ role in the health of their employees, customers, and communities.
The Marmot Report on Business Health Equity, published in 2020, best outlines the case for adding health to ESG. This report, led by Professor Sit Michael Marmot, is a landmark study examining the impact of business practices on health inequalities in the UK. It belongs on the reading list of every business leader who wants to truly make an impact.
The report identifies six domains of action for businesses to improve health equity:
- Employment and working conditions
- Income and wealth
- Education and skills
- Community and environment
- Products and services
- Governance and accountability.
The report also provides a framework and toolkit for businesses to measure and improve their health equity performance based on the principles of ESG reporting.
Key findings
High ESG performance linked to health benefits
There’s a strong correlation between health and ESG performance, with higher ESG scores associated with lower rates of mortality, morbidity, and disability. This means that businesses that care about their ESG impact are also likely to care about the health of their stakeholders and the wider population.
Business policies have a dual impact on health and wellbeing
Businesses can positively or negatively impact health, depending on their policies and practices concerning their people, customers, suppliers, and communities. For example, companies that offer fair wages, flexible working hours, health and safety measures, and training and development opportunities can improve the health and wellbeing of their workers.
On the other hand, businesses that exploit their workers, expose them to hazardous conditions, or discriminate against them can harm their health and wellbeing. The role of professional occupational health advice should also not be underestimated if you want to understand the impact your business has on your people’s health.
Investing in health equity has benefits for business
Organisations that invest in health equity can benefit from improved productivity, innovation, loyalty, reputation, and resilience. By promoting the health and wellbeing of their stakeholders, businesses enhance their human capital, creativity, customer satisfaction, brand image, and risk management.
Higher risks for businesses who neglect health equity
Businesses that neglect health equity can face increased risks of litigation, regulation, boycotts, and divestment. By ignoring the health and wellbeing of their stakeholders, businesses expose themselves to legal, regulatory, reputational, and financial challenges. For instance, companies that violate human rights, damage the environment, or produce harmful products or services can face lawsuits, fines, sanctions, or bans.
ESG and health are closely intertwined, and it makes sense to add an ‘H’ into ESG.
By adopting a health equity lens and aligning ESG strategies with the recommendations of the Marmot Report, businesses can not only enhance their financial performance and reputation but also contribute to the wellbeing of their stakeholders and the wider society.
