ESG programs that focus on health help build climate resilience, create financial benefits
August 22, 2023
ESG programs that focus on health help build climate resilience, create financial benefits
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As an epidemiologist, I help companies assess and manage health risks that impact their workers, consumers, and the communities in which they operate. Lately, my work is focused on how health fits into the strategies that companies develop to meet their environmental, social, and governance (ESG) frameworks. And there is a substantial, positive trend here.
I’m finding that if companies look ahead and manage health risks as part of their ESG goals, they can reap immediate and long-term financial benefits. It is not only good for business but good for the health of workers, consumers, and communities.
Too often, companies view public health and health equity as factors that don’t impact a company’s financials. Companies may view health as an optional part of their ESG programs. But by ignoring or not prioritizing health, companies may not be capturing the full spectrum of risks and opportunities on the horizon.
In recent years, the private sector has had significant impacts on public health, well-being, and health equity, as witnessed during the COVID-19 pandemic.
At Stantec, our ESG advisory team is often asked to develop strategies that consider emerging risks and challenges to our clients’ companies. Climate change and the energy transition are two of those challenges. We should also consider public health and health equity as we address those challenges.
In recent years, we’ve witnessed the private sector’s impact on public health, well-being, and health equity. We saw that role come into sharp focus during the COVID-19 pandemic and it has continued through ongoing supply chain issues, community health crises, and social unrest.
Let’s look more closely at how health can be an important consideration in your company’s ESG program.
Climate change’s impact on health and health’s impact on business resilience
A growing number of companies are embracing ESG programs to improve business value and climate resilience. This strategy can align with stakeholder priorities and increase investor confidence. It can also improve worker retention, recruitment, and productivity.
Companies should also consider how climate change impacts health. Climate change has serious effects on public health and peoples’ well-being directly (e.g., extreme heat, drought, and wildfire) and indirectly (e.g., increasing vector- and water-borne diseases, harmful impacts on mental health). In turn, these heath impacts can reduce business resilience. This is why we advise clients to consider a fuller range of ways to address climate change by putting health risks within an ESG risk framework.
Pakistan’s massive flooding displaced millions of people and disrupted supply chains around the world.
For example, extreme weather has caused flooding that is ever more disrupting global supply chains. In summer 2022, torrential monsoon rains left one-third of Pakistan under water. Millions of Pakistanis were forced from their homes and went without clean water and food. Stagnant water led to more mosquitoes, causing an increase in the Dengue virus. And the impacts were felt beyond Pakistan. The flood waters wiped out 15 percent of Pakistan’s rice crops and 40 percent of the country’s cotton crops. It temporarily disrupted food and apparel supply chains around the world.
Pakistan’s flooding is an example of how a single event affects supply chains, people, and companies on a global scale. Companies are wise to consider how climate change can impact the health and well-being of the people who are the foundation of their supply chains. If companies invest in the resilience of the communities where they operate, they can protect both the financial health of their business and the health of their stakeholders.
In recent years, we’ve witnessed the private sector’s impact on public health, well-being, and health equity.
Consider worker health on the journey toward a low-carbon economy
As we move toward a low-carbon economy, we also need to consider public health risks and impacts that are part of that transition.
For example, US companies that are making clean-energy products can benefit from anticipating, monitoring, and mitigating health hazards associated with new processes or products needed for the energy transition. Innovations may spur regulators to pay greater scrutiny to companies out of concern for worker, consumer, and community health. Companies can help themselves by investing in scientific solutions to fill data gaps linked with new processes and products. Such efforts can protect stakeholder health. It also informs regulatory, legal, and business decisions.
We have seen companies benefit from including health considerations in their ESG programs. By managing health risks from new technologies and products, companies can reduce regulatory and legal issues. They also preserve their social license to operate.
Putting the H in ESG in practice
Companies can start managing health risks by defining what is material to their stakeholders and communities. That means deciding what health issues have the greatest potential impact on the financial performance. It also means looking at what can affect the health and well-being of workers, consumers, and the communities in which a company operates.
Companies that include health in their ESG programs can reap business benefits, as well as positively impact communities, workers, and consumers.
At Stantec, we partner with companies to address priority health issues and impacts. We do it in a way that fits their needs, including:
- Integrating health, well-being, and equity into ESG performance targets, reporting, and operational risk registers.
- Conducting health and equity impact assessments.
- Conducting environmental and human health risk assessments.
- Performing exposure assessments and modeling.
- Providing comprehensive job-related health program design and support.
- Designing medical surveillance programs. And performing epidemiological studies.
- Providing product stewardship program design and support.
We have learned that innovative, yet practical, solutions are integral in helping communities plan for climate change. Protecting public health and putting a focus on health equity as part of that practical approach allows companies to contribute to social value, economic opportunity, and a sense of place and well-being.