Investment is at the heart of our economy, shaping the world we live today. As this recent study shows, public health interventions offer substantial returns on investment. So, if health has such excellent rates of return, why are investors not queuing-up to finance prevention measures? Vast resources ‘float around’ global financial markets, how can these be unlocked for better health?
Unleashing finance for disease prevention
Most of the healthy life years lost in Europe can be traced back to a limited number of underlying causes: alcohol and tobacco use, unhealthy diet, lack of physical activity and polluted air. The red thread connecting these risk factors is that their health impact is shaped by business models. Alcohol, tobacco and food are marketed products. Sedentary lifestyles are, among others, linked to increased screen time, the transport environment and working conditions. Exposure to outdoor air pollution is attributable to exhausts from vehicles, industrial activity, energy generation and agriculture. Our living conditions and mental health are also considerably influenced by commercial interests, including availability of good quality housing.
Today’s economic problem is that when private investment decisions are made, public health impacts do not feature in the cost-benefit calculations. Health costs are borne by people and taxpayers, by healthcare budgets, not by the economic agents who inflict them. Without costs to mitigate being allocated to those who cause them, there is little incentive to invest in health-sensitive business models. With that we miss a vital opportunity to deliver more for the economy at large, as well as our collective health and wellbeing.
While this analysis still too often holds true, reality is more complex. Good financial reasons do exist, and increasingly so, for private financers to take health into account. This approach is for instance exemplified by CCLA, UK’s largest fund manager for socially responsible investment. Likewise, certain investments carry considerable long-term risks that are real but may not be well-known yet. The FAIRR Initiative, a $2 trillion international investor coalition, informs investors about the risks and opportunities around protein production and the intensive livestock model. Some companies, like VELUX (known for windows and skylights), have taken the step of explicitly integrating health into their business strategy.
Are these outliers or the forerunners of a new market rationale? Should governments proactively step in to rebalance economic incentives in order to ensure that health-sensitive business models become the more financially attractive ones? Are new financial instruments needed to overcome barriers (e.g. longer payback periods) to public investment for prevention? Can changes in demand pull investors into a more healthy and sustainable direction? Can divestment campaigns, similar to those against fossil fuels, encourage long-term change?