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June 17, 2020

Sustainability, Business, and Health

Author Affiliations
  • 1Harvard Business School, Boston, Massachusetts
  • 2Harvard T. H. Chan School of Public Health, Boston, Massachusetts
  • 3Harvard Kennedy School, Cambridge, Massachusetts
JAMA. Published online June 17, 2020. doi:10.1001/jama.2020.8714

The coronavirus disease 2019 (COVID-19) pandemic has demonstrated that response demands involvement from every sector of society. As a major example, some businesses have stepped up in ways previously unimaginable. Garment companies have repurposed production to face masks and other protective equipment. Alcohol distilleries and perfumeries have shifted production to hand sanitizers. Automobile companies, both voluntarily and as compelled by the Defense Production Act, have worked with the ventilator industry to increase production. More broadly, an early analysis estimates that 64% of the US’s 100 largest publicly traded companies have made customer accommodations to COVID-19, including deferred bill payments; 43% have expanded paid sick leave, including, in some cases, for part-time and hourly employees.1 Such positive changes, however, are in contrast to a host of other public concerns, including that future vaccines and therapeutics may not be affordable for much of the world. In the next phase of the crisis, the safe reopening of society will require intense interactions between the health and business sectors to address these and other issues.

These developments reflect an even broader connection between private enterprise and public health that has evolved over recent decades. The United Nations (UN) World Commission on Environment and Development’s 1987 vision of “sustainable global development” defined it as meeting present needs without compromising the ability of future generations to meet their own needs.2 Contending that economic development at the cost of social equity and the environment undermines long-lasting prosperity, this vision served as the foundation for the 2000 UN Millennium Development Goals and the 2015 UN Agenda for Sustainable Development; the latter proposed 17 interrelated sustainable development goals (SDGs) and 169 targets as a shared global blueprint for 2030. The SDGs are achievable only through commitments of all sectors, including private enterprise, and address a vast range of public health issues: communicable (including some epidemic) diseases, noncommunicable diseases, and broader areas critical to human well-being including climate, poverty, working conditions, and cities and communities.

The Sustainability Imperative

Given its long-standing reputation for focusing exclusively on maximizing profit, the private sector may seem an unlikely partner to advance the SDGs. Record profits, increasing stock prices, and governmental support during economic crises, accompanied by the growing global burden of carbon emissions, declining biodiversity, preventable noncommunicable diseases, and rampant social and health inequities, have long fueled widespread public distrust of some highly profitable corporations and some highly compensated chief executive officers (CEOs). Nevertheless, in addition to the current COVID-19 pandemic, other social changes and market forces have also been pushing companies to consider business strategies that further the long-term well-being of employees, consumers, communities, and the environment.2

Recognizing the strategic value of supporting employees, for example, a growing number of companies publicly support raising the federal minimum wage beyond $7.25 per hour, with some major companies (eg, Costco and Target) already paying $15 per hour3; more companies could do so. About 40% of businesses provide paid parental leave benefits for both spouses.4 A changing consumer market in the midst of a global obesity crisis has similarly pushed the food and beverage industry to explore a new generation of healthier products, such as no-sugar seltzer rather than sugary sodas. In addition, since 2010, Unilever (with hand soap included among its products) has leveraged private-public partnerships to scale handwashing efforts to low-income households globally.

Recognizing also that the climate crisis threatens business viability, major automakers, including Ford, BMW, and Honda, have also moved steadily toward hybrid and electric vehicles, even siding with the California Air Resources Board to build more fuel-efficient cars despite federal efforts to roll back emissions standards.5 Sustainability strategies within the technology industry have allowed Intel to obtain 71% of its global energy from renewable sources (100% in the US and European Union) and IBM to recycle 89.5% of its nonhazardous waste.6 Meanwhile, some large businesses, viewing long-term success as linked to the well-being of their communities, are making investments in them. For example, in 2018, United Parcel Service Inc (UPS) spent $2.6 billion for goods and services with small and diverse suppliers as part of their supplier diversity program.7

Extending well beyond traditional philanthropy or corporate social responsibility, an emerging number of business strategies are explicitly designed to create “shared value”2 for both the company and larger society by integrating profit generation with social good. In 2019, the Business Roundtable (comprising 181 of the most prominent CEOs of US companies) upended their 40-year-old governance model of shareholder primacy by broadening their definition of corporate purpose to include a wider array of stakeholders, including employees, suppliers, and communities.8 However, the announcement has triggered mixed reactions—skeptics view it as “health-washing” (ie, talk without action), while proponents maintain that focusing goals on selected social and environmental issues “material” (ie, fundamental) to core mission and operations can create a competitive advantage.9 Resolving this debate will require close tracking of how business strategies can affect progress toward health equity and other SDGs.

Aligning Reporting, Metrics, and Investment

Innovative approaches to measuring and aligning metrics related to sustainability and business performance, such as those that extend beyond the limited standard profit-and-loss statements required by regulators for nearly a century,9 could spur future investment. A major breakthrough occurred after public right-to-know demands prompted more transparent reporting of nonfinancial environment, social, and governance (ESG) metrics, now publicly accessible through prominent frameworks including the Global Reporting Initiative (comprising nearly 80% of the world’s largest 250 companies); the UN Sustainable Stock Exchanges initiative (comprising 85 stock exchanges including NASDAQ)9; and the US-based Sustainability Accounting Standards Board.9 Environment, social, and governance reporting has facilitated global sustainable investments, including the UN’s first-ever exchange-traded fund to encourage socially conscious investors to support the SDGs.

Conversely, neglecting ESG-relevant matters has triggered declining company reputations, massive corporate fines, and CEO firings and resignations. The 2010 BP Deepwater Horizon oil spill prompted CEO Tony Hayward to resign after reputedly minimizing the crisis. Travis Kalanick stepped down as CEO of Uber after employees and customers cited safety, rights, and well-being concerns. JUUL’s CEO Kevin Burns resigned over reported controversy about the company’s contributions to youth vaping, prompting lawsuits and plummeting market capitalization. As a message to business leaders, the UN Global Compact, the world’s largest business sustainability effort with nearly 9500 companies (focusing on themes including human rights, environment, and anti-corruption), recommends aligning their ESG reporting with the SDGs.2

Evolving efforts for integrated reporting, eg, consolidating both social and financial performance into a single annual report, could further align business and health. Accounting procedures succinctly capturing inherently heterogeneous ESG metrics through a common language could facilitate “apples-to-apples” comparisons.9 Such “impact-weighted accounts,” analogous to health impact assessments long used by the World Health Organization and the Centers for Disease Control and Prevention, are already underway for water consumption and particulate emissions and could deter health-washing by measuring and monetizing health benefits—eg, adjusting profit-generating ability by health outcomes using valuation coefficients as multipliers (or offsets). For example, treating resources for employee well-being (eg, healthy food, stress management services) as assets, not costs, could also more accurately reflect the financial benefits of long-term sustainability.

The Global Steering Group for Impact Investment, an independent group of 32 countries and the European Union, is one of several groups exploring how impact-weighted accounts might guide companies interested in generating social benefits, environmental benefits, or both while delivering financial return. Such work advances the 2006 UN Principles for Responsible Investment, which, with about 2700 signatories, aligns investors with SDGs and recommends actions for incorporating ESG issues into investment analyses.9

Conclusions

COVID-19 has made clear the global interdependence of health and business. Improving public health must involve more than governments and nonprofit organizations alone. The SDGs and related sustainability strategies, by focusing on material ESG issues and integrated reporting strategies, can serve to align business interests with health as part of pandemic recovery and beyond. The public will continue to have a critical role in judging specific business actions and using its purchasing power to influence company decisions. Meanwhile, how much the business community will contribute to realizing global health goals remains a matter of great debate. Ultimately it will depend on how well public health and private enterprise can together overcome long-standing barriers to advance the future of the planet and its people.

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Article Information

Corresponding Author: Howard K. Koh, MD, MPH, Harvard T. H. Chan School of Public Health, 677 Huntington Ave, Kresge 401, Boston, MA 02115 (hkoh@hsph.harvard.edu).

Published Online: June 17, 2020. doi:10.1001/jama.2020.8714

Conflict of Interest Disclosures: Dr Serafeim reported being the faculty lead of the Impact-Weighted Accounts Project at Harvard Business School, of which GSG Impact Investment is a collaborator; its chair is also the chair of the Impact-Weighted Accounts Project. Dr Serafeim’s additional relationships are described online. No other disclosures were reported.

Funding/Support: Dr Serafeim receives financial support from the Division of Faculty Research and Development of Harvard Business School. Faculty grant support for Dr Koh is provided in part by the Templeton Foundation (award 61075); the Robert Wood Johnson Foundation (award 74275); the Harvard Catalyst Community Engagement Program, Harvard Clinical and Translation Science Center (award UL1TR002541); and the JPB Foundation (award 1085).

Role of the Funder/Sponsor: The funders had no role in the preparation, review, or approval of the manuscript or the decision to submit the manuscript for publication.

Disclaimer: The opinions expressed in this article represent the personal views of the authors and not those of their employers or those of any faculty grant funder. Any reference to a business, product, or service does not represent endorsement.

Additional Contributions: We are grateful to Chelsea Heberlein, BS, Kirk Vanda, MBA, Leila Roumani, DMD, MPH, Jack Spengler, PhD, Wendy Purcell, PhD, and Eileen McNeely, PhD, NP, of the Harvard T. H. Chan School of Public Health, and to T. Robert Zochowski III, MBA, of the Harvard Business School, for their comments on the manuscript. No compensation was received.

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