ESG Club Conference 2022 – Feature
Jessica Attard Programme director (social) ShareAction
Maria Ortino
Global ESG manager LGIM
Thembeka Stemela Dagbo Fund manager M&G Investments
“The pandemic has shone a spotlight on the link between social issues and financial materiality. We are starting to see the S factors rise up the agenda on workers’ rights, the living wage, sick pay, vaccine equity, health and nutrition,” she added.
Resistance is futile Also witnessing a greater focus on the S in ESG since the pan- demic is Maria Ortino, a global ESG manager at Legal & Gen- eral Investment Management (LGIM). “[The pandemic] made it possible, in a sense, for us to focus on social issues more as there was a willingness from our companies and clients to do work on them.” For LGIM, this means looking at issues such as human capital management, income inequality, diversity and health. This last point includes anti-microbial resistance (AMR) and nutrition, which are systemic risks. “LGIM is a universal owner, so we are impacted across multiple sectors,” Ortino said. “In that sense, it becomes relevant to be engaged in pushing our com- panies on those issues.”
AMR is a material issue having caused more than 1 million deaths in 2019, compared to 7 million from Covid in the two years since the outbreak. Fatalities caused by AMR are project- ed to leap to 10 million by 2050, partly due the result of a weak pipeline of new antibiotics coming to market. The World Bank’s worst case scenario sees 3.8% wiped off global GDP at the halfway point of this century due to the im-
pact of AMR. “That is quite significant and is why we need to look at it closely,” Ortino said. Then there is nutrition, with the World Health Organisation estimating back in 2018 that around 40% of adults in the US are obese, while a House of Commons report this year found that 28% of adults in England are obese, as are one in four 11 year olds. “Heart attacks, diabetes and other coronary diseases are linked to obesity and the impact on the economy is signifi- cant,” she said referencing figures of 8% of OECD countries’ health expenditures will be dedicated to treating obesity and re- lated diseases for the next 30 years.
Unhealthy trend ShareAction is also focusing on health, a topic on which Attard announced a worrying trend. Research has found that health is a blind spot for investors. “Portfolios are at greater risk than in- vestors realise,” Attard said. “And they are not always taking the mitigating steps that could reduce their risks from poor health. “Good health is the bedrock of a thriving economy and a pros- perous population,” she added. “We encourage investors to think about health using a three pillars framework, which mir- rors the three climate scopes.”
The first pillar centres on employee health, so it’s the steps companies can take to help their staff stay fit and well. Then there is consumer health, which examines if the products made, sold and marketed by a company are supporting good health. Finally, there is community health, looking at pollution
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