Health is an asset - and it needs long-term investment

When it comes to the public debate around health, we tend to think of one side of the ledger — costs. But there’s another side, too. Health is an asset. It’s created by good living and working conditions. By investing in it we create huge value for the economy, society and each of us in our daily lives.

And if health is an investment, it needs long-term investors. Right now, more than £3 trillion is invested through UK pensions alone — more than 20 times what we spend on the NHS each year. This is all our money and it can have a profound influence on our health.

At the moment, though, it’s doing too little to support it.

The investment case is strong. Long-term and institutional investors are particularly exposed to the effects of poor health. It plays out in workforce shortages, rising healthcare costs and high-profile reputational risks, all of which impact the bottom line. It’s also good business; while 97% of consumers say health is important to them, only 12% feel like they are achieving it.

The very best place to start would be by investing in healthier food environments. This is both achievable and urgent. Poor diets are one of the largest causes of ill-health globally. They are disproportionately experienced by the most vulnerable. More than 70% of all those admitted to hospital with COVID-19 are overweight or obese.

Our diets are predominantly shaped by the food options available to us — and in the UK, that’s mostly from supermarkets. Two in every three pounds we spend on food goes to them. Not only do they dominate food sales but also the production of it. Over half of the UK grocery market comprises these supermarkets’ own brand products.

Walk around any supermarket, and high-sugar, high-fat and processed foods are far too often in the spotlight. Unhealthy options are heavily marketed and promotions centre around them. Healthier food options get lost in the background or are pushed entirely offstage. Families are frequently left unable to afford – or even find – better alternatives.

But of course, retailers are just responding to the incentives given to them. We need to change these if we expect supermarkets to provide healthier ranges.

One step is ensuring coherent and robust rules of the game. The government implementing its own childhood obesity strategies in full would be a good place to start in the Prime Minister’s upcoming drive on obesity. Initiatives such as the soft drinks industry levy show how well-targeted policy encourages healthy competition through accelerating innovation and levelling up the playing field. Another – equally important – step is to look at who actually owns these retailers. Well over half their shares sit with institutional investors, and this puts the latter in a position to demand more. Indeed, the very fact that the majority of decisions on food in the UK sit with such a small group of companies means rapid change is possible.

Fortunately we know what this progress looks like. The key insight is that everybody needs to move at once.

Over the past year, through the Collaboration for Healthier Lives, more than 200 stores — including Tescos, Sainsbury’s and the Co-Op — have been testing ways to create healthier food environments. They have done practical things like putting up clearer signage, promoting fruit and vegetables, increasing the availability of lower-calorie snacks, and moving healthier cereals to eye level. Till receipts show healthier customer baskets and no real impact on store profitability.

At the same time, although most supermarkets are doing something to encourage healthier diets, the level of disclosure is very poor, and progress difficult to track. No supermarket reports on more than 40% of the most common indicators on nutrition and health. That means investors haven’t been asking the right questions. But there are encouraging signs here too. A coalition of investors with over $1 trillion of assets have come behind ShareAction’s Healthy Markets campaign to accelerate retailer transparency and action.

In the push for climate sustainability, we have seen that it is not just companies, but also those that invest in them, who can create change. The same applies for the public’s health. At a moment where we’re aware how much all our health depends on one another, it’s time for investors to step up too.