ESG Investing

Investing to Address Social Determinants of Health


Health is a complex matter. While individual inputs like diet, exercise, relationships, and stress impact well-being, broader social factors play a considerable role as well.

In its Healthy People 2020 initiative, the US Office for Disease Prevention and Health Promotion says that external factors that may affect health can be summarized as five core social determinants:

  1. Economic stability
  2. Education
  3. Social and community context
  4. Health and healthcare
  5. Neighborhood and built environment

Corresponding with several of the United Nations’ Sustainable Development Goals (SDGs) beyond SDG 3, good health and well-being, the social determinants of health provide a potential framework for investors seeking to make an impact in health.

Exploring the Social Determinants of Health

Given the role social influences play in population health, certain elements naturally overlap. However, distinctions allow for a sharper focus by policymakers, community members, and impact investors alike.

1. Economic Stability

According to Healthy People 2020, economic factors including employment, food insecurity, housing instability, and poverty can influence an individual or community’s health. These elements align with a number of SDGs, including no poverty (SDG 1), zero hunger (SDG 2), decent work and economic growth (SDG 8), and reduced inequalities (SDG 10).

While numerous studies have explored the ties between economic instability and health, the Dartmouth Institute identified three overarching concepts:

  1. Positive economic developments tend to prompt individuals to invest in their health, but negative economic conditions weaken such motivations.
  2. Effective health insurance options must be backed by solid policies.
  3. Economic incentives have proven useful in driving health-related decisions.

2. Education

Well-being can hinge on educational factors at several formative stages of life, from early childhood development to high school graduation and advanced education opportunities. This is one reason SDG 4 calls for quality education.

According to a paper published in the Annual Review of Public Health, lower educational attainment is associated with a greater probability of poor/fair health levels, multimorbidity, and functional limitations. This holds across race and gender variables. Furthermore, the New York Times notes the complex causal relationships between factors like health and the ability to pursue education; education and health literacy; and education, wealth, and health.

3. Social and Community Context

Bolstering health means achieving SDG 16—reduced inequalities—especially in areas like civic participation, discrimination, incarceration, and social cohesion.

Healthy People 2020 cites research that activities such as voting and volunteering help build social capital, which leads to greater opportunities for physical activity and a deeper sense of purpose. Separately, UCLA researchers found that discrimination results in a higher likelihood of stress-related disorders, while incarceration weighs heavily on the health of the entire family of those jailed, according to research published in The Lancet.

4. Health and Healthcare

Unsurprisingly, access to primary care and other health services, along with adequate health literacy, are essential for well-being.

Limited access to healthcare could result in delays or an inability to receive preventive or critical care, as well as preventable hospitalizations, according to Healthy People 2020. The Centers for Disease Control and Prevention (CDC) explains that “limited health literacy” can play a role in many diseases, conditions, and outcomes.

Place-based impact investing programs and social impact bonds can be crafted around a community or region’s unique needs to align with social determinants of health.

5. Neighborhood and Built Environment

According to Healthy People 2020, criminal and violent activity, environmental conditions, housing quality, and access to healthier foods all factor into community health. This final social determinant overlaps in part with SDG 11, sustainable cities and communities.

More directly, the Oregon Health Study found that the proximity of a grocery store or fast food outlet affected body mass index readings. Separately, the CDC’s Built Environment and Health Initiative aimed to increase physical activity through transportation alternatives in order to reduce risks for diabetes, high blood pressure, and other health issues. Meanwhile, other concerns like toxins and pollutants in physical structures and the fear of crime have been viewed as detrimental to health.

Social Determinants of Health as an Investing Lens

Health investments targeting the five social determinants vary widely in size and scope. To draw a connection between the SDGs and “real-world impact investment opportunities,” the Principles for Responsible Investment developed an Impact Investing Market Map, which highlights a number of ways to invest in social factors that affect health:

  • Investing in municipal bonds, cooperatives, and social enterprises focused on affordable, social, and public housing options, including specialized housing for students and the elderly.
  • Financing equal access to education opportunities at all levels for all populations, along with investing in educational facilities and teacher training.
  • Investing in laboratories, pharmaceutical companies, and health clinics and facilities that provide safe and affordable access to quality health services.
  • Backing entities that practice inclusive finance, including microfinance institutions and firms that provide financial services to small- and medium-sized enterprises.

Additionally, place-based impact investing programs and social impact bonds can be crafted around the unique needs of a community or region to align with social determinants of health.

Ultimately, by using the social determinants of health to target specific, measurable outcomes, investors can practice the Global Impact Investing Network’s first “core characteristic” of impact investing: intentionality.

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