Putting The H In ESG: How WELL Achievements Can Help Companies Improve Employee Well-Being And Their Bottom Line
There was a time when the hallmark of a successful business was simply having strong finances. Now a company is defined not only by how much capital it raises but by how it demonstrates its commitment to mitigating risk and supporting sustainability and social causes. And it isn’t just the general public that judges companies based on this barometer, but investors as well.
Environmental, social and corporate governance, or ESG, are the three broad categories that more and more investors are taking into account before choosing to invest with a company. This concept is becoming more mainstream. Studies show that better ESG performance correlates with improved economic performance, and more than 70% of millennials use ESG factors to guide their investment decisions.
It is becoming clear that prioritizing ESG initiatives can add significant value to a business. But as companies are evaluating their ESG strategies, there is one important letter they shouldn't forget: H.
“There is an H missing from the term ESG, and it stands for health, and increasingly we’re seeing how it may be one of the most important factors of them all,” said Dr. Matthew Trowbridge, chief medical officer at the International WELL Building Institute. “Until recently, health and well-being had been overlooked in various ESG frameworks, but it’s now front and center, and those companies making it a priority are not only supporting employee health but impacting their bottom line.”
Trowbridge said that organizational management of human and social capital components, such as employee health and well-being, is emerging as an important yet underdeveloped component of sustainable investing frameworks. In 2019, to help organizations put the H in ESG, IWBI launched its Investing for Health initiative, an effort focused on driving change across the investment landscape by demonstrating to investors and companies alike how health and organizational performance are intrinsically linked.
“We know that human health, safety and well-being are material to businesses’ bottom line, and human-centered policy interventions are critical to improving employee health, engagement and productivity,” IWBI President and CEO Rachel Hodgdon said. “These actions also resonate with investors, which is helping accelerate how we elevate health in ESG and spur more investment in the well-being, safety and equitable practices that can benefit employees around the country.”
Studies have shown that physical and mental health problems significantly impact worker productivity, and lost productivity costs can be 2.3 times higher than even the medical and pharmacy costs businesses take on. Additionally, workplaces that successfully demonstrate concern over employee well-being through wellness policies and environmental enhancements demonstrate higher morale and lower turnover rates.
IWBI provides companies with the tools they need to boost employee health and well-being while meeting their ESG goals.
“Organizations across the globe strive to obtain WELL certification, which shows their tenants and the community as a whole their commitment to delivering spaces that can enhance human health and well-being,” Trowbridge said. “Now, we’re showing companies how achieving that certification will help them show their commitment to ESG.”
IWBI offers several resources to guide companies in implementing health and well-being strategies across their ESG road map. These include the WELL + ESG reporting guide and the 12 Competencies, a research-based framework organized across five scales of impact — individual, organizational, environmental, community and global. The framework is designed to help organizations see how health and well-being strategies can help drive their culture and business strategy and support aspects of their reporting on human and social capital.
“Transparently integrating health into sustainability goals requires the development of a clear reporting and measuring process,” Trowbridge said. “IWBI provides the resources to help companies do that.”
Integration of WELL Building Standard strategies into annual reporting can take shape in many ways. In its 2020 Environmental, Social and Governance Report, Citigroup cited its achievements in WELL as a component of its sustainability strategy, noting the importance of employee well-being and how buildings play a central role. The organization received WELL certification at the silver level at two global properties. Meanwhile, Uber referenced WELL in the diversity, equity and inclusion section of its 2020 ESG Report. Noting the importance of health and well-being, the company mentioned the close to 3M SF of offices applying WELL strategies.
Several other organizations are already referencing their application of WELL strategies in their ESG and sustainability reporting, including Goldman Sachs, Cushman & Wakefield and Champion REIT. Trowbridge added that WELL features are aligned with other ESG and sustainability frameworks, including the United Nations Sustainable Development Goals, the Global Real Estate Sustainability Benchmark and the Global Reporting Initiative.
IWBI is developing new ratings, including the WELL Performance Rating, recently released, and the forthcoming WELL Equity Rating, which will further help companies address the health, safety and well-being of their staff.
“Developing effective initiatives that incorporate employee health and wellness in ESG initiatives is not a simple task,” Trowbridge said. “But IWBI can provide the framework to assist companies in meeting their health and well-being goals.”
This article was produced in collaboration between IWBI and Studio B. Bisnow news staff was not involved in the production of this content.
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