The idea behind sustainable and responsible investing is to invest in companies that reward shareholders with strong financial returns as well as deliver positive environmental, social and economic impacts. Beyond explicit sustainable investing, more and more stakeholders are expecting companies to marry purpose with profits and to do more good for society.
When it comes to the betterment of human health, such as raising the state of physical, mental and social well-being, this responsibility looms large, and the inputs, outputs, and impacts may be difficult to pin down.
Until now, this challenge has been met by accounting for social impacts in buckets of negligence or malpractice, such as human rights violations, occupational injury and illness, child labor, slavery, and the like. As such, the business case for well-being translates into avoiding reputational risks and ensuring that legal and regulatory requirements are met.
In this pursuit of simplicity we miss the forest for the trees. We effectively skip over all the “good things” that human well-being generates, like mastery, autonomy, purpose, good health, safety, security, trust, and belonging.
Moreover, well-being is greater than the sum of its parts. Well-being is a true reflection of a system that operates in a sustainable and healthy way: a business system that places well-being as central to its purpose, products, people, and the planet; that commits to developing human potential with opportunities for learning, progress, and collaboration; and that builds resilience for an evolving dynamic system by deliberately elevating the absorptive and adaptive capacity of individuals. In sum, we may appreciate and generate thriving if we value these things as much as, or more than, grievances or violations attached to various business activities.
Measuring the Forest
Now is the time to focus on the forest—the positive impacts on well-being that businesses consciously create. This pivot in attention could be the engine that drives social impact, the economy and civic engagement. If this is so, how do we measure it?
Researchers in the SHINE program at the Harvard Center for Health and the Global Environment have been busy working with companies to measure their well-being handprint — changes that companies cause to happen beyond doing business as usual.
Working with Johnson & Johnson, a participant with SHINE, our researchers have developed well-being metrics that connect the dots between the internal business operating environment, well-being (engagement) and performance (productivity). SHINE is using these measures to survey employees and take a pulse on the culture of well-being within the company and its effects on the business.
For companies motivated by measuring improvements in well-being, such as Owens Corning, these proof points may help to set priorities and align strategy. At EYP Architecture and Engineering, these metrics may translate into environmental features or building designs that improve human well-being. For Levi Strauss & Co, the idea of measuring well-being in the supply chain is tantamount to making the communities in which they operate thriving and healthy places to live and work.
Every June, these companies and others come together at the SHINE Summit to learn and share the science and business of handprint accounting—how companies measure positive environmental and well-being impacts—and to cheer on the race to the top organized by a NetPositive strategy, a deliberate intention to do more good than harm in the world. Altogether, this is a collective system for thriving.
In a recent book review, Peter Senge wondered: “What if growing our people was the true strategic core of the enterprise?” In the same vein, I wonder whether maximizing human capital is fundamental to sustaining all other capital resources (see Capitals, a report by the International Integrated Reporting Council that explains how 6 capitals of business—financial, manufactured, intellectual, human, social and relationship, and natural—are affected and transformed by the activities and outputs of an organization).
If human potential is core to the sustainable future of business, can well-being metrics capture the business impact? Research on well-being would say so. A recent study by Alex Edmans examined companies from the annual “100 Best Companies to Work For” list published by Great Place to Work Institute and found that the profitability of companies that valued and developed their employees outpaced the sector benchmarks.
Studies that have measured well-being, including those inside SHINE companies, have shown that higher levels of employee well-being are associated with better productivity and performance, such as less lost work time or unhealthy days, better engagement, and increased job satisfaction.
While individual improvements in well-being may accumulate to collective impact at the organizational level, the holy grail for the SHINE well-being studies is to “fingerprint” a thriving culture and climate according to its unique features. For stakeholders, including consumers, employees and investors, this global measure of company well-being could be the key to thriving at work and become the gold standard for integrated reporting.
Well-Being: More than Wellness
A sticking point for successfully implementing a well-being strategy that is hard-wired to the business operating system is that well-being is often confused with wellness programming: individual programs that target employee health behaviors such as exercise, smoking, nutrition, health care utilization, etc. Traditional wellness programs often narrow the focus on individual behavior and trade off corporate responsibility for employee responsibility.
The shift to well-being changes the emphasis from what employees should be doing to what companies can be doing to ignite higher order change at the system level. For a well-being strategy, health programming is only one part of the approach. The business goal for well-being is to first invest in human capital rather than to aim to reduce health care costs. Studies have shown that raising employee well-being enables better lifestyle choices that return better health and, ultimately, lower health care costs. At the same time, businesses that invest in growing human capital achieve returns on talent acquisition and retention through operational efficiency, quality, and brand reputation.
Can we agree on measuring, managing and reporting on well-being? SHINE companies believe this idea already has legs and is running through the forest!
Eileen McNeely teaches at Harvard T. H Chan School of Public Health. She is Co-Director of SHINE at the Harvard Center for Health and the Global Environment. SHINE works with companies to test new methods and develop the evidence base for positive impacts on people and the planet. She has extensive experience in health policy and environmental and occupational health.