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Health Equity is On the Table. What's on the Menu?

Updated: May 25, 2021

By Ashley Craig


Part 1: The Environmental Impact: We assert that the private sector creates or reinforces the conditions that lead to health disparities through the impact of their operations on the environment.


Well, Earth Day 2021 was definitely one for the record books!

Good: Dozens of companies from Proctor & Gamble to Budweiser are making sustainability commitments. This isn't a new idea, but these kinds of commitments are being made by increasingly more companies. Cool!

Better: President Biden recommitted the U.S. to the Paris Climate Agreement and pledged we will slash greenhouse gas emissions by at least 50% by 2030, less than 9 years from now. We’re good, right? Ummm...not quite!

Bad: UN Secretary-General Antonio Guterres described the planet as “at the verge of the abyss.” Why? Because no one is doing enough, and in particular, not the private sector.


Corporations have contributed heavily to environmental degradation and the resultant impact on public health by creating pollution and generating carbon emissions that are causing climate change and hurting human health. In the United States, health equity and opportunity are inextricably linked. The burdens of disease and poor health are inequitably distributed among groups of people based on whether or not they can afford to avoid the fallout. The disadvantaged are left to suffer exposure that leads to a higher incidence of chronic diseases such as asthma, cancer, heart disease, impaired cognition, autism, eye diseases, and low birth weight. If the private sector were willing to truly put the environment and public health ahead of short-term profit, the positive impact would be significant. As we mentioned in last week’s post, companies are starting to flex their public service muscles by weighing in on issues like voting rights, Diversity Equity & Inclusion (DEI), systemic racism, and even the wealth gap. Just a few weeks ago, NinetytoZero, a partnership between private companies and nonprofits, was launched to reduce the Black to White wealth gap from 90% to zero.


I think it is hard to argue for a better economic system than capitalism. However, as our Matt Miller observed, the system doesn't operate effectively when left unchecked or unchallenged. Over the past four decades, government intervention and control have been intentionally diminished, and corporate influence in politics has increased, reaching an inflection point with the Citizens United decision in 2010. As corporations have gotten stronger, executive pay has grown exponentially (some might say disgracefully), the wealth gap has expanded, the health of Americans has declined, and our environment has suffered greatly. Corporations have led the way to create this mess, and now is the time for them to step up to the health equity table by aggressively addressing climate change, air and plastic pollution, and chemical harm.


Climate Change


Fossil fuel companies have known for over half of a century that climate change is real, is manmade, and is impacting the sustainability of the human race. And big oil companies that manufacture plastic packaging knew their products weren't truly recyclable, yet created entire marketing campaigns around this lie. Now, these oil companies are facing financial risks associated with stranded assets, plastic pollution of land and oceans, and the greenwashing associated with their “circular solutions.” Petrochemical companies are estimated to have $56 billion of US and $400 billion of global plastic production capacity that is at risk of becoming stranded. Investors will undoubtedly begin shying away from businesses with such significant underlying business risks.


Businesses will face adverse effects from climate change. Extreme weather will impact supply chains and investors are demanding that risks are addressed. Continuing to operate a business model with high risk associated with environmental factors is costly and imprudent; however, corporations that address these public health risks sooner will ensure a more stable and lower-risk business model. By reducing and controlling pollution and greenhouse gas emissions, companies can reduce their business risk, reduce their cost of capital, and positively impact public health.


Air Pollution


Air pollution is considered as the major environmental risk factor in the incidence and progression of some diseases such as asthma, lung cancer, ventricular hypertrophy, Alzheimer's and Parkinson's diseases, psychological complications, autism, retinopathy, fetal growth, and low birth weight. Long-term exposure to pollutants can increase the risk of emphysema more than does smoking two packs of cigarettes a day. The burden of this lies largely at the feet of the private sector; as of 2017, only approximately 6% of global CO2 emissions came from the residential sector, while the industry and energy sectors were responsible for approximately 65%. Without regulation, there are no consequences or repercussions for this poisoning of the environment.


Plastics


How prescient was that (in)famous quote “There is a great future in plastics,” from The Graduate? Plastics have quite literally consumed our world. Between 1950 and 2017, 9.2 billion tons of plastic have been produced and most of that is still with us. There is so much plastic in the ocean that a vortex of plastic waste and debris has formed a 7.7 million square mile garbage patch in the Pacific Ocean. However, out of sight is out of mind, right? The patch is so far from any country’s coastline, no nation will take responsibility for or provide adequate funding to clean it up. Plastics pose a massive environmental and public health threat that is amplified because they really never go away. “Plastic pollution is not just an oceans issue. It’s a climate issue and it’s a human health issue,” said Claire Arkin, communications coordinator for the Global Alliance for Incinerator Alternatives, a global network aiming to reduce pollution and eliminate waste incineration. Legal action is bubbling up, including a lawsuit against ten major consumer products companies (including Crystal Geyser Water, The Clorox Company, and others) for “the nuisance created by their plastic packaging, including polluting California waterways with plastic trash and touting products as recyclable when they’re not.” If the plastic industry remains on its current track, it is projected to consume 19% of the world’s carbon budget by 2040. As if that’s not enough, the current emissions rate for plastic production is roughly double that for oil production; shifting from oil to plastic production will most likely worsen the climate change problem.


As much as plastics are polluting our environment, they are also polluting our bodies and our food sources. It is estimated that people around the world consume a credit card’s worth of plastic each week. Plastics are being found in 8 out of 10 babies and even fetuses. Virtually all adults have been found to have phthalates in their bodies. Phthalates are used in food packaging, flooring, wall coverings, and medical devices, and have been linked to reproductive health issues like low sperm count and early onset of puberty in animals. Endocrine-disrupting chemicals, which can be found in plastics, are now linked to a dramatic drop in sperm counts - an adult male today has 50% as much sperm as his grandfather - as well as tanking testosterone levels. Additionally, Bisphenol A, another chemical found in plastics, has been linked to conception problems and causes miscarriages. If this sounds scary, well... it is. Check out Dr. Shanna Swan’s eye-opening book Count Down for more on the plastic scourge.



Plastic production doesn’t just create significant pollution and contribute to climate change, it is also a social justice issue. Because plastic products are made from petrochemicals, manufacturing facilities emit toxic chemicals like trichloroethane, acetone, and benzene into the environment. The chemicals released are considered dangerous to human health and contribute to skin and lung irritation, as well as cardiac arrhythmia and respiratory arrest. Compounding this problem, most plastic manufacturing facilities are in low-income neighborhoods. People who can’t afford to move are forced to live in toxic fumes.


Where Do We Go From Here?


Private industry must stop prioritizing short-term profits and start addressing the problems that the currently popular business model of “shareholder Just capitalism” is worsening by the minute. Companies that score high on ESG (Environmental, Social and Corporate Governance) metrics often outperform their peers in stock performance. Investors are recognizing the role businesses should be taking, and rewarding companies who have the right focus, but not just for their ethical stance. Investors can see where the bottom line is and the savvy money realizes that high ESG means a company is a good bet for profits.


Is there hope for business? We think so. While consumers increasingly distrust businesses to do the right thing, in order to win back consumer trust, companies need to do a better job disclosing the potential problems they are creating, while also explaining how they plan to address them. This includes more complete reporting of all emissions, including supply chain emissions. Increasingly, companies are being asked to make ESG commitments like reducing carbon or investing in offsets. These strategies are critical for companies to move to a stakeholder-focused model. Currently, businesses pretend there are no negative effects, but non-profits, government agencies, and the medical community are revealing the truth, leading to more consumer distrust. Consumers may assume the worst from companies if they don’t expressly know otherwise. Businesses must begin to accept the damage their products have caused. One way to do this is with Extended Producer Responsibility (EPR), which requires companies to be willing to accept the long-term effects of their products or packaging. While plastic packaging may be cheaper in the short run, when a company takes into account the cost of managing the disposal of plastics, other packaging will undoubtedly be considered more cost-effective.


In the event the preceding facts aren’t convincing enough, sustainable equity funds outperformed their traditional peers in 2020. This makes complete sense because who would want to invest in outdated, high-risk business models when you can invest with management teams who can do more than just focus on quarterly profit growth? More forward-thinking companies must join the sustainability bandwagon and change the paradigm for how businesses are run.


Because continuing to do just what we have been doing or paying lip service here and there will keep us on the same path careening toward the abyss.



Next: Part 2, first published on May 17th, 2021. Previous: Introduction, first published May 3.



Photo collage elements courtesy of Markus Spiske and Adam Jaime on Unsplash

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