Elevating human health and well-being across the investment and operation landscape

View the recording of our recent webcast for more on this topic - and register for updates on our complete webcast series dedicated to investing for health.

Investment strategy can be a confounding process. You look at risk, work to understand forecasting and try to evaluate return in the short and long term. As anyone can tell you, the factors with which we evaluate investments are constantly evolving. In the wake of a global health crisis like COVID-19, we’ve seen markets drop, rise within a matter of hours only to recede again faster than an ocean’s tide before a tsunami.

But it isn’t all chaos and random change. Many experts are highlighting and assessing patterns in investments that have implemented a focus on people-first policies, procedures and best practices—especially among real estate. And these investments aren’t just surviving—they’re thriving.

Incorporating a focus on health and wellness through Environmental, Social and Governance (ESG) factors can drive improvement in properties around the world and help transform the market. To examine how these efforts could better inform investment opportunities, Matthew Trowbridge, MD, MPH, associate professor in the Department of Emergency Medicine and Department of Public Health Sciences at the University of Virginia School of Medicine, and his colleague Kelly Worden, MPH, director of health research at the U.S. Green Building Council, have formed the Green Health Partnership (GHP).

“The core question for GHP was how to create a sustainable, scalable market for health within real estate. We thought that we’d be able to learn from the green building movement and hoped it would give us a really interesting model. That particular movement is no longer about regulation—it is a full-fledged market,” Trowbridge says. “I’m happy to say, we’ve been able to take the green building template and examine how we can make health real estate actionable for real world practitioners.”

Through GHP, Trowbridge and Worden have highlighted the importance of intentional business processes and operational policies focused on health. These management processes should focus on responsiveness, resilience, equity and well-being, and they can answer the overarching wellness question for businesses and their investors.

“Investors should be asking about the process a business uses to evaluate well-being. They should be asking how it’s going to address health and what is in place to overcome the next global challenge—whether that’s COVID or something else,” Worden says.

Implementing wellness strategies to improve investment returns
For Angeli Stirbei, vice president of marketing and client relations at Prologis, their company has been working closely with clients to underscore new ways to incorporate health into businesses and minimize the impact of the COVID-19 pandemic.

“Labor, labor and labor. That’s the struggle we continue to hear from our customers. At Prologis, we saw an opportunity to solve that problem. The current turnover cost for our customers is approximately $2 billion per year,” Stirbei says. “It’s a mission critical issue and out of that need is where we developed the Community Workforce Initiative (CWI).”

Stirbei notes that Prologis worked with clients to obtain WELL Certification for many of their buildings. As part of CWI, they improved air quality, lighting and ergonomics while also providing new bike-share options and recreation areas within communities. The outcome was a positive net benefit for their clients and the communities in which these buildings reside.

“These spaces are where people are coming to work everyday, and it really impacts their overall well-being,” Stirbei says. “All of these amenities are being placed with the employees in mind and we’re looking to ensure our clients are able to retain their people, solving that labor problem for them.”

Prologis’ clients are implementing employee-first policies and communities are growing because of it, increasing revenue, bringing in new tax dollars to the area and driving a culture of health. Their efforts are impacting the bottom line in new and novel ways.

Looking beyond the traditional investment strategy
Organizations like the Robert Wood Johnson (RWJ) Foundation are actively committed to funding efforts like GHP, and are looking at ESG investing to define the ways health can inform investment strategy and promote a culture of wellness around the world.

“In many ways, COVID-19 is the moment RWJ has really prepared for. It is the understanding that health really ties to many different sectors: housing, economics, capital markets and more,” Kimberlee Cornett, director of impact investments at RWJ Foundation says. “We’ve been making this connection between health and real estate for nearly a decade and it’s really our moment now. We understand that where your neighbor lives can have a material economic impact on everybody—from the CEO of a Fortune 500 company to the barbershop on the corner.”

Trowbridge stresses the importance of efforts to look at non-traditional, non-financial aspects of investing to better understand the holistic nature of an opportunity.

“We’re out to address externalities. There are things occurring—whether it’s value creation or costs being accrued—that aren’t necessarily captured by the company,” Trowbridge notes. “And thinking about how changes you make impact your communities can make a ton of sense to your business. We’re working with leadership to bring transparency to that process so investors can see and value it in an opportunity.”

In the wake of COVID-19, it’s hopeful that investors, businesses and communities come together to recognize the materiality of health and its effect on the fabric of our economy.

“We’ve really come to realize that there is a growing impact on how the global economy is so connected. Strengthening our own communities, where we live, work and play, and our own ecosystems can improve things for you but also improve our businesses, customers, investors and our returns,” Stirbei stresses.

IWBI is committed to supporting the development of spaces and workplaces focused on human wellness and safety. The WELL Building Standard—a free resource from IWBI—can help guide businesses and other organizations in implementing the processes, policies and strategies necessary to promote health and wellness throughout their institutions.