Impact investing: companies providing health and wellness products and services can make a positive impact on people in emerging markets.

Impact investing incorporates dual goals of generating positive contributions to society and the planet, as well as attractive financial returns. We believe this is achieved by investing in the shares of companies which, as well as financial promise, also demonstrate intent to positively impact the people and environments in which they operate.

There is a natural desire for ongoing improvement in healthcare products and services globally. Sadly, many parts of the emerging world still lack basic but essential healthcare products and services that are often taken for granted in developed countries.

This means that for emerging market (EM) impact investors, health and wellness is a theme which can make a significant contribution to people’s lives.

Why health and wellness is needed in emerging markets
Healthcare outcomes in EM fall far short of those in developed markets. This is largely due to issues surrounding access to essential medicines and therapeutics, clean water and sanitisation, and in many cases education.


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A report from UNICEF showed that the under-five mortality rate in the world’s least developed countries was 63 per 1,000 live births in 2019. This number compares to an equivalent figure of five in Europe and six in North America.

According to the United Nations, more than 6 million children under the age of 15 are estimated to have died in 2018, the majority from preventable diseases. WaterAid estimates that in India, 60,000 children under the age of five die from diarrhoea caused by unsafe water and poor sanitation each year; or at least 166 children a day.

Data from UNAIDS shows that of an estimated 37.7 million people living with HIV in 2020, around 20.6 million were in Eastern and Southern Africa, and another 5.8 million in Asia and the Pacific[1]. Combined, these two regions account for 70% of the global total.

The International Diabetes Federation estimates that of an approximate 537 million adults around the world with diabetes, 75% of these live in low-income and middle-income countries (LMICs). Researchers from the University of Birmingham found that no more than 6% of those people with diabetes in a survey of 55 LMICs have access to suitable medicines or advice.

Meanwhile, the majority of cardiovascular diseases, which the World Health Organization (WHO) considers the leading cause of death globally, take place in LMICs. Inferior primary healthcare, including issues with accessing services, is a major cause and prevents detection and treatment of these issues.

Clearly, the scope for impact in health and wellness in EM is enormous.

How does health and wellness contribute towards the UN’s SDGs?
The UN’s Sustainable Development Goals (SDGs) are 17 goals that aim to promote peace, prosperity and the eradication of poverty, all while protecting the planet.

The health and wellness theme directly contributes to SDG 3: Good Health and Well-being. It seeks to ensure healthy lives and promote well-being for all at all ages.

SDG 3 seeks to achieve universal health coverage, including access to effective, and affordable essential medicines and vaccines. By 2030, it also targets universal access to sexual and reproductive healthcare services, and an end to epidemics including HIV, malaria and tuberculosis.

In addition, SDG 3 includes targets to reduce the global maternal mortality ratio (that is, deaths of women due to complications from pregnancy or childbirth) to below 70 per 100,000 births, and to end preventable deaths of new-borns and children under five.

How EM companies are playing a major role in health and wellness
EM companies are playing an important role in achieving these goals. For example, some EM companies produce products which directly aid improved hygiene and health.

Take Indian fast-moving consumer goods company, Hindustan Unilever. It has, among a range of initiatives, extended support to promote handwashing with soap; a product it produces. Studies show that basic handwashing using soap can reduce the risk of diarrhoeal diseases by around 30%. Aiding educational initiatives in this area has potential to reduce incidences of what are preventable diseases, and deaths.

It has also promoted similar programmes in the area of nutrition. For example, the company has partnered with the Global Alliance for Improved Nutrition (GAIN) to provide a workplace nutrition programme. This aims to improve the diets and hygiene practices of worker, small holding farmers and their family members.

In Brazil, pharmaceutical store operator Raia Drogasil is another company having a positive societal impact, and has a stated aim of promoting health and disease prevention. As well as acting as a provider of pharmacy services – it has over 2,500 stores – the company is also building a digital health platform. The company’s ambition is to be the group which contributes the most to a healthier society in Brazil by 2030. As well as products, it is transforming the pharmacy concept by offering health and wellness services in its stores and online, by investing in technology and people.

Through its “Health Hub”, Raia Drogasil aims to provide services beyond comfort and pain relief. The hub includes a range of health and wellness services, expert advice and contact channels in an effort to contribute to the development of healthier habits of more than 40 million people it impacts.

Case Study: Cipla
Company references are for illustrative purposes only and are not a recommendation to buy and/or sell, or an opinion as to the value of that company’s shares.

What does the company do?
Cipla is an Indian pharmaceutical company, present in over 80 countries, providing over 1,500 products across various therapeutic categories. The company has over eight decades of history operating in the sector and its stated mission is “Caring for Life”.

Cipla’s key markets are India and South Africa, but the company has a significant global footprint, with operations across the emerging, as well as the developed, world.

How are Cipla’s products having a positive impact?
Cipla is contributing to lowering the cost of its products and is therefore increasing the accessibility of essential medicines and therapeutics. It is also contributing through its manufacturing processes and philanthropic activities via its the Cipla Foundation.

The Cipla Foundation has operated a palliative care centre in India since 1997, and since then has continued to provide free cancer care to patients. Through the Covid-19 pandemic the Foundation also distributed personal protective equipment, and in partnership with Citibank, the National Health Mission, and State Municipal Corporations in Maharashtra, free Covid-19 test for patients in financial difficulty.

The company targets doubling the number of patients served, and meeting unmet needs; that is providing medicines to those who currently cannot afford or do not have access to these products. It is also providing training to healthcare professionals which is aligned to the WHO curriculum.

In 2001 it became the first company to launch a triple anti-retroviral drug combination, for the treatment of HIV, at an accessible price of below $1 per day, making it much more affordable than standard industry prices.

In 2020 Cipla was ranked by the Antimicrobial Resistance (AMR) Benchmark as the leading generic company in terms of filing in countries with the highest need, being monitored by AMR and decoupling sales incentives from volumes.

Today the company offers over 1,500 products, covering approximately 45% of diseases on the WHO Essential Medicine List.

In addition, the company has also supported two Early Childhood Development Centres near manufacturing facilities in India and South Africa. These cater for nutritional, educational and safety needs for children aged two to six. During the pandemic, Cipla also launched a digital and online learning initiative, helping 30 schools near its facilities.

These measures link most directly to UN SDG 3 in our assessment, but there are other SDGs which Cipla is also contributing towards.

How does Cipla approach sustainability?
Cipla is aware of the challenges that the pharmaceutical industry more broadly creates. Production of medicines results in reasonably high levels of emissions. The company is taking action, however, and already measures its environmental impact and has targets to reduce this.

By 2025 Cipla aims to be a carbon neutral, water neutral and zero waste to landfill company. It also seeks to attain AMR stewardship among other objectives.

By 2030 Cipla targets being carbon positive, water positive and an AMR Compliant company.

Is Cipla contributing to other SDGs?
With its Caring for Life ethos, Cipla is ambitious in its outlook and maps its long term goals to a range of UN SDGs. We have picked out a few of the more significant contributions below.

By improving access to medicines and therapeutics, Cipla is contributing to SDG 1 End poverty in all its forms everywhere. Through its research & development investments, notably green chemistry which helps to reduce the environmental impact of manufacturing, it seeks to contribute to SDG 9 Industry Innovation and Infrastructure. The company is also taking measures to divert co-processed waste from incineration or landfill, which contribute to SDG 12 Responsible Consumption and Production

[1] Asia Pacific includes Australia, New Zealand, and Singapore. However, these countries account for a very small share of people living with HIV in the region.

Originally published by Jonathan Fletcher, Emerging Market Fund Manager and Head of EM Sustainability Research, Schroders