20th February marked the World Day of Social Justice, which aims to heighten awareness of issues such as poverty, exclusion, gender inequality, unemployment, human rights, and social protections. (By Henning Padberg, portfolio manager of Nordea’s Global Climate and Social Impact strategy)
Until recently, the ESG landscape has been dominated by the ‘E’ – with the spotlight mostly fixated on finding solutions to combat climate change. While this remains vital, environmental and social issues are closely linked. Man-made climate change, for example, affects societies through changes in water, air, food, the ecosystem, our livelihoods and infrastructure.
If we are to achieve an inclusive green economy, we must continue to provide solutions to combat many of the challenges surrounding the social, or ‘S’, in ESG.
Of the UN SDGs, 11 are predominantly addressing social issues. To achieve the 2030 goals outlined by the UN, an estimated $5-7trn of ‘S’ investment is needed per year – but only half of this is currently being spent. This annual investment gap of about $2-4trn presents a huge opportunity for companies able to meet this demand. For investors, this means bridging the financial gap by backing those companies offering social goods and services. Beyond the importance of contributing to a better society, it also makes financial sense.
Below, we outline four companies providing innovative solutions in the social sphere. Each stock is held within our Global Climate and Social Impact strategy.
Aligned to SDG 3 – Good Health and Well-being, Danish pharma company Novo Nordisk is focused on medicine to prevent, diagnose, and cure diabetes and other serious chronic diseases. The number of adults living with diabetes is set to jump from 537 million in 2021 to 783 million by 2045, with the rate rising faster in low and middle-income countries. Novo Nordisk has increased product accessibility of insulin therapy – often an important part of diabetes treatment – with an equitable pricing strategy in all low-income countries and in many middle-income countries with large low-income populations.
Safaricom is the largest telecommunications provider in Kenya. With roughly one-fifth of adults in Kenya lacking access to financial services, Safaricom is expanding financial inclusion via its M-Pesa mobile platform, which provides transaction services through a SIM card. Financial inclusion is a key element of social inclusion and is particularly useful in combating poverty and income inequality. Aligned with SDG 1 – No Poverty, M-Pesa, which has grown to 28.3 million active monthly customers, also supports economic growth by offering small business owners a one-stop solution for receiving and managing payments.
Aligned to SDG 2 – Zero Hunger, Ireland’s Kerry Group is a leader in nutrition, and it is increasingly specialising in plant-based and meat-free alternatives. In addition to offering holistic solutions to tackle decarbonisation, Kerry is contributing to a healthier society, marketing probiotics to add health benefits to food, as well as flavour modulation and sweetener technologies to cut sugar. While an increasing number of research links excessive sugar consumption to health concerns including obesity and diabetes, Kerry’s Tastesense Sweet range enables food manufacturers to reduce sugar and meet nutrition targets without compromising taste.
Aligned to SDG 3 – Good Health and Well-being, US group Dexcom is a leader in diabetes-care technology. It designs, manufactures, and sells continuous glucose monitoring (CGM) technological devices to enable patients to safely monitor glucose levels. When not managed well, diabetes can cause serious health conditions, such as kidney disease or vision problems, and it is the most common reason for frequent emergency room visits by older adults. Operating in more than 40 countries, Dexcom is empowering more than 900,000 insulin-using patients. Aware of inequalities in CGM use based on socioeconomic status, Dexcom has an expanded coverage for low-income populations through state Medicaid programmes in the United States.