Monda Naqvi and Rachel Hodgdon live from the Nasdaq Marketsite ESG Event Putting “H” Health and Humanity into ESG. Hosted by Humanity 2.0 & International WELL Building Institute (IWBI)
In this captivating segment Mona and Rachel break down key topics including:
- How Investors are thinking about Health and Wellbeing from an ESG Standpoint
- ESG Integration across all 3 pillars or should their be more added to ESG Like ESHG
- Where is ESG Going
FULL COVERAGE
INTERVIEW TRANSCRIPTS: Mona Naqvi is the Global Head of ESG Capital Markets Strategy at S&P Global and Rachel Hodgdon is the President and CEO at IWBI
Rachel Hodgdon – President and CEO, IWBI -(00:00):
Hi, I’m Rachel Hodgdon President and CEO of the International WELL Building Institute, and I’m here today with Mona Naqvi. Mona has one of the biggest jobs at S&P Global, She’s the head of ESG capital market strategy. Under her leadership S&P always seems to be just a couple of steps ahead of the game, not fixed on where the hockey puck is going, but watching where it’s eventually gonna be. And it’s been no different with health and more generally with how companies should appropriately value human and social capital. So Mona, in the last few years, talk to us a little bit about the shifts that you’ve seen and how investors are thinking about health and wellbeing from an ESG standpoint.
Mona Naqvi – Global Head of ESG Capital Markets Strategy, S&P Global – (00:47):
Yeah, Rachel, it’s a great question because I think even going back before just a few years, health and wellbeing have been core to many different types of investments from the early days of socially responsible investing back in the 1960s, the tobacco litigations and all the, uh, tobacco free portfolios that loads of investors were seeking. Um, that then continued in the decades. That followed was probably the first time where investors took note of the potential material risk associated with public health issues and wanting to reflect that in their investments. And there was a real financial driver there with tobacco litigation, but for many other investors, it was more moral expression of their values where they didn’t want to be seen to be supporting these types of products, um, that they knew to be so damaging to public health. So that’s always been there at the back of our minds, but that’s a very concrete, single example.
Mona Naqvi – Global Head of ESG Capital Markets Strategy, S&P Global – (01:38):
I think what the last few years has helped to really uncover of course, through the pandemic and other, um, global health scares of recent years, that this is an deeply interconnected global complex issue. And when you look at our supply chains of companies in the investment portfolios, there is no company or investor that is exempt from the, um, complex risks and opportunities that are peppered across the globe, whether it be, um, rising regulations or health and safety standards in one part of the world versus, um, climate change and physical climate risks and floods and another part of the world and the knock on effects on health thereafter. So whether or not an investor takes a moral trust in health and humanity, there are financially material risks that stem from these topics that will affect every corner of the world in one way or another. And that will eventually translate into investor portfolios. So ESG and ES H G, we’re gonna call it. I think when we put the H in there for health, um, over the last few years has really stepped up investor transparency awareness and integration of these different types of issues that we’ve not traditionally thought of as investment risks, but believe me, they are
Rachel Hodgdon – President and CEO, IWBI -(02:52):
Mm-hmm <affirmative>. So you mentioned ES HG. So I, I, I wanna ask, you know, are you of the mind that ESG is something that needs to be integrated across the three pillars of ESG? Or do you think that we should add an H in there, like ESCA or
Mona Naqvi – Global Head of ESG Capital Markets Strategy, S&P Global – (03:08):
Something? <laugh> I I’m only kidding. ESG is complicated enough. Um, as, as, uh, I know we’ve talked about in the past, Rachel, I, I think ESG is a really useful top line metric. It gives a signal and it tells, um, us exactly where to look, but on it O on its own, it’s not necessarily always sufficient, depending on the use case. Um, when you put so many metrics together in one bundle, you’re inevitably going to water down some of those effects. And so what we’re seeing increasing these investors going, looking the herd of ESG and going deeper down into those underlying metrics. And I think there is a place for health and humanity and wellness across all three of those dimensions. And it already is there in some cases, as we’ve talked about, there are different in terms of materiality that vary across industries, it’s not equal across the board.
Mona Naqvi – Global Head of ESG Capital Markets Strategy, S&P Global – (03:56):
There are different individual investors with their own investment actives that may care more about impact in certain cases than others. And so there is really, and truly no one size fits all. One of the things that we are trying to do at S&P is to better help disaggregate the ESG score so that investors can surface the appropriate data to answer a specific question by using specific lenses. Um, so we’re thinking about, uh, things like a risk lens or an impact lens, which can just help you, um, interpret the ESG score a little bit better. I think that’s probably what’s needed when it comes to health and wellbeing. The metrics are there they’ve been there, but it’s about making sure we’re surfacing the appropriate metrics to help answer more pointed questions, to answer very specific use cases to depending on the investor.
See related article: Humanity 2.0: Intergenerational Well Being Initiative: WISE | ESG News
Rachel Hodgdon – President and CEO, IWBI -(04:41):
mm-hmm <affirmative>. So where do you see it all going? Like, how do you see us better accounting for the materiality of health? And do you see health becoming more integrated and elevated across the ESG landscape?
Mona Naqvi – Global Head of ESG Capital Markets Strategy, S&P Global – (04:55):
There’s many different route to that. And I definitely think that’s on the horizon. Um, quite simply one is regulation. You know, when we look to climate, as an example within the ESG space, much of the risk stems from regulatory action, be it, uh, the Paris Agreement and more stringent carbon taxes and emissions trading schemes. I think it is a natural evolution that eventually we start to see similar interventions that will translate across all of the ES and G areas we have already the United nation, sustainable development goals. Health is a key priority for the international community, and we’re very close, I think, to having a, more of an international policy framework and consensus to making these things, uh, more easily translated in an investment framework. So even though there are individual investors that might already be integrating the metrics that they need to answer their own individual questions down the pike, I do see a world where the international community steps up and creates a framework that can more easily translate to the investment community. And I look to the SDGs and I look to IWBI as a leading, uh, player in this space to help set those standards and make sure that, um, things fall into place in the right way.
Rachel Hodgdon – President and CEO, IWBI -(06:03):
mm-hmm <affirmative> And we are up for the challenge, Mona, it’s always so great to talk to you and hear your perspectives. Thanks again for being with us today.
Mona Naqvi – Global Head of ESG Capital Markets Strategy, S&P Global – (06:08):
My pleasure, Rachel. Thank you. Bye.