HIV/AIDS: an issue for responsible investors?
Last week marked the thirteenth World AIDS Day which aims to raise awareness about HIV and AIDS around the world. It’s 30 years since the virus was first identified and globally an estimated 33.3 million people now have HIV. More than 25 million people between 1981 and 2007 have died from the virus, making it one of the most destructive pandemics in history.
HIV/AIDS is a condition which affects people of all ages, particularly young adults aged between 14 and 45 who represent one of the most economically productive portions of the population. Without adequate treatment the virus can reduce their productivity and bring their lives to an early end.
Determining the full economic impact of HIV/AIDS can be difficult, but studies suggest that some of the hardest-hit countries could forfeit up to 2 per cent or more of GDP growth annually. Aside from the costs associated with health care and medication, HIV/AIDS also has other broader economic impacts including reductions in saving rates, investments and consumer spending in those regions which are heavily affected by the virus. Other economic impacts arise from the loss of current and available labour resources – particularly in those sectors which require high levels of labour but which are also highly impacted by HIV, such as the extractives and construction and materials sectors. Companies therefore have a lot to gain from preventing the spread of HIV infection among their workers, suppliers and customers.
According to the 2011 UN World AIDS Day Report, Sub-Saharan Africa remains the region most heavily affected by HIV. The epidemic continues to be most severe in southern Africa, with South Africa having more people living with HIV (an estimated 5.6 million) than any other country in the world.
As part of a broader programme of emerging market work, EIRIS conducts research for the Johannesburg Stock Exchange (JSE) SRI Index which tracks corporate responses to environmental, social and governance issues amongst a section of companies in South Africa. This includes considering their approaches to HIV/AIDS. A snapshot of corporate responses to HIV/AIDS amongst 106 JSE-listed companies in 2011 shows that 28% of these companies meet all the requirements listed within our assessment methodology.
These ‘best practice’ companies have provided evidence of an extensive HIV/AIDS policy covering key areas such as confidentiality, non-discrimination, treatment/prevention; education and awareness programmes for employees; evidence of risk assessment in relation to HIV/AIDS; access to voluntary counselling and testing for employees; as well as meeting other key requirements relating occupational health & safety training and sponsorship of community-based treatment, care and support. Whilst it is encouraging that companies are putting various policies and initiatives in place to respond to HIV/AIDS there is still considerable scope for further action.
What should companies and investors do? Acting early on HIV/AIDS pays off for companies. It reduces the future burden of death and disability and eases the high costs associated with treating and caring for large numbers of people living with HIV and AIDS.
Companies can have a significant impact by promoting HIV prevention programs in the workplace. They also have the power to form lobby groups to influence government policy. Better monitoring and evaluation also helps in planning and implementing programs to tackle HIV/AIDS, in identifying gaps, and, importantly, in sustaining, scaling up, and expanding initiatives.
Investors also have a key role to play in engaging with companies to encourage them to adopt best practice responses to HIV/AIDS, particularly with those companies which are operating in countries which are at particular risk. Opportunities exist for investors to encourage companies to engage with broader stakeholders, to consider HIV/AIDS risks across their entire supply chain and to share knowledge and best practice in tackling the issue.
Adopting a more focused and strategic approach to HIV/AIDS is essential for success in meeting the UN AID’s vision of a world with zero new HIV infections, zero discrimination and zero AIDS-related deaths. The world will only succeed in meeting these if sufficient and strategic investments are made in efficient and effective programmes. Companies, and those that invest them, have a vital role to play in this process.
