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The climate crisis is also a health emergency, with disease, pollution and food insecurity all made worse by extreme weather and environmental degradation.
Indeed, 70% of all cancer drugs are reliant on nature, which is vanishing because of unsustainable resource extraction and higher temperatures – and a healthcare sector that itself produces 4%-5% of global greenhouse gas emissions.
“If you ask people about sustainability, most will talk about climate change and the environment, but there’s much more,” says Deepak Jobanputra, chief sustainability officer at Vitality. “Health, social impact and good governance, to ensure businesses are here for a long time, are also crucial.”
The company, one of the UK’s most impactful health and life insurers, is a sector leader in driving the UN’s Sustainable Development Goals (SDGs) and last year achieved its target to become carbon-neutral. It has also led the way in developing incentives to encourage people to live healthier and more sustainable lifestyles, and can offer many lessons to climate advocates who are increasingly struggling with a communication challenge.
As an actuary with more than three decades’ experience assessing financial risks, Jobanputra’s move into sustainability is pioneering. Although he had long been interested in the subject, the transition came about as the world was demanding more from society and business to drive change for good. After undertaking a sustainability business management course at the University of Cambridge during the Covid pandemic, he made the switch full time.
“Insurance is fundamentally about protection, and helps facilitate positive social change at a systemic level by closing the insurance protection gap,” he explains. “The more I understood about the interconnectedness between environmental degradation, social inequity and health outcomes, the more I felt compelled to help drive change within the insurance sector, because financial services can play a very significant role in sustainability.”
The global insurance industry manages more than $35trn in assets, and is crucial in providing the finance needed for communities around the world to adapt to and mitigate climate change.
The New Collective Quantified Goal, agreed at COP29, aims to mobilise at least $1.3trn in climate finance annually by 2035, and around half is expected to come from the private sector as national governments struggle to step up to the plate.
“There’s a whole range of things that insurers can do to help drive change across economies because we operate in a big value chain; investing in climate resilience and supporting communities in adapting to environmental risks,” Jobanputra says.
“For example, in India, where temperatures can go above 40°C, farmers will continue to work in extreme heat owing to poverty. But we now have parametric insurance products that pay out if the temperatures get to those levels, so the work doesn’t need to continue in extreme heat and workers will still receive income.”
Perhaps one of the most impactful and systemic drivers of change comes from the insurance industry’s ability to alter people’s behaviour. “Climate change affects health directly through heatwaves, air pollution and disease, but also indirectly through strained healthcare systems, and insurers are well placed to encourage healthier outcomes and more sustainable lifestyles to help relieve that pressure.”
Vitality is well known for its incentive-based model that rewards healthy living, with a points-based system for physical activity, healthy eating, mental wellbeing and more. It offers member discounts, free coffees, gym perks and premium reductions for staying active. “We use behavioural incentives – rewards, nudges and gamification – to encourage positive habits,” Jobanputra says. “Customers who are most engaged with our programme can live up to five years longer, and reduce healthcare claim costs by around 28%. We have simple everyday rewards through to very rich rewards, and a huge amount of data that evidences positive shifts in behaviour.”
Sustainability professionals and scientists acknowledge that they have a communication challenge. Research by Climate Outreach last year revealed that three-quarters of Brits believe that green policies will cost them financially – despite studies repeatedly showing that the transition will reduce costs – with the findings also highlighting a growing mistrust in politicians.
Jobanputra believes that climate advocates could learn lessons from behavioural science. “We’ve developed an insurance model over the past 30 years that is rooted in behavioural science; the evidence shows that it absolutely works. “It’s supported by habit formation – small, consistent nudges that develop into a habit; and personalisation is really important because everybody’s different. “For example, when trying to encourage people to be more active, the concept of habit laddering shows that if someone is struggling, you reward them for doing, say, 2,000 steps consistently for a period, then laddering them up to 4,000 steps and so on to create a habit that remains long-lasting.”
Convenience and affordability are some of the greatest drivers of behavioural change, he says: “If you look at electric vehicles, heat pumps and switching to meat-free options, they come with significant change. If we use habit laddering, it’s not about completely switching away from meat; it might be once a week, moving up to twice a week, and the collective impact of lots of people doing it imperfectly can be powerful.
“Climate advocates can apply some of these learnings, focusing on the eco benefits, saving money and providing incentives for people to drive change. It’s also really important that when it comes to sustainability, we don’t preach. We need to understand how to ‘arm’ people with the information and let them make the choice, but then also give them the tools to be able to do so, and the solutions need to be convenient.”
Companies with a strong social and environmental purpose often generate higher profits than those without, although Donald Trump’s anti-green agenda in the US has seen some in the financial sector turn away from ESG commitments.
“There has been an impact, and some of the headlines in the media are not helpful, but in some respects it’s helped us to talk about it and be more focused on the message,” Jobanputra says. “Businesses are clearly affected by the geopolitical headlines, but actually, they’re continuing with their good work and talking about it in a different way.” He believes that Vitality sets a clear example of how the pursuit of environmental and social sustainability goes hand in hand with shared value, where everyone benefits.
“Our purpose-driven, shared-value model works by us taking insurance risk, but reducing that risk by getting people to be healthier. If we’re successful in doing that, it’s great, because we get lower claims costs, and can channel those savings back to our members through rewards and lower premiums,” he says. “We benefit, and our customers benefit, but society also benefits because there’s less demand for healthcare, productivity increases and there is less pressure on health systems as a consequence, so it’s a win-win-win situation.
“Historically, business has focused on profit as the ‘only or main’ measure. If you go down that route, it may work for a while, but purpose, profit and long-term sustainability is what is being demanded from society and will be the winning formula – it hopefully becomes a licence to operate and thrive.”
After achieving carbon neutrality last year, the company has now set its sights and focus on becoming net-zero across its scope 1, 2 and 3 emissions by 2050 or earlier, and published a science-based transition plan in the latest quarter.
“Scopes 1 and 2 are relatively low for us, because we’re a services company and don’t manufacture goods. We have residual emissions that we offset through verified carbon-offset schemes, but we don’t lean on those too much,” Jobanputra says. “The biggest challenge is scope 3, and a lot of the targets that we’ve set within our net-zero plan are around influencing and engaging with our suppliers.”
Health insurers operate within a large value chain, which includes clinics, hospitals, pharmacies, tech firms and regulators, and so they can be hugely influential in driving sustainability across economies.
“We’re engaging all of our suppliers on ESG and are mapping outcomes on a risk matrix – this will help us gauge opportunities for enhancement. A lot of our stakeholders are also asking what our sustainability credentials are, so the whole market is heading in the same direction,” Jobanputra says. “As this becomes ‘normalised’ it will set standards and minimum thresholds, and those that don’t meet these will likely suffer.
“In sustainability, collaboration is the new form of competition, so we’ve got to work together to drive change. No one single actor can actually make the impact that is needed. We need to work together towards a common goal.”
Internally, Vitality’s green champions help drive culture change throughout the company by leading on sustainability initiatives and projects, acting as a bridge between strategy and everyday practice.
The company has worked with the UN and global insurers and reinsurers to deliver a research paper titled Health is Our Greatest Wealth that acts as a blueprint for change. Jobanputra adds: “We also adopt the UN’s SDGs and this is where the business truly leads the way with its target to encourage one billion healthy activities a year by 2030. That reduces demand for healthcare because people are less sick, and also reduces the environmental impact, because healthcare is a carbon-intensive industry, more so than aviation."
Artificial intelligence (AI) could be a gamechanger for progressing SDGs – providing that energy systems are decarbonised – with huge potential for both tackling climate change and improving healthcare.
“New modelling techniques for storms, floods and wildfires will help create insurance products in areas where insurability may not currently exist because we don’t understand the risk fully enough,” Jobanputra says.
“In the world of health, digital twins can help us understand how diseases like cancer may progress, so we can target personalised medicines and interventions that will create better health outcomes.”
Vitality has already partnered with Google, which will help bolster its health recommendations for its members, whether it’s more physical activity, better sleep, improved nutrition and so on.
“AI can revolutionise diagnoses, treatments and prevention. It clearly needs to be developed responsibly and take account of patient journeys, avoid bias and build trust, so transparency in algorithms is essential, as is a clear consent process so that every stakeholder knows what they’re entering into. Trust is going to be really important, and we must ensure that AI enhances care without replacing the human touch.”
Highlighting the link between health and climate, Jobanputra also explains how innovation and AI will play a key role in developing drugs that are resistant to environmental changes.
“Medication can be less effective in a very hot environment, so innovation will be key, especially for heat-related illnesses, vector-borne diseases and mental health. However, if we continue to damage nature, we may not have access to certain drugs, and human health will go backwards. All the good stuff that we’ve done around cancer treatment and other diseases could be damaged.
“There is tremendous opportunity ahead with the intersect of AI and sustainability – businesses can truly embrace being a force for social good to gain competitive advantage while making the world a better place and meeting the needs of all stakeholders.”
Chris Seekings is the Deputy Editor of ISEP’s Transform magazine, which is published biomonthly for ISEP members. Chris’s role involves writing sustainability-related news, features and interviews, as well as helping to plan and manage the magazine’s other day-to-day activities.
