‘Our planet, our health’ is the theme for the 2022 World Health Day, underlining that environmental factors impact heavily on health outcomes. This is why foreign direct investment (FDI) has a key role to play in bringing investment into sectors related to health and the environment in order to promote sustainable development and well-being.

More than 13 million deaths around the world each year are due to avoidable environmental causes, according to World Health Organization (WHO). Some of the key environmental risk factors include climate change, chemical exposure, and air, water and soil pollution.

Such stark figures show how important it is to mitigate these risks, and investors can play a role by taking them into consideration during their due diligence process and involving themselves in projects that have a positive impact on the environment and people’s health. This can take in investments not only in the health sector but also in areas related to clean water and sanitation, life on land, life below water and sustainable cities and communities, among others.

How better housing can deliver on health SDGs

Key Cities is a network of 25 cities across England and Wales. Its Healthy City report states: “Our future health is reliant on the health of others and the health of our local and wider natural world and its ecosystems.”

The report sets out a new vision for UK cities to reach by 2050 based upon a ‘health first principle’. This calls for urban areas to increase their support and promotion of mental, physical and social health through policies and reforms at both a local and national level.

The report suggests that a new approach to town and country planning is required to realise this vision, “one that moves away from having the delivery of housing numbers at its core, and replaces it with a holistic vision of health. Delivering affordable, quality housing remains a critical issue as part of an array of conditions necessary to support good health.”

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Ensuring good health and well-being is the UN’s third Sustainable Development Goal (SDG), and the building of affordable and eco-friendly housing could play a role in meeting this target.

The UN Development Programme’s SDG Investor Platform states that affordable housing investment has been delivering high returns – in the range of 15–25% – in several countries, including Djibouti, Ghana, Kenya, Namibia, Nigeria, Paraguay and Rwanda.

Such projects have brought with them better access to formal housing and clean and safe living conditions for low to medium-income communities.

Other investment areas that can work towards achieving the SDG3 targets include affordable medical equipment and consumables, active pharmaceutical ingredients manufacturing, rehabilitation centres, digital healthcare solutions, e-healthcare, essential medicine and drugs manufacturing, family planning and female sanitary products, and healthcare consumables.

To which countries and sectors has healthcare FDI been directed?

Investing in healthcare provides investors with opportunities to generate solid returns and embrace the SDGs, which explains investors’ appetite for greenfield projects in this space.

GlobalData’s FDI Projects Database has tracked 234 greenfield healthcare projects, announced or opened, throughout 2019 and 2020.

The majority are new projects (93%), but there are also cases of expansion (6%) and co-location (1%).

The data shows that the US, the UK, the United Arab Emirates, Germany and Spain are the countries that attracted the highest number of FDI healthcare projects during 2019 and 2020.

Other countries that attracted a high number of healthcare FDI projects include Australia, China, India, Ireland, the Netherlands, Poland and Russia.

Medical practice was the sector that attracted the most projects during these two years, followed by hospitals, dentistry and other human healthcare services.

There have also been investments in sectors related to medical laboratories, miscellaneous healthcare, residential nursing care, veterinary activities and social work activities.

The data also reveals that the majority of investors opting for FDI projects in healthcare are based in the US, followed by Australia, Germany, Japan, the UK and Spain.

The climate crisis is a health crisis, so investment in one of these areas can help to solve problems in the others. The WHO predicts that climate change will cause approximately 250,000 additional deaths per year from malnutrition, malaria, diarrhoea and heat stress alone by 2050.

Investing in areas such as affordable housing may not initially seem as though it will bring health benefits to the local population, but the message is stark and the evidence is clear. Research into disease and other more 'obvious' health-related fields of investment is undoubtedly important, but investors wanting to make an impact when it comes to healthcare need to think beyond test tubes and hospital beds and look at the bigger picture.