Banking for health: opportunities in cooperation between banking and health applying innovation from other sectors

Abstract

The annual funding need for global health SDG targets is estimated by WHO at US$134 billion per year, rising to US$274-$371bn by 2030. This paper examines the challenge of making sustainable investment structures in global health more attractive for mainstream financial markets. The objective is a framework for targeted future debate with financial sector actors. Four case studies of innovative sustainable investment mechanisms are analysed, elaborating potential transfer of green and impact investment models in order to channel additional private sector funds to health. To increase private sector involvement, profit must accrue to providers of finance. The paper shows how health criteria can be incorporated into structures, which create triple bottom line return opportunities. Health infrastructure projects based on risk sharing models with governments or multilateral agencies could use long-term funding, with better credit ratings and lower cost of capital. Outcomes based investment, similar to green or social impact bonds, with third-party certification of measurable health impact, satisfy the private sector need for return with social interest objectives. Responsible investment could expand by adding a ‘health’ (H) criterion to the Environmental, Social and Governance (ESG) framework, implementing ESG+H for mainstream investment screening. These models are scalable, satisfy the need to dedicate funds to health and incorporate consistent critical success metrics. The conclusion finds that strong legal frameworks and exploration of fiscal incentives will be critical next steps to facilitate scaling up and broadening of interest from private sector financial actors. The impact these investments have on overall population health is a positive externality of sustainable global health investment.