The next section was excerpted from this fund letter.
Governance Can Strengthen Total Company Sustainability
Governance additionally supplies a direct hyperlink to growing sturdy sustainability practices at an organization. Managed care firm and ClearBridge holding UnitedHealth Group (NYSE:UNH), for instance, has been making vital governance modifications in response to investor suggestions, with sustainability a rising precedence. The corporate has traditionally confronted criticism, from ClearBridge and different buyers, for the lengthy tenure of its board of administrators. In response, it has turned over seven board seats previously 5 years and cut up the chairman and CEO roles.
A associated change is that, as sustainability has elevated in significance, UnitedHealth has revamped and elevated board oversight of ESG. Now the Governance Committee of the board is charged with oversight of UnitedHealth’s ESG initiatives and progress. The corporate additionally appointed a company Chief Sustainability Officer who’s a part of the workplace of the CEO, studies on to the CEO and attends and presents at every Governance Committee assembly.
A part of UnitedHealth’s current sturdy ESG profile has been a deal with “well being fairness” because it seeks to lift the usual of care in underserved communities within the U.S. This focus contains screening Medicare members for fundamental social wants resembling vitamin and housing, establishing native pharmacies, bettering mortality and life expectancy for African Individuals, particularly girls, and addressing psychological/behavioral well being, with a heightened deal with youngsters. UnitedHealth has additionally made a $100 million dedication to bettering the range of the U.S. well being care workforce and to reinforce what it views as “culturally competent care.” It expects to coach 5,000 new minority clinicians and supply “upskilling” for a further 5,000.
One other current governance change at UnitedHealth has been the location of its well being care fairness targets, along with its scientific coverage, beneath the oversight of the board’s Well being and Scientific Practices Coverage Committee. Additionally, the Audit Committee will evaluate the standard and accuracy of all ESG disclosures.
Total, the institution of a company sustainability perform that collaborates with the core enterprise features represents vital progress on sustainability at UnitedHealth over the previous yr, and is an effective instance of how the voice of ClearBridge and others calling for governance enhancements might help enhance sustainability practices as properly.
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Editor’s Be aware: The abstract bullets for this text had been chosen by Looking for Alpha editors.