DEREK YACH: investing in employees’ health is major investment for corporates

South African public health specialist Dr Derek Yach heads the Vitality Institute, Discovery's New York-based research think-tank dedicated to health promotion, the prevention of non-communicable diseases, and creation of a new culture of health.  He is in the country to support Discovery's global drive to persuade listed companies to include employee health as a metric in corporate reporting, and a 'fourth bottom line'.  Here he speaks  to Alec Hogg, and Gugulethu Mfuphi about a stellar career path that has spanned the World Health Organisation, Pepsico (for more on that read a Q&A lifestyle profile on him in Biznews), why taking employee health seriously is one of the best investments any company can make, and the value of sleep. MS 

ALEC HOGG: Welcome back to Power Lunch. New York-based think-tank the Vitality Institute, is advocating that listed companies include health as part of a metric for corporate reporting. Derek Yach, who's the Head of the Vitality Institute, joins us for more insight. Gives it away, I guess, Vitality/Discovery, a close connection there Derek?

DEREK YACH: Very close. We're a child of the Discovery Company and globalising fast, so it is wonderful to be a South African sitting in the US, starting to have an impact on US policy and actions.

ALEC HOGG: Before we get into that, as a South African who's gone to the US and done some incredible things – looking through your CV, Yale University, and the Rockefeller Foundation –  what pulled you through to go and work with Adrian Gore's lot?

DEREK YACH: Well, I think anybody who's met Adrian knows that he has a clear passion for improving health and putting health at the centre of the business, and I saw that as unique. I'd spent many years in the public sector in South Africa, The World Health Organisation, and I always wondered how could, we do better to popularise prevention and health promotion and compliment what Government does, within the corporate world.  Adrian offered the opportunity to do that, on a large platform.

ALEC HOGG: And you are here, trying to get companies interested in promoting health amongst their employees.

DEREK YACH: Yes, I think it's an easy push to get the focus on health. It's a tougher push, actually to say: "how can you do what's truly material",  and "what really matters, in terms the health of employees, and how can we measure this more effectively and report on it"?

ALEC HOGG: You used to work for Pepsi Cola.

DEREK YACH: Yes.

ALEC HOGG: And we now see what's happening with sugar, and I know Adrian is also one of these anti-sugar missionaries, almost. What's your take on sugar and the sugar sector, in going forward, given that you used to work for a company that produced sugar water?

DEREK YACH: One of my key jobs at PepsiCo was to work with the CEO, Andrew Nguyen, in trying to build long-term metrics to reduce the sugar per capita in the products, as well as lower salt and fat. I think we've seen quite, amazing progress in the US. There was a pledge made by 16 major corporations, led by PepsiCo to take one-and-a-half trillion calories out of the American diet and, in the next few months, we'll see that they've more than exceeded the target, and they did it by lowering the calories per serving, as well as providing a wide range of products.

ALEC HOGG: How many pounds is that, on people? One-and-a-half-trillion sounds a very, big number.

DEREK YACH: It probably is about 80 calories, per person, per day but the gap between normal weight and being overweight is probably about 160 to 200 calories, so this actually goes a fair way along just trying to close the gap.

GUGULETHU MFUPHI:  But is this sustainable, going forward, maybe for others in the sugar industry?

DEREK YACH: I think it is. I think it depends what you call the sugar industry. I think in the food sector, both in terms of food, beverages and others, I think that the markets are changing. Consumer demand is shifting. People are looking for what is the healthier option and what is the lowest calorie option in many of these areas, so I think, for the long term that is going to be beneficial, both for the companies and for society.

ALEC HOGG: People are getting more health conscious. Today, we've got a piece about Tim Noakes' Banting Diet being adopted in South African Parliament. Now, if you watch the Parliamentary channel you will realise that it is somewhat overdue, but what's your take on all of that, on what Tim Noakes is trying to get us to do?

DEREK YACH: Well, I think Tim is one of the greatest sports scientists this country and many countries have produced, but he's not a nutrition scientist. Having being at the World Health Organisation, where I led the work on diet and physical activity, I think our prescription remains the value of a Mediterranean diet: the value of eating less generally, increasing your plant consumption, moderating your meat consumption, and having a diet that is closer to a Mediterranean diet, which is more balanced and is rather focused on increased activity. This is probably the way forward, and we flip-flop from "it's all fat, it's all sugar" to actually realising that it actually is the quality of the entire diet that matters.

GUGULETHU MFUPHI:  So your view on Banting: it's just a phase and it will wear off?

DEREK YACH: Yes.

GUGULETHU MFUPHI:  How long will it take?

DEREK YACH: I hope fast. I hope it will go away fast.

ALEC HOGG: So, you're not a Tim Noakes' fan, yet Discovery has been one of his biggest supporters?

DEREK YACH: I'm a huge fan of Tim Noakes' intellectual contribution to sport science, but as I said, not on the nutrition side.

ALEC HOGG: As a nutritionist, not?

DEREK YACH: No.

ALEC HOGG: How much success are you having, in getting companies to buy in, to wanting their employees to be healthier?

DEREK YACH: I've been really staggered by seeing the progress. First, in the US, I think there's a broad acceptance that there are 155-million people at work, and that, up till now, companies have started reporting on the environmental contribution, governance and diversity at work. The reason they are doing that is part of integrated reporting, is because it is material to their bottom line. It affects their long-term profits. In the last five or six years or so, there's been wonderful research, showing that the healthiest companies, the ones that focus on the health of their workforce, show a greater return over the long term, to their shareholders and to the company. Not only that, they stimulate morale, they promote retention, they promote productivity, they promote innovation.

Literally, in the last couple of weeks, I was with a group of 22 CEO's, convened by the American Heart Association, including some of the big name companies, such as AT & T, Pfizer, Merck, Johnson and Johnson, and Macy's. A wide range, from many sectors, where the CEO's were saying, "we have to do this because it is not just material to our bottom ….. It's the right thing to do", so I see a trend, not just led from the US, but it is very, apparent here. Of course, Discovery has been running the healthy company index, and we are seeing a huge, responsiveness to it. We are seeing companies like Novo Nordisk, which I just spent time on, putting this as one of their major, long term goals, is improving the long term health of their employee base, because they know it makes them a more attractive company and it improves their bottom line.

ALEC HOGG: There are all kinds of questions that could come out of that, particularly you've mentioned a lot of pharmaceutical companies and I suppose the jury is out there, but what about Wall Street? You go and work for Wall Street. You want a job at Goldman Sachs. You've got 20 hours a day for three months, just to get in the door. Is Wall Street listening?

DEREK YACH: They are listening and I think that's where we are starting to see the greatest response. I work with a group of investors, and sitting around the table you would have Black Rock, CalPERS, Deutsche Bank, UBS, all starting to look very carefully at the way companies are investing, no longer just in their financial outcomes but in their non-financial aspects. The work that Mervin King brought to the table in starting to look at the broader, integrated report, which focused, initially on environment, good governance and so on, we believe now, it needs to be, complimented by focusing on what has been the neglected part. The most crucial part of human capital is, in fact the health of their employees and when we start looking at the failure to invest, means driving healthcare costs.

Many of the companies on the JSE, as well as in the US, would say that the rising level of healthcare costs and the consequences are big impediments to their long-term productivity and their long-term innovation and retention and that's why the greater focus on health is coming into being and the need for metrics. What will come through, when you start looking at the metrics, is that most companies are still spending, in the US terms, maybe 98%  plus, of their healthcare costs, that are going to treatment and care, and well under 2% is going to prevention. Where prevention, we believe holds the greatest opportunity for both lowering costs and producing increases in productivity.

GUGULETHU MFUPHI:  So in other words, companies don't need to be incentivised to do this, as a box-ticking activity.

DEREK YACH: Exactly. We believe that they see the empirical evidence is getting stronger and stronger, and there have been a number of studies, following companies, for 20 years, showing that that is the case, so the demand is increase in rising. The question comes up is, "How do we measure it? What really matters? What are the kind of programmes we could introduce into the workplace that could show a reasonable time return, both to the bottom line of the company and also to the health of the employees??

ALEC HOGG: Derek, we are kind of running out of time, but my point on Wall Street was not so much investing in companies that are healthier but the Wall Street firms themselves. Working 20 hours a day and seven days a week, is not healthy. Are you making any progress there? It is all very well, to feed them right but, if you don't give them enough sleep.

DEREK YACH: Yes, I'm thrilled you mentioned sleep. I think sleep remains one of the big areas, where we are only now starting to see focus. We are working with; I didn't know that Harvard has an entire Sleep Unit.   They are professors of sleep, who are very much awake but they are showing us that sleep hygiene may actually be one of the new, really easy wins that we could be introducing into the workplace. Getting that sleep balance right is going to produce enormous productivity. We do face the problem that many of the CEOs are, themselves very hyperactive, Type-A personalities, and often deny that that's important, to their own personal detriment but to the detriment of their employees.

ALEC HOGG: Arianna Huffington is a big example of this and when I visited Huffington Post, in New York they've actually got two snooze rooms, beautifully decorated. We tried to get one built here, at the JSE, but there wasn't enough space. Is that something that you'll give companies extra points for?

DEREK YACH: I think we should be. I think letting people turn off their electronic doo-dads; stop their use of caffeine and alcohol, a couple of hours before they go to sleep. Not making it a bravado thing, how little sleep you survive on but, actually encouraging people to get the right amount, and looking at lighting, naps at work, all of that is part of what is going to become, I think the next big wave, of what we need to be doing in the workplace.

GUGULETHU MFUPHI:  I think we'll have a power nap, right after Power Lunch. Thank you so much Derek Yach, he's the Head of the Vitality Institute. Do remember that we want to hear from you, so email us on powerlunch@abn360.com. After the break, ADvTECH released their interim results today. We catch up with the results, discussing with the company's outgoing CEO, Frank Thompson, right after this ad break.