Washington File - January 22, 2004
A global survey of business leaders shows that firms are not very active
in combating HIV/AIDS, even in the face of expectations that their
businesses may be adversely affected by the advance of the epidemic.
Commissioned by the World Economic Forum (WEF) and the Joint United
Nations Program on HIV/AIDS, the survey was conducted among almost 7,800
business leaders in 103 nations.
Entitled "Business and HIV/AIDS: Who Me?," the survey also concluded that
businesses have made an incomplete assessment of the actual risks they do
face from the disease, and have an inaccurate understanding of how widely
their workforces are affected by the virus. The findings were presented
January 22 at the World Economic Forum in Davos, Switzerland.
The study also found a correlation between business leaders' outlook on
their capability to cope with the epidemic and their opinions about the
quality of governance in their nations. Those survey respondents who
regard their countries as generally well governed with respect to economic
and social policies are also more optimistic about battling the epidemic.
Respondents in low-income countries with high rates of disease voiced the
most concern about the impact of the epidemic.
"Society would undoubtedly benefit significantly if businesses made a
greater contribution to tackling the HIV/AIDS epidemic," the report says.
It suggests that international leaders must provide more accurate
information about the threats of the disease in order to create greater
incentive for business to act.
The report is available in full at http://www.unaids.org/en/default.asp
Following are excerpts from the report:
Business and HIV/AIDS: Who Me?
A global review of the business response to HIV/AIDS 2003-2004
"Business and HIV/AIDS: Who Me?" presents findings from the first global
survey of business leaders'opinions on and responses to the threat of
HIV/AIDS. The report, which was commissioned as part of the 2003/2004
Global Competitiveness Report of the World Economic Forum, is the first of
these publications to address HIV/AIDS. Recognition of the virus's
importance by this prestigious and wide-ranging study reflects the growing
concern of policy-makers and business leaders across the world. HIV/AIDS
is increasingly recognized as a potentially serious threat to economies,
businesses and communities.
This report provides an analysis of the data collected by the Global
Competitiveness Report's Executive Opinion Survey. The survey gathers the
opinions of over seven thousand business leaders in 103 countries,
tackling such issues as their concerns over HIV/AIDS, their estimates of
HIV prevalence within their firms, and their responses to the disease. It
allows us to paint a picture of the type of environment that is most
vulnerable to serious impacts of HIV/AIDS on businesses and communities.
Geographical location, national incomes and quality of governance are all
significantly correlated with firms' perceptions of the virus's likely
impact. Responses to the survey highlight which factors are seen by
business as most important.
The report is divided into three sections. Part 1 assesses the literature
on the impact of HIV/AIDS on economies and businesses. It looks at the
areas of a business that are most likely to be affected and at how
businesses are measuring the effects.
Part 2 discusses the data from the Executive Opinion Survey, focusing on
the questions covering HIV/AIDS. It examines firms' estimates of the scale
of the epidemic and its impact on their operations; the nature of that
impact; the perceived effect on the communities in which business work;
and how businesses have responded to the threat. It also looks at how the
policy environment faced by a business can have a major effect on how
firms perceive the virus.
Finally, in part 3 of the report, we draw out the main conclusions from
the data and offer recommendations for future action. We conclude by
making recommendations for the content of future Executive Opinion
HIV/AIDS has become a major global policy issue, with United Nations
Secretary-General Kofi Annan describing it as, "not only the world's
biggest public health challenge, but in some countries the biggest single
obstacle to development". The Global Competitiveness Report 2003-2004
(GCR) addresses HIV/AIDS for the first time. This report analyses the
results of the GCR Executive Opinion Survey, which asks 7,789 firms in 103
countries about their concerns over and responses to the threat of the
Part 1 assesses studies of the impact of HIV/AIDS on economies and
businesses. From the limited evidence available in the existing
literature, the following conclusions can be drawn:
Serious macroeconomic impacts are likely to be limited to high HIV
Individual businesses may see adverse effects in both low- and
high-prevalence settings. The effect on the labour force is likely to be
most visible and, particularly in hard-hit countries, damaging. The
impacts on markets and costs of capital are harder to detect and are
likely to be felt, if at all, in the longer term.
For large multinational businesses with high-profile brands and for
companies in certain sectors, reputation may be the key driver for action
Part 2 discusses the Executive Opinion Survey (EOS) data, focusing on the
questions covering HIV/AIDS. Only 13% of firms in the survey have
conducted quantitative studies of HIV prevalence levels among their
workers. 64% nevertheless provide estimates of infection rates, with the
majority reporting lower rates than the UNAIDS estimate of overall
prevalence in their countries. The disparity between EOS and UNAIDS
estimates is greatest in Africa, where 45% of firms report less than 1%
prevalence, despite estimates from UNAIDS that just 10% of respondent
firms in Africa are located in such low-prevalence countries. Firms that
have carried out quantitative surveys report lower infection rates than
Despite perceived low infection rates among workers, business leaders
nevertheless regard HIV/AIDS as a serious problem and are concerned about
its impact on their business:
The most concerned firms are based in high-prevalence and low-income
Firms in countries with strong overall governance indicators -- including
an effective, open and fair national legislative body with a strong focus
on improving health, education and poverty reduction; a favourable
business environment; and a free press -- are less concerned about the
threat of HIV/AIDS to their businesses than firms in badly-governed
Firms show a similar pattern of concern over the virus's impact on their
Although operating costs are generally not perceived to have increased
substantially as a result of the epidemic, firms believe that if their
communities are hard hit, they themselves are unlikely to be immune to the
Businesses' response to the epidemic has so far been piecemeal. 83% of
firms have no HIV/AIDS-specific written policy. The 6% that do have
policies (the remainder do not answer the question) do not always
Prevention programmes focus primarily on information provision, with
employees the main target. A significant proportion also target employees'
dependents and surrounding communities.
Care, support and treatment programmes target both employees and their
dependants with a range of policies including diagnosis and treatment of
sexually transmitted diseases, treatment for opportunistic infections and
provision of anti-retroviral drugs
In countries with high HIV-prevalence and low incomes, many respondents
are unsatisfied with their firms' existing policies.
Part 3 of the report summarizes the main findings from the EOS data. It
draws three important conclusions. First, businesses are not particularly
active in combating HIV/AIDS, even when they are concerned about the
epidemic's effect on their business. Second, firms are making decisions on
what to do about HIV/AIDS without comprehensive knowledge of the risks
they face. Few firms have conducted quantitative studies of HIV prevalence
among their workforce and, while many are worried about the epidemic,
highlighting specific aspects of a business that are likely to be affected
proves difficult. Those firms that do provide estimates of prevalence
rates among their workers systematically believe that a smaller proportion
of their workforce is infected than national prevalence rates would
The third main finding is that businesses are more sanguine about being
able to cope with HIV/AIDS if they believe their countries are generally
well governed. Businesses appear to support a broad response to the
epidemic, involving private and public sectors and nongovernmental
organizations. Governments and NGOs are likely to benefit from working in
partnership with businesses, providing them with the information they lack
and designing incentives to encourage business involvement. ....
Conclusions: What have we learned
Taken as a whole, the Executive Opinion Survey suggests three important
conclusions on business and its current level and quality of response to
the HIV/AIDS epidemic:
1. Firms are not particularly active in combating HIV/AIDS, even when they
expect the epidemic to cause serious problems for their business.
47% of the business leaders polled felt that HIV/AIDS is having or will
have some impact on their business, and 21% estimate a serious impact.
HIV/AIDS is consistently regarded as a more serious threat than either
malaria or tuberculosis, both globally and across all regions.
Respondents do not believe they will be immune to the virus when it makes
inroads on their local communities. Businesses estimate roughly the same
level of impact on the communities in which they operate as on the firm
itself (overall, 20% perceive a serious impact on the community and 21% on
the firm). Business leaders' levels of concern about HIV/AIDS also rise in
line with prevalence rates in their country of operation. For example, in
Africa, where infection rates are highest, 89% of firms report some impact
and 60% a serious impact.
Even in areas where prevalence rates are high, there are many firms that
do not believe they will be affected by HIV/AIDS. Globally, moreover,
fewer than 6% of businesses surveyed have an HIV/AIDS-specific written
policy that has received formal approval, and firms that report a serious
current or future impact from the epidemic are only twice as likely to
have a programme in place. Even among those firms that have conducted
workforce surveys, only 15% have board-approved policies
Despite the dearth of policies and programmes, and the inconsistent nature
and implementation of those that do exist, 37% of all business leaders are
satisfied with their response to HIV/AIDS, despite relatively low levels
of activity. However, firms become less sanguine in areas where the
epidemic is at its worst.
2. Businesses appear to be making decisions based on a patchy assessment
of the risks they face.
Among those who report a severe current or future impact from HIV/AIDS,
fewer than 25% can point to specific areas of the business that the virus
will affect. Further, two thirds of business leaders have not seen a
serious impact against any of the five operating indicators.
This finding suggests one of two scenarios. Either many businesses
anticipate that they will face increased costs as a result of HIV/AIDS,
but only in the future, or they are drawing on insufficiently
sophisticated information to disaggregate the impact of the epidemic from
other factors affecting business performance.
Business leaders also find estimating HIV prevalence rates among their
workforce problematic. Over a third did not answer this question, and just
18% overall have conducted a quantitative survey among their employees.
Respondents systematically believe that a smaller proportion of their
workforce is HIV positive than national prevalence rates would predict, a
difference that is more, not less pronounced among those that have carried
out studies. This finding suggests that either these businesses are using
faulty data, or that their employees are indeed less likely to be infected
than average, either due to the type of workers they employ, or to the
success of their prevention programmes.
3. Firms seem to favour a broad social response to the epidemic, even if
only a small number of businesses currently see themselves as a integral
part of that response.
Confidence in managing the threat of HIV/AIDS among businesses is affected
by broader perceptions of how well equipped they believe their country to
be to cope with a range of other pressing issues. In other words,
businesses seem to expect a lesser impact from the epidemic if they live
in a society that is generally well governed.
Firms with equal prevalence rates (both self-reported and as reported by
UNAIDS country figures) think HIV/AIDS will have less of an effect both on
the company and community, the more confident they are in a range of
governance, economic policy and social policy indicators. Government
transparency, freedom of information and effective poverty reduction
programmes are all felt to be helpful by business leaders concerned by
HIV/AIDS. In other words, business leaders seem to support the view that
serious public health problems merit more than a health-based response.
How to turn back the 'lethal march'
Society would undoubtedly benefit significantly if businesses made a
greater contribution to tackling the HIV/AIDS epidemic. However, the
observed failure to act suggests that firms lack either information or
incentives. In the former case, they may not be able to assess the risks
they face, the costs of acting and the potential benefits from successful
action accurately. In the latter case, there may be significant
externalities, where the benefit from action accrues not just to the
business that funds the action, but to the wider society. This suggests an
agenda for future action.
Accurate, objective and unbiased information on HIV/AIDS must be generated
and disseminated, covering areas such as workforce prevalence, the impact
of the epidemic on business at different prevalence levels and the cost
effectiveness of business-sponsored prevention activity. Studies must be
rigorous in their attention to the potential for externalities, taking
account of frequently practiced responses, such as where a business
chooses to employ new workers rather than provide benefits for sick
workers. There should be particular emphasis on demonstrating, beyond
question, specific activities for which business can expect an adequate
rate of return for any investment they make.
The potential of business associations and coalitions to tackle HIV/AIDS
should continue to be utilized, as firms have a greater incentive to
participate in and sponsor prevention activity if they can focus on the
problems facing an industry sector or geographical area. Coalitions are
also able to share experience and spread the cost of developing tools and
approaches, ensuring lower start-up costs and greater efficiencies.
Public-private partnerships should be considered where they capitalize on
the relative strengths of and incentives enjoyed by governments, NGOs and
businesses. Governments and NGOs should continue to use moral suasion to
make firms more likely to act, while being aware of the capacity and
financial constraints facing many firms. But governments can also use
policy to make action more likely, although they must tread lightly if
they are not to generate further ill economic effects. Governments can
also design contracts, tax relief programmes and other types of incentives
to reward business action or partfund activity through the public purse.
What else we need to know
Inclusion of questions on the impact of HIV/AIDS on business and firms'
response to the epidemic is a new component of the Executive Opinion
Survey. The results and conclusions of the 2003 study suggest that in
future years it will be important for this part of the survey to focus on
specific testing of the following set of hypotheses:
--Do businesses perceive AIDS to be a significant business issue?
--What information do they use to assess risks? • Do businesses believe
they can respond effectively to the epidemic? Why/why not?
--What are the components of their response? How much do they spend? Can
they quantify any benefits they receive?
--What other policy interventions make business more or less likely to
--How do these data vary according to company size, business sector,
seniority of respondent, region, national income group and national
Data that deals with these questions will inform business leaders and
policy-makers alike, and equip them to manage the threat of HIV/AIDS more
effectively in three key ways.
First, it will provide specific measures of the relationship between
business concern and related action on combating the epidemic at firm
level, in terms of workforce, customer and community impacts. Second, it
will demonstrate the extent of business's ability to quantify and measure
the human and financial impacts it is experiencing, or expects to face.
And third, it will open up a dialogue between business and policy-makers
on how public and private sectors can most effectively collaborate to
arrest the 'lethal march' of HIV/AIDS on a global basis.