Poor nutrition in developing countries is costing firms $850bn annually – report

Malnutrition among workers in developing countries is costing businesses up to $850bn (£676bn) a year, according to analysis of the hidden impact of poor diet on productivity.

Worst affected were industries relying on manual labour, including mining, agriculture and construction, according to a report by Chatham House and the consultancy Vivid Economics. But it found big losses caused by malnutrition in all 13 business sectors studied, including health and education.

Productivity losses due to employees underperforming because they are underweight cost companies up to $38bn (£30bn) a year across the 19 countries studied, while losses due to obesity cost up to $27bn (£21bn), researchers found. They scaled up the findings to estimate the cost to all businesses in all low- and middle-income countries.

Laura Wellesley, senior research fellow at Chatham House and lead author of the report said: “We’ve known for a long time the impact of malnutrition on society and the huge costs to governments, but the impact on businesses has been overlooked.”

Wellesley said the $850bn in losses, the equivalent of 2.9% of GDP across all countries, was likely to be an underestimate. The research examined the impact of obesity and being underweight, but not related conditions such as anaemia and short stature. Anaemia could reduce economic output by an additional 0.8% of GDP, and short adult stature, an indication of stunting in childhood, costs an additional 0.4% of GDP, according to the report.

“Poor employee nutrition is a significant, but poorly understood challenge for businesses operating in low- and middle-income countries,” said Wellesley. “Undernutrition and obesity are causing big losses across all sectors, and many businesses face a double burden of costs from both obese and undernourished workers.”

Of the countries studied, Ethiopia and India face the highest burden on business due to workers being underweight, with losses worth 1.6% and 0.9% of GDP respectively. Egypt, Albania and Honduras face the highest costs due to obesity, at 2.6%, 1.5% and 1.4% of GDP respectively.

A number of countries face a “double burden” of malnutrition, with high costs associated with both under- and overweight workers. They include Ghana, Namibia, Tanzania and Zimbabwe. In Namibia, 12% of the workforce is obese and 10% underweight.

Related: Malnutrition leading cause of death and ill health worldwide – report

More than 80% of the multinational companies studied reported taking some form of action to tackle malnutrition, including workplace initiatives to improve diets, or through partnerships with NGOs to deliver nutrition programmes in the community. But the report found that most businesses’ approach to tackling malnutrition was “patchy and incomplete”.

The report was funded by the Power of Nutrition, a charitable foundation supported by a number of multinational companies including Bayer, Kellogg’s and Unilever. It recommends that companies implement workplace policies on nutrition, such as support for breastfeeding mothers, regular nutritional health checks and the provision of nutritious and subsidised food at work.

It also urged that – in addition to tackling malnutrition via social responsibility programmes – companies pay a living wage so that employees can afford good food.