Uncovering the true cost of stunting to the private sector

Uncovering the true cost of stunting to the private sector – and how tackling it can save lives, as well as boost profits

With global food, fuel and fertilizer prices soaring, WFP predicts that the 276 million people already facing acute food insecurity, could rise to 323 million by the end of the year. The impending hunger and malnutrition crisis will have a huge impact both directly on lives lost but also on economies and wider progress in development. New research from The Power of Nutrition and Modern Scientist Global uncovers specifically the cost of stunting (children with low height for their age) to businesses’ bottom lines, as well as to workers’ incomes and the wider economy. 

Our new research (in partnership with Modern Scientist Global) reveals businesses in low and middle-income countries lose more than a quarter of a trillion dollars (up to $264.6 billion) in revenue every year, due to their employees experiencing chronic undernutrition in childhood. The study, which was published in The Lancet earlier this year, is the first to quantify the cost of childhood stunting to the private sector in emerging economies and offers pertinent insight with a huge global malnutrition crisis predicted by many, later this year.

Currently stunting (defined as low-height for age) affects more than one in five children globally. It’s caused by prolonged undernutrition in a child’s early years and as well as restricted physical development, it impacts educational performance and therefore causes lost productivity for wider society.

The link between malnutrition and economic growth isn’t something new – it’s widely accepted, but the research aimed to quantify this specific link and understand the true cost to the private sector for the first time, hopefully acting as a catalyst for action to improve nutrition in countries where it’s most needed.

The research found:

• The private sector loses more than a quarter of a trillion dollars each year (up to $264.6 billion).
• Workers lose up to 20% of their annual income.
• Countries lose up to 10.1% GDP.

The research confirms malnutrition reduces the development of an entire society. Workers who were stunted as children earn less as adults, are less productive, and have limited purchasing power to sustain themselves and their households. Looking at a particular country, we can see in Ethiopia, the data shows garment factory workers lose up to 18% of their already low average $50 monthly salary due to stunting. Reduced disposable income increases the chances of malnutrition and poverty repeating in further generations, as well as leading to reduced business returns and stagnant economic growth.

So what can be done? Well the research also showed that investment in stunting reduction efforts today is highly productive. In fact, it offers some of the highest returns in development, with $1 invested annually potentially yielding up to $81 for national economies – that’s a huge 8,000% ROI.

Businesses have a responsibility to play a part and create sustainable change among the communities they operate in. Through collaborating with each other and the public sector, they can deliver nutrition responses that tackle both the immediate causes of undernutrition, as well as addressing the complex, underlying causes of undernutrition.

Supporting good nutrition in their own workforce (e.g. supporting mothers at work and encouraging health eating) is one direct step, funding nutrition programmes, such as those of The Power of Nutrition in countries with the highest prevalence of malnutrition where they may operate, is another. For immediate impact and in response to the looming malnutrition crisis, we’ve launched a Global Malnutrition Crisis Appeal – donations to which are matched dollar for dollar and go directly to supporting the most vulnerable women and children in our programmes across Africa and Asia.

Despite recent progress made globally in tackling stunting, global malnutrition rates are now on the rise, driven by the impact of Covid, climate change, conflict and the related cost of living crisis. In parallel, global overseas aid for nutrition is in decline and, despite the Tokyo 2021 Nutrition for Growth Summit mobilising $27 billion in investments for nutrition, an annual $10.8 billion funding gap for nutrition remains – this grows everyday with global inflation.

The research should be a wake-up call for businesses in low- and middle-income countries, and beyond. We already know stunting is a life-sentence for impacted individuals. This new data shows it is also a huge cost to businesses and economies. Tackling stunting should be a leading priority for business now more than ever, to transform lives as well as profits.