is the Charles E. and Susan T. Harris Professor, a Professor of Finance, and the Director of the Laboratory for Financial Engineering at the MIT Sloan School of Management.

Andrew W. Lo, PhD

Brains are the indispensable drivers of human progress, but brain health issues can wreak havoc on society. Consider the devastation of disorders like depression, anxiety, and Alzheimer disease—which cost the economy trillions each year. There are currently 

 to Environment, Sustainability, and Governance (ESG) investing around the world. If only a portion of these funds were diverted into brain health, they could produce major improvements for our society.

The cost of mental disorders and dementia has shown us the disproportionate vulnerability of the elderly and disabled, and caused us to refocus on brain health. Brain health challenges exist across the life span from development disorders in the young, to multiple sclerosis and trauma in midlife, to stroke, Alzheimer disease, and Parkinson disease in later life. These conditions—coupled with the disorders of depression, schizophrenia, and bipolar illness—account for a tremendous cost to society and cause untold individual suffering. Beyond these familiar diagnoses, there are a plethora of other impediments to good brain health. Poor nutrition, limited exercise, and poor learning environments all keep individuals from reaching their brain health potential. As just one example, 

 found that in the state of Texas alone, over $2.2 billion is lost by not treating mothers’ mental health issues from pregnancy until their child is 5 years old. These problems can be remedied only at the social, political, policy, and diplomatic level.

Financial investments in ESG have grown tremendously over recent years. Many companies are investing in businesses that prioritize sustainability-related disclosures, business practices, and plans. Transitioning to a greener, more sustainable economy will also require adaptability, new skills, collective problem solving, and other brain skills.

There are some examples of prioritizing health interventions in the ESG field. For instance, the Culture of Health for Business (

) program was developed as a partnership between the Global Reporting Initiative and the Robert Wood Johnson Foundation. Likewise, a 

 was recently published by the World Economic Forum and Willis Towers Watson. This framework aims to quantify and build human capital within large organizations that have historically struggled to do so, due to the intangible nature of strong corporate culture, stakeholder leadership, and employee well-being.

Unfortunately, neither approach pays much attention to brain health. This is a missed opportunity. Brain-focused investing can help advance the ESG agenda, especially now that rates of 

stigma against mental health care are dropping

 due to the wide-spread understanding of COVID social- and physical-distancing.

 to provide a framework for organizing and accelerating existing projects, both public and private. The term Brain Capital is used to evoke the importance of valuing, investing in, and safeguarding our mental assets.

There are some promising trends to note. Venture capital investing in mental health technologies neared 

 in 2020—with strong growth projected in 2021. There are a number of 

 companies now in the mental health technology field. 

 are being trialed in the mental health field. The 

 is pioneering health brain bonds to raise $10 billion for brain health research. 

 models have been developed to accelerate Alzheimer disease therapeutics. Large information technology companies are developing product and service portfolios in the brain health field (eg, 

). There are niche ESG-focused exchange traded funds, such as those focused on 

, which provide predicates for focusing on issues of the brain.

Imagine a world without mental suffering. We would be flourishing—fulfilled, connected, resilient, and accomplishing meaningful and worthwhile tasks that would be good for individuals and the planet.

is an associate with the PRODEO Institute and Thiel Fellow at Stanford University.

is an MD candidate at David Geffen School of Medicine at UCLA.

is a research professor and Director of Chambers-Grundy Center for Transformative Neuroscience at the University of Nevada, Las Vegas.

is Senior Advisor to the OECD Secretary General and Head of the New Approaches to Economic Challenges Unit at the OECD.

is cofounder of the PRODEO Institute, adjunct associate professor with IMPACT at Deakin University, and co-lead of the OECD Neuroscience-inspired Policy Initiative.

Articles

Devoting funds to better benefit brain health could improve society as a whole. 

Andrew W. Lo, PhD

Articles

A Brainier Approach to ESG Investing