Human Development Pillars Explained

The United Nations Human Development Index (HDI) was created ‘to emphasise that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone’.

The Human Development Index works well as a high-level measure. Countries that score well on it tend to be delivering for their citizens; the reverse also holds true. However, like all metrics it has its limitations. Many companies that the portfolio managers believe contribute to human development and to positive social outcomes do not map directly to any of the index’s constituent components – income, education and health. So they spent time thinking about how they could expand this idea.

Taking inspiration from many different sources, the Portfolio Manager determined 12 broad pillars¹ that they believe encapsulate the essence of human development.

These pillars cover a range of areas that they believe to be central to the spirit of sustainable human development – and quality of life – for people around the world, particularly in emerging markets. Most are self-explanatory and link back in clear ways to Amartya Sen’s concept of ‘development as freedom’² and the Human Development Index.

Some of the contributions that the companies the Trust invests in are making may not seem groundbreaking but they are no less powerful or important to sustainable human development.

They include the provision of essential medicines in Bangladesh, mortgages to first-time buyers in India, gas cookers in rural China and safe low-toxicity paint in India. All of these are helping and will continue to help hundreds of millions of people in emerging markets to live longer, better and healthier lives.