(Thursday 21st November) Shareholders in food and drink giants such as PepsiCo, Coca-Cola and Mondelez are among a group of investors calling on the sector to be more transparent about the healthiness of its sales as a first step towards taking accountability for its significant impact on public health, in a move coordinated by responsible investment NGO ShareAction.
The investors, including Legal and General Investment Management, Pictet Asset Management, Nest and CCLA, who collectively manage £2.34 trillion in assets, have today written to the chief executives of PepsiCo, Coca-Cola, Mondelez, Kraft Heinz, Kellanova and General Mills, asking them to follow food companies such as Unilever and Danone in adopting internationally-accepted nutrition standards for publicly reporting the healthiness of their sales.
The investors are concerned that an over-reliance on sales of less healthy products leads to poor diets and sicker societies, which harms economic productivity and threatens long-term business success and financial returns, and that a lack of transparency hinders their ability to fully assess risks and opportunities.
Tom Sanders, Senior ESG Analyst at Nest, said: “We believe that health is a systemic risk that affects the whole economy. The increased consumption of unhealthy products harms public health and could reduce worker productivity, creating externalities that can impact our long-term investment returns as a globally diversified investor. Food and drink companies must take responsibility in helping manage these risks by being more transparent, using internationally recognised nutrition standards as an important first step.”
This comes as there is increasing focus from governments and customers on the food and drink sector’s reliance on sales of foods that are high in fat, salt and sugar. Around one in eight people globally are living with obesity, including millions of children, which is projected to cost the global economy more than £3.34 trillion a year by 2035.
Thomas Abrams, Co-Head of Health at ShareAction, said: “It’s really encouraging to see the momentum building among the investment community to hold the food and drink sector to account for its impact on public health. By adopting a responsible investment approach to public health investors can not only manage financial risks but also help more people to enjoy healthier lives for longer.”
ShareAction and the investors are asking the food and drink companies to commit to:
- Adopt one or more of the internationally accepted Nutrient Profiling Models used to define healthy food, rather than their own in-house versions
- Enhance transparency through regular reporting of metrics on the healthiness of sales and products, so that shareholders and customers can hold them to account for their impact on public health
Most of the investor signatories are part of ShareAction’s Long-Term Investors in People’s Health initiative, which encourages the integration of health as a responsible investment theme to help build healthier, fairer societies.
Sophie Lawrence, Stewardship and Engagement Lead at Greenbank said: “Diet-related ill health poses risks on many levels, including material financial risks for companies, investors and the wider economy. As investors, we need access to good quality, comparable data on company health-related impacts to understand this risk. Where companies are reporting, they are often disclosing different metrics and using varying definitions of what constitutes a ‘healthy’ product.
This hinders the ability of investors and other stakeholders to compare performance across the sector, hold businesses to account and accurately understand what progress is being made as well as importantly analyse the risks and opportunities facing companies. It is vital that reporting requirements are introduced on a mandatory basis, as voluntary initiatives have failed to drive the necessary scale of change required."
Notes to editors
The letter text can be read in full here: https://shareaction.org/report...
The investors that have signed the letter are Achmea Investment Mangement, Adrian Dominican Sisters Portfolio Advisory Board, Barrow Cadbury Trust, Cardano Group, CCLA, CommonSpirit Health, Congregation of St. Joseph, CMA Impact, Daughters of Charity of Province of St Louise, EQ Investors, FutureSuper Group, Greenbank, Guy’s & St Thomas’ Foundation, Jesuits in Britain, J Stern & Co, La Banque Postale Asset Management, Legal and General Investment Management, LifeArc, Mercy Investment Services, NEST, OFI Asset Management, PensionBee, Pictet Asset Management, PIRC, Region VI Coalition for Responsible Investment, Seventh Generation Interfaith Coalition for Responsible Investments, Sisters of the Humility of Mary, Stichting Pensioenfonds ING, Socially Responsible Investment Coalition, Trinity Health, and VGZ.
In 2023 The World Obesity Federation said the economic impact of overweight and obesity on the world is set to reach $4.32tn—nearly 3% of global gross domestic product—annually by 2035.
Last week, the Food Foundation’s State of the Nation Food Industry report identified that only 1 in 4 major UK food businesses has a healthy sales target and discloses data on the healthiness of their sales.
Earlier this month, an Access to Nutrition initiative (ATNi) report from November showed that the world’s largest food and drink makers derive just 34% of their sales from products classified as ‘healthier’.
The UK House of Lords Food Diet and Obesity Committee recently launched a report calling on the Government to develop a comprehensive long-term strategy to fix the UK’s broken food system. One of the key recommendations was to make large food businesses report on the healthiness of their sales. Investors gave oral and written evidence to the Committee via the Investor Coalition on Food Policy.
There is strong public support for a responsible approach to investing that protects people and planet. Almost three quarters (73%) of people in the UK believe that banks, pension funds and investment firms should consider environmental and social issues alongside profits, according to a YouGov poll in 2023.
