A coalition of Nestlé shareholders, co-ordinated by ShareAction, the responsible investment NGO, has filed a resolution challenging Nestlé to dramatically improve its impact on people’s health.
The shareholders are urging the food giant to set a target to increase the proportion of its sales from healthier products, amid concerns over the regulatory, reputational and legal risks to the company, and public health impacts associated with an over-reliance on less healthy foods.
The shareholder coalition is calling on Nestlé to implement internationally accepted standards that define healthy food rather than deviating from credible guidelines.
Investors with $1.68 trillion in assets under management, including Legal and General Investment Management, Candriam, and La Francaise Asset Management, are supporting the resolution, which will be voted on at Nestlé’s Annual General Meeting on 18th April.
Catherine Howarth OBE, Chief Executive at ShareAction said:
“Nestlé is the biggest food company in the world and has an enormous influence on billions of people’s diets and lives through the products it makes, advertises and sells to us.
“While the company claims in its mission statement that its products have ‘the power to enhance lives’, in reality three quarters of Nestlé’s global sales are unhealthy products containing high levels of salt, sugar and fats.
“As Nestlé has consistently failed to set out how it will shift the balance of its sales towards healthier food options, concerned investors have been left with no option but to bring forward a resolution at the company’s AGM in April.
“Any move away from sales of unhealthy products by Nestlé will inevitably support healthier communities all over the world and in the long-term help economies too.”
Last September, Nestlé published a new nutrition target to sell ‘more nutritious’ products by 2030, but it fell far short of investor expectations for the company in improving public health:
• The ‘nutritious’ sales target is simply in line with Nestlé’s overall expected growth and makes no commitment on the sales of unhealthy products, which could increase at a similar rate. This would not shift Nestlé’s reliance on sales of unhealthy products.
• The target also included products such as coffee, which has no nutritional value, and is inconsistent with the nutrient profile model Nestlé has chosen. This makes its disclosure incomparable with other manufacturers, and means Nestlé could achieve its health target simply by selling more coffee.
The WHO reports that unhealthy diets are a key factor behind the global growth in rates of obesity, increasing the risk of diabetes, heart disease, stroke and some cancers. It is estimated that obesity will cost the global economy $4.32 trillion a year by 2035.
ShareAction’s Healthy Markets investor coalition has been in dialogue with Nestlé and other large food manufacturers to drive the sector to produce healthier food options for all as a responsible contribution to addressing the health of consumers.
Maria Larsson Ortino, Senior Global ESG Manager at Legal & General Investment Management (LGIM)
said:
“There is a clear link between a poor diet and chronic health conditions, such as obesity, heart disease and diabetes. As a long-term investor, LGIM believes that healthcare costs and decreased productivity have significant negative consequences on our clients’ assets across multiple sectors.
“Following Nestlé’s health target announced last year, we publicly noted that we were disappointed that the Company had not taken the opportunity to set a specific, measurable and proportional target to increase sales from products that meet healthy thresholds.
“Since the publication of the target, we have had additional engagements with Nestlé but consider the dialogue to have come to an impasse. We therefore deemed the next appropriate step to be to co-file this shareholder proposal. We want to press home to the Company, and to the food and beverage sector as a whole, the importance we place on nutrition.”
Notes to Editors
The full resolution text can be read here and the list of co-filing investors is below:
Co-filers: Legal and General Investment Management (LGIM), Candriam, La Francaise Asset Management, VGZ, and Guys and St Thomas’s Foundation
A global study across seven markets found that 75% of Nestlé’s food and drink sales in 2020 was made up of unhealthy products, as published in Globalization and Health journal article in December 2023.
The majority (70%) of Nestlé’s sales in the UK are from foods that are high in fat, salt and sugar, according to new research by Oxford University and BiteBack.
Nestlé has chosen to count as ‘nutritious’ products to its target, plain coffee, commercial baby foods (for over 12 months), vitamin and mineral supplements and medical nutrition.
