By Liam Crosby, Senior Programme Development Manager, ShareAction
AGM season is in full swing.
This year, we’ve seen an increasing focus on health, with a range of shareholder resolutions focusing on companies’ actual and potential health impacts.
These resolutions show an increased appetite from investors to focus on the health impacts of their stocks. But progress shouldn’t stop here - investors now have a critical opportunity to build long-term action on health.
Covid-19 shone a spotlight on health – leaving companies nowhere to hide
The Covid-19 pandemic has emphasised and exacerbated huge health inequalities. It showed us just how vital good health is to economic stability.
After decades of many companies having a damaging impact on health – of customers, workers and local communities – corporate behaviour is in the spotlight.
It's time companies take responsibility for the health externalities they create. Failing to do so will leave them increasingly vulnerable to shifting public policy, such as sugar taxes or the tightening of legislation on gambling and worker standards.
It also leaves them on the wrong side of consumer demand for companies to address the environmental and social impact of their business. In other words: it’s good business to be a healthier business.
This year’s AGM season shows investors are also taking note, with increasing numbers of resolutions on health.
Investors are already waking up to the risks of inaction. And this year’s AGM season has seen an increased focus on health.
Here’s just three examples of how investors are pushing for a healthier world:
1. A call for healthier food sales at Tesco
This year, we joined a coalition of institutional investors with £140bn in assets, as well as over 100 individual shareholders to file a resolution at the UK’s largest supermarket.
It called on the supermarket giant to set targets on healthier food sales.
The company responded with a concrete commitment to increase its share of healthier foods to 65% by 2025 at its UK-branded stores – with additional commitments covering Central Europe, and its Booker group of local corner shops.
Given the huge role that supermarkets play in shaping what we eat, this will have significant health impacts in the UK and beyond.
2. Investors up the pressure on McDonalds on anti-microbial resistance
Coming up next week is McDonald’s AGM, where one resolution addresses the threat of anti-microbial resistance, which a recent report estimates could kill 10 million per year by 2050.
The resolution asks the fast food company to capture, and report on, the external public health costs created by the use of antibiotics in its supply chain.
This novel approach, advocated by the Shareholder Commons, focuses on how the real-world public health impacts of businesses ultimately creates systemic risk to other parts of investors’ portfolios.
The resolution – co-filed by Responsible Investment Network -Universities member Trinity College Cambridge – argues that addressing externalised public health costs will protect the interests of McDonalds’ own diversified shareholders. This focus on real-world health costs being picked up by other parts of the economy is echoed in resolutions on sugar at Pepsico and unhealthy food at CVS.
3. A spotlight onworker health at Walmart
It’s not just their customers’ health that business can influence.
Workers’ health has been at the forefront during the pandemic. One resolution at Walmart called for an extension of sick-pay beyond the pandemic – something that’s essential to allow workers to seek healthcare and recover when they’re unwell.
Another resolution at the retail giant calls for a Pandemic Workers’ Advisory Council to advise the company on how to create a secure and safe workplace. Plenty of evidence shows that increasing workers' voice is crucial for helping companies to making work healthier as well as safer.
What next for investor action?
These are just three resolutions that show the interest investors are taking in the health impacts of their stocks. For more key resolutions to watch – covering health and more – check out our 2021 Resolutions Watchlist.
But investor engagement on the topic of health shouldn’t stop here. As the immediate threat of Covid-19 subsides, it will be important not to let health concerns fall of the agenda.
If 2020 showed us anything, it's that early action on systemic risks is vital to build resilience against future shocks.
That’s why at ShareAction we’re developing a programme to build on this momentum and make the investment system work for people’s health.
This year, we’ll be looking to build a coalition of investors to lead the way. To find out more or talk to us about being involved, click here!