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Unilever shareholder campaign secures industry-leading transparency on nutrition

$215 billion investor coalition drives up health disclosure standards with global food manufacturer.

(Monday 7th March, London) Unilever has today committed to set a new benchmark for public reporting about the healthiness of the food it sells. It will now measure the sales of its products against major government-endorsed Nutrient Profile Models as well as its own internal metric.

This is important because Unilever has always maintained that its products are healthy, using its own definitions of that term. Last year it said that 61 per cent of its food and drink sales were derived from products with “High Nutritional Standards”. But an independent review from the Access to Nutrition Initiative (ATNI) estimated the figure to be just 17 per cent. As such, Unilever’s commitment to use independent benchmarks going forward will provide far greater clarity to shareholders and consumers on its impact on public health.

This announcement follows months of engagement with an international coalition of institutional investors and individuals co-ordinated by ShareAction, who in January filed a shareholder proposal urging the company to disclose against government-endorsed health models and adopt ambitious targets to increase the share of healthy foods in its sales.

Institutional investor members of the co-filing group included pan-European asset manager Candriam, Dutch asset manager ACTIAM, US healthcare provider Trinity Health, and the UK’s Guy’s & St Thomas’ Foundation, CCLA Investment Management, and Greater Manchester Pension Fund. Meanwhile, individual co-filers comprised Unilever customers, parents, medical professionals and health campaigners.

In response to their demands, Unilever agreed to publish annual assessments of the healthiness of its products on a global basis as well as for 16 key strategic markets, in line with government-endorsed nutritional criteria. The first report will be published in October 2022. It also agreed to set stretching new targets for growing the proportion of its healthier products by October in advance of its 2023 AGM and to submit these targets to shareholder scrutiny.

Importantly, the enhanced disclosures form a new precedent for transparency in reporting for food manufacturing companies.

The latest assessment from the Access to Nutrition Initiative estimated that less than a third of all packaged food and drink products can be classified as healthy based on a government-backed definition. The investor group are hopeful that Unilever’s example will stimulate progress in the quality of health reporting across the sector, leading to greater action from global food manufacturers to tackle systemic malnutrition through the provision of healthier products.

Unilever has also pledged to continue constructive engagement between board-level company representatives and the shareholder group, in the months leading up to the announcement of its targets and disclosures and beyond to 2024 as these are developed and implemented.

ShareAction’s Healthy Markets investor coalition will have a key voice in this ongoing process. Having withdrawn the resolution in acknowledgement of Unilever’s commitments, the group has indicated they will explore the possibility of further action if the expected outcomes are not met.

Louisa Hughes, Engagement Manager at ShareAction said: “We welcome Unilever’s willingness to engage with the shareholder group and we are pleased to see their commitment to set stretching targets to increase their sales of healthier products in response to our proposal. The next seven months are crucial for ensuring that this commitment is translated into ambitious long-term goals, with concrete policies to deliver these. We encourage investors to make their expectations known to the company. Whilst our resolution has been withdrawn, we may consider further action next year if we are unsatisfied with the company’s progress.”

Kieron Boyle, Chief Executive at Guy’s & St Thomas’ Foundation said: “Healthy and affordable food is good for everyone. As a long-term investor focused on people's health, we are glad to see Unilever raising its ambition on disclosure and submitting itself to greater scrutiny from its stakeholders when it comes to the nutrition of the products that it sells. We look forward to engaging closely with Unilever on the development and implementation of the commitments it has made to accelerate its positive impact on all our health.

Cllr Gerald Cooney at Greater Manchester Pension Fund said: “As one of the largest food manufacturers, Unilever has a real opportunity to tackle rising obesity levels around the world. In the UK, poor diets are one of the biggest drivers of ill health and widening inequalities across the country. In this context, we welcome the announcement made by Unilever today and we encourage the company to be ambitious as it fleshes out these commitments later this year.

Sophie Deleuze, Lead ESG Analyst, Engagement & Voting at CANDRIAM, said: “Unilever deserves credit for these important new health related commitments and for their constructive engagement with shareholders. These changes are a major leap forward for the food and beverage industry, setting a blueprint for others to follow, and they represent a paradigm shift in terms of transparency and disclosure. The company and investors can now better assess Unilever’s exposure to growing regulatory risk around personal health issues such as obesity, and investors can measure exactly how these healthier commitments translate into sales.

Amy Browne, Stewardship Lead at CCLA Investment Management, said: “Unilever’s new commitments mark a step change in the food manufacturing industry. The elevated level of transparency they afford will transform investors’ ability to assess the company’s resilience to changing health-related regulation and legislation around the world. Over time, we also expect to see tangible public health impacts as a result of these commitments. Today’s announcement cements the company’s position as a sustainability leader at the vanguard of corporate transparency, and highlights the power of extensive, constructive engagement.”

Cathy Rowan, Director for Socially Responsible Investments at Trinity Health, said: “I am confident that Unilever’s adopting and implementing these commitments will have a positive impact on public health and will encourage other food and beverage companies to take similar measures to increase access to nutrition.

Marie Payne, Responsible Investment Officer at ACTIAM, said: “As ACTIAM we see not doing harm to human health as one of the Fundamental Investment Principles. Therefore, we welcome the positive outcomes of the continued engagement discussions with Unilever. The transparency commitments made by Unilever as well as their promise to set new stretching targets for the sale of healthier products is setting a precedent for the industry and highlights the importance of health as a sustainable investment theme.

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