Food and drink giants under pressure to act on public health

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 NGO stated.

The investors include Legal & General Investment Management, Pictet Asset Management, Nest, and CCLA, who collectively manage £2.34trn in assets. In a letter delivered today (21) to the chief executives of PepsiCo, Coca-Cola, Mondelēz, Kraft Heinz, Kellanova, and General Mills, investors have called on the companies to follow the likes of Unilever and Danone in adopting internationally-accepted nutrition standards for publicly reporting the healthiness of their sales.

The investors have raised concerns that an over-reliance on sales of less healthy products leads to poor diets and sicker societies, which they claim harms economic productivity and threatens long-term business success and financial returns. The investors added that a lack of transparency hinders their ability to fully assess risks and opportunities.

“We believe that health is a systemic risk that affects the whole economy,” said Tom Sanders, Senior ESG Analyst at Nest. “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.”

The move comes amid an increasing focus by governments and consumers 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 £3.34trn 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 adopting one or more of the internationally accepted Nutrient Profiling Models used to define healthy food, rather than their own in-house versions.