Summary:
- A group of shareholders is urging major food and beverage companies to enhance transparency regarding how their products impact consumer health. This initiative is seen as a crucial first step in holding corporations accountable for their significant influence on public health.
- Investors have called on top executives from Coca-Cola, PepsiCo, Kraft Heinz, General Mills, Mondelez International, and Kellanova to adopt a globally recognized nutrition rating system that discloses the healthiness of their offerings. The letter also emphasizes the importance of yearly disclosure of “healthiness metrics” for their products.
- Responsible investment nonprofit ShareAction is leading the effort, with support from over 30 investors and asset managers managing a combined $3 trillion in assets. Notable backers include Mercy Investment Services, Trinity Health, Greenbank, Nest, and the Socially Responsible Investment Coalition.
Insight:
The signatories of the letter have highlighted poor health as a systemic risk that can negatively impact productivity worldwide, ultimately affecting long-term financial returns on investments.
According to a study, the global economy could face a cost exceeding $4 trillion by 2035 due to an obesity epidemic if preventive measures are not improved. This projected impact is comparable to the economic consequences of the COVID-19 pandemic in 2020.
The letter emphasizes that an over-reliance on selling unhealthy products contributes to poor consumer diets, adverse health outcomes, and overall societal health challenges, posing avoidable risks to companies and investors.
The supporters of the letter advocate for prioritizing healthier products as a means to create long-term financial and social value for businesses, investors, and consumers alike.
The shareholders have urged the six food and beverage giants to embrace globally recognized Nutrient Profiling Models (NPMs) to classify products based on nutritional content, aiding in the identification of unhealthy items and disease prevention. Recommended NPMs include the Health Star Rating system, Nutri-Score, and the UK NPM.
Furthermore, the companies are requested to disclose the sales-weighted average NPM score of their entire global portfolio annually. These scores should be categorized by product type, total revenue from NPM-assessed products, and the percentage of sales from “healthier” versus “less healthy” items based on the NPM used.
A significant portion of the letter’s signatories are part of ShareAction’s Long-Term Investors in People’s Health Initiative, advocating for health considerations as a responsible investment focus.