Pension fund Nest and EQ Investors have joined ShareAction to raise the issue at the company’s AGM today (26 June), which will not take place physically due to social distancing restrictions.
The request follows the publication of a ShareAction report earlier this year, which identified ‘significant gaps’ in UK supermarkets’ ‘public commitments and actions’ to promote healthy eating and tackle childhood obesity. Research from Access to Nutrition Initiative (ATNI) found Tesco disclosed information on only 30% of indicators across topics such as product formulation, responsible marketing, affordability, clear labelling and corporate governance.
As part of its ongoing Healthy Markets’ campaign, backed by investors with $1 trillion in assets, ShareAction is asking supermarkets to define and publish comprehensive nutrition and health strategies to drive healthier food and drink consumption.
COVID-19 and the urgency of tackling obesity
According to ShareAction, the ongoing coronavirus pandemic has highlighted the ‘critical importance’ of tacking childhood obesity and supporting public health.
Obesity has been identified as an underlying health condition increasing the severity of COVID-19 cases. During the peak of the crisis, 73% of UK patients in ICU were overweight or obese, compared to 63% in the general population.
And, while retailers have demonstrated the crucial role in food security during the crisis, ShareAction believes that now is the time for them to step-up and help find solutions to the obesity pandemic. “Retailers have worked really hard to guarantee our food supply during the ongoing health crisis and their role in shaping people’s diets and health has never been more apparent,” Louisa Hodge, engagement manager at ShareAction, stressed.
“As the largest food retailer, Tesco has a critical role to play in rebuilding a healthier community in the UK post-COVID by supporting improvements to people’s diets and tackling childhood obesity.”
As well as highlighting the link between diet, obesity and health, COVID-19 has also served to exasperate inequity in the food system, Sarah Hickey, programme director for childhood obesity at Guy’s and St Thomas’ Charity, stressed.
“We know that many families struggle to access healthy, affordable food, and that COVID-19 has deepened existing inequalities in children’s diets. Commercial organisations - including food retailers - play a huge role in shaping what young people eat and improving children’s access to nutritious food.”
The Charity, which is a partner of the Healthy Markets campaign, backed the call for increased transparency from supermarkets. “We need supermarkets to be transparent about the actions they’re taking in this area, to drive further positive change that gives all young people access to the food they need to thrive,” Hickey argued.
The Healthy Markets coalition, spear-headed by ShareAction, want Tesco – and other retailers - to commit to disclosing the proportion of its sales made of healthy food and drink products and set ‘clear plans’ and ‘increasing year on year targets’ to grow this number.
Health is a ‘key investment risk’
Beyond the public good that could be delivered through corporate action to boost healthy food and drinks, Mais Callan, senior responsible investment manager at Nest, stressed that there is a strong investment case for promoting healthier diets.
The investment manager said that action now will help companies get ahead of the risk related to exposure to unhealthy categories – such as an increasingly interventionist regulatory environment. It could also provide a competitive advantage in the longer term, Callan continued.
“There’s a growing demand from governments to tackle the issue of obesity and a consumer trend towards healthier products. Sugar taxes, like the Soft Drinks Industry Levy in the UK, are being implemented around the world and it’s likely other measures will follow. Evidence from the COVID-19 pandemic is also showing that people with obesity-linked conditions are more likely to suffer serious complications. Health is emerging as a key investment risk,” Callan argued.
“We’re supporting ShareAction’s question because we think companies like Tesco have an important role to play in promoting a healthier product range. We believe companies that get ahead of the curve on this issue will have a better chance of long-term success.”
The idea that investors need to assess the risks and opportunities of corporate healthy eating strategies was echoed by Louisiana Salge, impact specialist at EQ Investors and member of the Healthy Markets coalition.
“As part of EQ’s Positive Impact Investment approach, one of our engagement aims this year is to raise awareness of the importance of health and nutrition in sustainable finance. Understanding the actions food retailers are taking to improve the nation’s diets is vital for investors to assess the associated risks and opportunities in this area. This is why we want to support their call on Tesco today to significantly increase its disclosure on this topic and set up measurable and comparable healthy eating targets.”