The Access to Nutrition Initiative

October 19, 2022
ESG Insights

Food and Nutrition – an important focus for Responsible Investment

Ethical Partners firmly believes that healthy Food and nutrition is an important area through which companies and responsible investors can have a real impact on numerous critical sustainability goals, including human rights, children’s rights, the SDG’s, and even the climate and natural capital crisis.

Australia currently faces a crisis of nutrition, with 67% of adults and around 24% of children classified as overweight or obese (ABS, 2022), with clear ramifications for chronic disease rates, ill health and future mortality. Meanwhile, serious pockets of malnutrition exist in First Nation’s communities, and the current cost of living, inflation and geopolitical crises are exacerbating a lack of access and affordability of good food choices for an increasing number of Australians.

The right to nutritious and healthy food is, however, implicit with the fundamental right to health under numerous international instruments to which many companies and responsible investors are aligned, including the Universal Declaration of Human Rights, and the Convention on the Rights of the Child, placing clear obligations to ensure that the impact of their operations and our portfolios on health and nutrition is positive.

Unfortunately, recent research conducted by Ethical Partners in conjunction with UNICEF Australia found that 60% of S&P/ASX 200 companies for whom healthy food should be a relevant consideration did not publicly disclose a focus on this area. Additionally, this research also found that only 6% of S&P/ASX200 companies disclosed a responsible marketing commitment – a crucial consideration for protecting children’s rights, when research has shown that the average Australian child is exposed to at least 827 unhealthy food advertisements on TV a year.

It is clear then that there is a long way to go, and a real opportunity for a proactive and ambitious approach across the Australian market to protecting the right to health for all Australian consumers.

It is also important to note that these challenges are taking place within a context of climate change and natural capital degradation, and is therefore a relevant consideration for all investors who are aiming to integrate sustainable agriculture and circular economy considerations into their analysis and engagements. For example, it is clear that heavily processed foods are not only less nutritious, but also have a greater environmental and packaging impact. In addition, considerations such as soil quality and biodiversity are crucial to ensuring the continued nutrition levels of our food supply.

Responsible investors should also be aware of and engaging with their portfolio companies about the rapidly increasing regulation and legislation (such as sugar taxes, or the impending UK regulations on limiting the promotion of unhealthy foods), new shareholder resolutions regarding healthy food (such as the recent Tesco resolution) and increasing consumer expectations and risks for companies who are failing to understand their social licence and responsibility to proactively address their impact on food and nutrition.

As such, responsible investors can all play a greater part in ensuring that our food manufacturing and retail portfolio companies ensure greater access to healthier food options and formulations, as well as ensuring that their labelling, marketing, promotions and consumer education all adhere to responsible marketing codes and a clear focus on protecting health.

Companies should ideally be setting clear targets regarding these responsibilities across their value chains, and ensuring that there is a clear governance responsibility for this issue. Investors can also engage with companies to ensure that their wider policy advocacy and industry collaborations are supporting optimum health and nutrition.

Pleasingly, our engagements with ASX listed companies on this topic have identified a few companies who have shown positive momentum in this space, such as our portfolio company Woolworths, who have clearly identified health and nutrition targets within their 2025 Sustainability goals, including reducing salt, sugar and saturated fat in their own brand products, ensuring clear and transparent labelling and health star ratings and targets on marketing to children. Woolworths is also actively collaborating with UNICEF, the Children’s Hospital and several other public health, industry and government initiatives on health and nutrition research, innovation and policy. Ethical Partners engagements with Woolworths CEO have also clearly shown a deep commitment for this issue at senior management level, which is very pleasing to see.

Likewise, another portfolio company, Bega, is prioritising product reformulation and innovation to align with nutritional profiling standards, with clear food nutrition targets to remove 15 tonnes of salt from food products by 2023 and reduce sugar by 10% in Bega Peanut Butter by 2023. Bega has also set targets for 85% of their product portfolio to be classified in the “best” and “good” nutrition categories by 2025. Additionally, Bega clearly discloses their commitment to the Association of National Advertisers Code of Conduct on Marketing to Children, including their commitment not to advertise unhealthy food to children under 12, including by using popular personalities or characters, advertising in schools, seeking product placement targeting children through interactive games or premium offers, or otherwise advertise unhealthy food to children under 12.

We continue to engage with Woolworths, Bega and other ASX listed food retailers and manufacturers on their impact and advocacy across their wider supply chains, and particularly in their consideration of child rights within their approach to food and nutrition through our continued advocacy work with UNICEF.

Ethical Partners is also signatory to the Investor Expectations on Nutrition, Diet and Health, more information on which can be accessed here. This document helps to guide the areas in which we focus our analysis and engagements with companies on these issues, including our expectations for how the company addresses health and nutrition in their governance, strategy, lobbying and transparency.

As always, with a global and system wide issue such as health and nutrition, collaboration is vital, so we would also encourage other interested stakeholders to reach out to initiatives such as the Access To Nutrition Initiative, or other public health and civil society groups in this space to their stakeholder voice to a greater focus on improving the impact of Australian companies on health and nutrition.


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