23 October 2020

Why investor appetite is critical to tackling obesity

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Ainslie Ballinger, Network’s Account Manager and Registered Nutritionist / ainslie@nwkcom.co.nz

Here in Aotearoa, finding solutions to our high obesity rates has always been contentious – something Judith Collins found out when airing her views on the election campaign trail.

The Opposition Leader was swiftly reminded, the solutions conversation here in NZ has moved on somewhat from “it’s your own fault if you're fat” – it’s more widely accepted that there are many forces at play when it comes to our size and, by consequence, our health.

It does seem, however, that the discussion about solutions here still very much focuses on the same small number of options (often in isolation) that have been talked about for decades.  

I’m not suggesting that these solutions don’t still have a place or validity, but it would be great to see our horizons expand and to think more broadly about how we engage with the entire food system, and the economic, infrastructure, education and community systems, which could ultimately benefit our health.

So, in search of finding out more about ideas not yet debated on our shores, I spoke with my former colleague Ellie Chapman, Head of Food and Health at ShareAction UK on how obesity is being looked at through the lens of responsible investment strategies.

What is ShareAction trying to achieve in terms of obesity and how are you going about it?

For 15 years, ShareAction has driven responsibility into the heart of mainstream investment through research, campaigning, policy advocacy and public mobilisation.

Our Healthy Markets campaign, which is funded by UK Urban Health Foundation Guy’s and St Thomas’ Charity, seeks to reduce obesity rates by working to make healthier products more available and affordable. We work with a growing coalition of investors, with a combined total of USD$1 trillion assets under management, to ask food and drink companies to produce and promote healthier, more affordable products.

What does responsible investment mean in the context of the food system?

Responsible investment means integrating environmental, social and governance (ESG) factors in investment analysis and decisions. In the context of obesity, this should mean investors engaging with companies on their strategies to promote and enable healthier diets for consumers.

With future regulation on unhealthy foods expected, prudent investors should be ensuring that the food and drink companies they invest in are staying ahead of regulation and changing consumer demands.  But beyond that, tackling obesity is also fundamental to some of the most pressing health and nutrition-related Sustainable Development Goals set by the UN.

Investors should expect businesses to be considering their role in improving food environments and ultimately in reducing child obesity. Most simply, this looks like a long-term strategy for business to decouple their growth from the promotion of unhealthy products.

The expectation is for businesses to do two things:

  • Make their product portfolios healthier by reformulating products or acquiring healthy brands.
  • Increase the volume of sales of healthy products.

What do investors see as the benefits for engaging in responsible investment around food and health?

We are in the middle of an obesity epidemic – and it is widely accepted that this is being driven by a lack of affordable, accessible healthy food and by the heavy promotion and marketing of unhealthy options.

As COVID-19 has brought public health discussions to the fore, food and drink companies will increasingly find themselves at the centre of attention from policy makers, regulators, society and customers. This means it is crucial for investors in the food and drink sector to understand companies’ actions and risks in this area to drive improvements.

The companies we work with, primarily food retailers, recognise the need for them to play a role in improving the food environments children are exposed to. Our work gives them a framework in which to make such improvements and offers a level playing field across the sector.

Obesity throws up a range of investment-related risks and opportunities, whilst also offering pension funds and other long-term investors opportunities to advance their beneficiaries’ and the public’s broader interests.

What do investors perceive as the barriers to engage around the issues of food, health and obesity?

There are of course a number of very important ESG themes for investors to consider outside of food and health, and it can be challenging for investors to prioritise the themes that are most important for the companies in their portfolio.

There is also currently a lack of data for investors to be able to take meaningful action in the food and drink industry. Food retailers, for example the UK’s largest supermarkets, are struggling to publish useful and comparable information on how they are addressing their role in creating healthier environments.

What are the hopes for the programme in the years ahead, considering the global health and economic situation?

As the importance of reducing obesity becomes even more apparent, it is our intention to expand our Healthy Markets campaign to cover additional markets that influence children’s diets such as the out-of-home sector.

We are also expanding our remit to cover broader public health and social themes through a new programme called ‘Long-term Investors in Public Health’ (LIPH). LIPH will build a coalition of investors committed to building a healthier society and reducing health inequalities. COVID-19 has reminded us all how much individual and societal health matters, and how intrinsic it is to our economic wellbeing.

At ShareAction, we want to capitalise on this moment and ensure that businesses, and their investors, play a crucial role in ensuring we achieve a healthy recovery. We are currently in the scoping stages of this work and will launch this programme in early 2021.