Investors urge Coca-Cola, Kraft Heinz, others to provide transparency on products’ health impact

Dive Brief:

• A coalition of shareholders is asking leading food and beverage companies to increase transparency on how their products impact consumers’ health. The group said this would be a “first step” towards corporations taking accountability for their “significant impact on public health.”
• Investors asked top executives from Coca-Cola, PepsiCo, Kraft Heinz, General Mills, Mondelez International and Kellanova to adopt an internationally accepted nutrition rating or scoring system that discloses the healthiness of their products in a letter released Thursday. The letter also urged the companies to increase transparency by annually disclosing “healthiness metrics” for their products.
• The letter is spearheaded by responsible investment nonprofit ShareAction and backed by over 30 investors and asset managers that collectively manage over $3 trillion in assets. These include Mercy Investment Services, Trinity Health, Greenbank, Nest and the Socially Responsible Investment Coalition.

Dive Insight:

The letter’s signatories called poor health a “systemic risk” that can adversely impact productivity across the global economy and, hence, affect long-term financial returns across investments.

The investors pointed to a study which found that an obesity epidemic is expected to cost the global economy over $4 trillion by 2035 if prevention and treatment methods do not improve. This, according to the study, would have a negative impact comparable with that of the COVID-19 pandemic in 2020.

“An over-reliance on the sale of less healthy products leads to poor consumer diets, negative health outcomes and sicker societies overall,” the Nov. 21 letter noted. “It also exposes companies and their investors to avoidable risks.”

Signatories backing the letter said prioritizing healthier products, by contrast, supports a “shared goal of creating long-term financial and social value for business, investors and consumers.”

The letters asked the six food and beverage giants to adopt globally recognized Nutrient Profiling Models, which classify food and drinks based on their nutritional content, ultimately helping to identify unhealthy products and preventing diseases. NPMs recommended include the Health Star Rating system, Nutri-Score and the UK NPM.

Additionally, the companies were asked to annually disclose the sales-weighted average NPM score of their entire global portfolio. The investors asked that those scores also be disclosed, sorted by: product category, total sales revenue generated from NPM-assessment eligible products and the percentage of sales from “healthier” versus “less healthy” products, designated according to the NPM being used.

The majority of the letter’s signatories are part of ShareAction’s Long-Term Investors in People’s Health Initiative, which advocates for the consideration and integration of health as a responsible investment theme.