In an unprecedented move, a coalition of shareholders led by ShareAction, a responsible investment NGO, has lodged a resolution with Nestlé, the world’s largest food company, demanding a significant shift towards healthier products.
Source: shareaction.org
The action is backed by investors with $1.68 trillion in assets under management, including industry heavyweights such as Legal and General Investment Management, Candriam, and La Francaise Asset Management. These shareholders are pressing Nestlé to bolster the proportion of its sales derived from healthier offerings, citing the looming regulatory, reputational, and legal risks the company faces due to its reliance on less nutritious foods.
The resolution, will be put to the vote at Nestlé’s Annual General Meeting on April 18th, and insists on the adoption of globally recognised standards for defining healthy foods.
Catherine Howarth OBE, Chief Executive of ShareAction, says the food giant has a responsibility to produce and sell healthy food products.
“Nestlé is the biggest food company in the world and has an enormous influence on billions of people’s diets and lives through the products it makes, advertises and sells to us. While the company claims in its mission statement its products have ‘the power to enhance lives’, in reality, three quarters of Nestlé’s global sales are unhealthy products containing high levels of salt, sugar, and fats," says Catherine Howarth.
Despite Nestlé's announcement last September of a new nutrition target aiming to sell more ‘nutritious’ products by 2030, critics argue the plan inadequately addresses the issue of unhealthy product sales and incorporates non-nutritious items like coffee into its health targets. This strategy has been met with skepticism for not adequately shifting the company’s reliance on less healthy products.
Source: PFN Public Domain
Maria Larsson Ortino, Senior Global ESG Manager at Legal & General Investment Management, says Nestles current approach cannot continue. “There is a clear link between a poor diet and chronic health conditions, such as obesity, heart disease, and diabetes. As a long-term investor, LGIM believes healthcare costs and decreased productivity have significant negative consequences on our clients’ assets across multiple sectors," says Maria Larsson Ortino.
With the WHO identifying unhealthy diets as a key driver behind the global rise in obesity and related diseases, the pressure on Nestlé to reformulate its product portfolio reflects a broader demand for the food industry to contribute responsibly to public health.
As the AGM approaches, the resolution from ShareAction and its coalition partners marks a pivotal moment in the ongoing dialogue between Nestlé and its investors regarding the company’s health impact and nutritional standards.
If the resolution is successful other multinational food companies will all be on notice to tighten-up their healthy product policies or face shareholder demands.
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ENDS.
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