Food and nutrition – an important focus for responsible investment
By Robyn Parkin, Head of Sustainability at Ethical Partners Funds Management.
Ethical Partners, along with RIAA, First Sentier Investors, public health academics and government representatives, was pleased to be part of a recent roundtable held by the Access to Nutrition Initiative (ATNI), to discuss how investors could better leverage their shareholder voice and capital to help address nutrition and health.
Healthy food and nutrition is an important area through which companies and responsible investors can have a real impact on numerous important sustainability goals, including human rights, children’s rights, the SDGs, and even the climate and natural capital crisis.
Australia currently faces a crisis of nutrition, with 67% of adults and around 25% of children classified as overweight or obese, with clear ramifications for chronic disease rates, ill health and future mortality. Meanwhile, serious pockets of malnutrition exist in First Nations 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.
As always, with a global and system wide issue such as health and nutrition, collaboration is vital, so we would also encourage investors to reach out to initiatives such as ATNI, or other civil society groups in this space to use their shareholder voice and capital and to have a greater focus on improving the impact of Australian companies on health and nutrition.
Robyn Parkin is the Head of Sustainability at Ethical Partners Funds Management. Robyn coordinates Ethical Partners’ sustainability strategy and proprietary in-house ESG research and analysis process, and works directly with the investment team to integrate this into the investment process. Robyn also coordinates the sustainability engagements with Australian companies, as well as an active program of investor collaborations and wider advocacy initiatives. Robyn is also a Manager of the Ethical Partners Tatrai Giving Fund. Robyn holds qualifications in Sustainable Finance and Leadership from the Cambridge University Institute of Sustainability, postgraduate qualifications in Public Health from UNSW and is currently completing a Masters of International Development at RMIT.