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IMPORTANT INFORMATION
All data as at 31 December 2024, unless specified otherwise. This document is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. We strongly recommend you seek independent professional advice prior to investing. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. Any forward-looking statements are based on CCLA’s current opinions, expectations and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated. All names, logos and brands shown in this document are the property of their respective owners and do not imply endorsement. These have been used for the purposes of this document only. CCLA Investment Management Limited (a company registered in England and Wales with company number 2183088), whose registered address is One Angel Lane, London EC4R 3AB, is authorised and regulated by the Financial Conduct Authority.
result
Better Health
Progress on nutrition and obesity
Progress on nutrition and obesity
Good nutrition is fundamental to good health, yet humankind is experiencing a growing epidemic of diet-related ill-health. It is increasingly important and urgent for investors to take action to effect change in corporate behaviour.
Those commercial organisations that design, manufacture, advertise, and sell unhealthy food and drinks have a direct influence on our eating habits. Investors can be a driving force in raising ambitions around mandatory nutrition reporting and holding industry to account.
As investors, we can identify where a company may be missing out on an opportunity to develop healthier products and categories. We can engage where a company is failing to see the public health impacts of its own activities through the eyes of regulators and notice where its food portfolio may be more at risk from changing legislation than the portfolios of its peers. We can push for more responsible marketing and clear nutritional labelling and address concerns about a company’s approach to food manufacturing.
Through engaging with companies on nutrition, we can make business models more resilient and play a role in improving public health.
“If this food is healthy, then what about the rest of the store?”
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We support ShareAction’s Healthy Markets Initiative and the Access to Nutrition initiative (ATNi). Through these coalitions, we have been engaging with four investee companies for several years: Coca-Cola Co, Nestlé, PepsiCo and Unilever.
Primarily, we are asking these companies to commit to producing healthier products and to make these products more accessible, more affordable and more available. Our specific requests relate to disclosure, target-setting, and reporting on progress against nutrition-related targets.
In November, we co-signed a letter (coordinated by ShareAction) to US food and beverage manufacturers, including Coca-Cola Co and PepsiCo, pressing these companies to adopt enhanced nutrition disclosure practices. At the end of 2024, we await a response.
The outcomes of our engagement on nutrition and obesity in 2024 are set out below.
KEY
No response
Discussions ongoing
Positive change
Met engagement target
Coca-Cola Co
Consumer staples
We support ATNi’s engagement (led by Achmea and PIMCO) with Coca-Cola. During 2023 and 2024, engagement focused on Coca-Cola’s product portfolio and the low percentage of its products that qualify as healthy. Unlike its main competitors, Coca-Cola does not have or use a nutrient profiling model. Facing a continued lack of any meaningful progress, despite several meetings with the company, we took the decision to co-file a shareholder proposal at the company for its 2024 annual general meeting. Unfortunately, this was rejected by the US Securities and Exchange Commission before it went to a shareholder vote (see the voting section).
Nestlé
Consumer staples
We first started engaging with Nestlé on nutrition in 2017. Over the past three years, the frequency of dialogue has increased and resulted in some notable success. In 2022, Nestlé agreed to disclose the nutritional information of its products and to strengthen its responsible marketing practices. From 1 January 2023, marketing of formula milk for infants aged 0–6 months ceased. In 2023, having initially stated that it was too early for the company to set targets on sales of healthy foods, and facing the potential of a shareholder proposal, Nestlé agreed to set a target to increase the sales of healthy products. While this is a step in the right direction, we are disappointed that the target is absolute and not proportional. In 2024, we pre-declared our support for a shareholder proposal calling on the company to increase the number of healthy food options it offers compared to the amount of unhealthy food it sells. The resolution won 11% of the shareholder vote. Discussions continue.
PepsiCo*
Consumer staples
PepsiCo’s governance framework on nutrition is strong; it was one of only two companies (the other being Unilever) in the ATNi US Index 2022 that had linked CEO remuneration to nutrition objectives. In 2023 and 2024, engagement primarily focused on PepsiCo’s product portfolio. We are asking the company to disclose the healthiness of its food and beverage portfolio against a government-endorsed nutrient profiling model, and to set targets on sales of healthier products. In the past year, the company has introduced two new targets, including a new sodium goal and a goal to introduce healthier products to its portfolio. These come in addition to existing targets on calories in beverages and saturated fat in foods. The company has not yet agreed to disclose its product portfolio against government-endorsed nutrient profiling models.
Unilever
Consumer staples
In 2022, following the co-filing and negotiated withdrawal of a shareholder proposal, Unilever agreed to a new industry-leading standard on transparency around sales of healthy products. It now discloses the proportions of its sales revenue and sales volume that are associated with healthier food and drinks products, globally and in 16 key markets, against six government-endorsed nutrient profiling models (NPMs) and against its own internal model. The company has also set targets for sales of healthier products, although these are based on servings (rather than sales) and are assessed using Unilever’s internal NPM. Engagement in 2024 centred around pushing the company to base its targets on sales and to use a government-endorsed NPM as the basis for these measurements. We met the company several times in 2023 and again in 2024, by which time it had become the first company to publicly disclose the performance of its product portfolio against six NPMs for three consecutive years.
*Not held in CCLA portfolio(s) as at 31 December 2024.
Investor Coalition on Food Policy
The Investor Coalition on Food Policy is convened and resourced by the Food Foundation and overseen by an advisory group of core investors. The coalition exists to engage with policymakers to advocate for well-designed regulation aimed at creating a healthier, more sustainable and more affordable food system.
We joined the coalition when it was founded in 2021 in response to the UK’s National Food Strategy and were involved with meetings with the then Minister of State for Farming, Fisheries and Food at the Department for Environment, Food and Rural Affairs, and representatives from the Department of Health and Social Care. We continued to participate in 2024.