Institutional investors target agribusiness companies to promote better nutrition

53 institutional investors representing $ 12.4 trillion in assets under management have pledged to support the achievement of the World Health Organization (WHO) nutritional goals under SDG 2 to end hunger and poverty. ‘SDG 3 to promote well-being. This action highlights the growing recognition of the role and responsibilities of investors and businesses in the food system.

There is also a strong link with the climate challenge. Today, the global food system is affecting climate change, while at the same time climate change endangers food production as it leads to a decrease in the quantity and access to food, a decrease in diversity food and decreased nutritional value. Inge Kauer, Executive Director of the Access to Nutrition Initiative (ANTI), said: “What the United Nations Food Systems Summit and the Nutrition for Growth Summit have underscored this year, c t is what we really need is a healthy AND sustainable food system that benefits both people and the planet.

There are significant economic impacts of poor nutrition that are only really entering the mainstream now. The World Bank has estimated that the economic costs of undernutrition, in terms of lost national productivity and economic growth, range from 2-3% of GDP in some countries, up to 11% of GDP in Africa and Asia each. year. More developed countries are also affected by malnutrition. The OECD predicts an average reduction of 3.3% in GDP between 2020 and 2050 due to declining employment and declining employee productivity caused by being overweight. This includes Japan, which is experiencing rising obesity rates, as the FAO reports.

Kauer adds, “Governments are now concerned about the economic burden they face and are starting to regulate and legislate on the food industry – forcing food companies to improve the safety of their packaged food products and tackle malnutrition. As more stringent regulations are put in place, for example in food labeling and marketing, food manufacturers are forced to adapt by reformulating products, strengthening marketing standards and even more.

The engagement follows the publication of a report from the Access to Nutrition Initiative (ATNI), showing how eight different asset managers and investor coalitions are embracing ESG integration, negative filtering / exclusion, corporate engagement and shareholder action, positive / best-in-class screening. and thematic / thematic sustainability investment to contribute to the achievement of SDG2 “Zero Hunger” and SDG3 “Health and Well-being”.

One of the main driving forces behind the action is the recognition of the scale and impact of the packaged goods industry. In 2019, Euromonitor found that total global retail sales of packaged food and non-alcoholic beverages were around $ 3 trillion. Kauer says, “Sector revenues are exposed to both investment risks and opportunities associated with nutrition. On the one hand, malnutrition represents a clear and significant risk for investors with stakes in companies in the food and drink sector and, on the other hand, the growing interest of consumers in healthy eating represents a significant risk. growth opportunity. Companies will be called upon to use the system developed independently by ANTI to define what constitutes a healthy product and to adopt the commitments set out by ANTI.

Kauer said: “Institutional investors have a crucial role to play in tackling the global nutrition crisis. First, as responsible businesses, all investors must help tackle the problem of poor nutrition, which leads to high rates of preventable death and noncommunicable diseases, while also putting people at increased risk of disease. transmissible diseases such as COVID-19. In addition, the high individual, societal and economic costs of unhealthy diets and poor nutrition impact investor holdings, portfolios and asset values ​​in the short, medium and long term, which means that ‘There is a clear mutual benefit for investors, business and society in taking action on nutrition.

The importance of engagement is the recognition that many of the sustainability challenges we face are systemic in nature. Individual choice is based on a complex web of availability, opportunity, education, price and more. Governments are increasingly taking action on the quality and safety of food, with the intention of reducing the content of sugars, salt and fat, especially in processed foods. Years of promoting the idea of ​​eating more fruits and vegetables has often been grappled with food desserts, prices and more.

There are more and more calls for marketing restrictions and guardrails are being introduced to protect children from unhealthy products. The prospect of fiscal measures like sugar taxes is a potential risk for investors – according to Kauer, there are now more sugar taxes than carbon taxes. She adds: “These combined regulatory and fiscal measures pose a significant risk to returns and investments in the food sector, and companies that approach them and integrate healthy nutrition strategies are likely to continue to have access to capital and ultimately be the ones. winners.

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