Nest – Industry view Georgina Chiu is a senior ESG analyst at Nest
ACTIVE STEWARDSHIP: FOOD FOR THOUGHT
On 7 March, Unilever announced that it will set new targets to reduce salt, sugar and calories across its portfolio of products. This means the world’s largest ice-cream maker, which is also responsible for goods like Hellmann’s mayonnaise, Knorr stock cubes and Marmite, will now publish nutri- tional scores against these products, and made a firm commitment to sell healthier choices. It’s something Nest has been following carefully and were delighted with Unile- ver’s announcement. For the past few years, we have seen rapidly evolving regulatory trends and consumer expectations towards healthier food and drink ranges. In the same way responsible investors iden- tify climate change or poor workers’ rights as key investment risks, supermarkets and food manufacturers need to be ahead of the game on healthy food markets. Nest has millions of pounds invested in companies like Unilever, Sainsbury’s and Nestle. We want to ensure they are making positive decisions about their long-term future. Afterall, our members could be investors in them for decades to come. In the UK alone, where obesity is now a bigger cause of
death than smoking, it has an estimated economic cost of £27bn. It’s calculated that poor diets cost £54bn a year in lost earnings and profit in the UK. The soft drinks industry levy is one step of what could be many interventions from the government which will make selling unhealthy products harder. Companies overly exposed and dependent on these products could see their bottom line impacted. There’s also an opportunity to tap into a growing market for healthy products. There’s a clear trend of consumers being more conscious on what they put in their body and if companies can successfully tap into them, then it increases profits and help boost our members’ pension pots. However, last year Unilever claimed that around 60% of its products were healthy, despite an independent review from Access to Nutrition estimating the figure to be closer to 17%. Many investors believed they could do more and behind the scenes groups such as ShareAction and shareholders like ourselves have been raising these concerns. We had had good discussions but no pro- gress. In January, we increased the pressure on Unilever. A shareholder resolution was proposed for its annual general meeting (AGM),
calling for greater disclosure
against government-endorsed health mod- els and more ambitious targets on increas- ing health food sales. Nest publicly pre-declared its intention to vote for the resolution on 28 February, mak- ing it clear it had our full support. The co- ordinated approach with ShareAction and other investors helped encourage Unilever to introduce the changes we wanted. The lead up to AGMs is a unique opportu-
nity to catch the attention of organisations who want smooth and conflict-free meet- ings. It’s a time when shareholders can speak up and be more likely to have their voices heard. After all, investing without engaging means we are failing to speak up for our members and their best interests. The turmoil at Exxon Mobil’s AGM last year, when a shareholder revolt prevented board member appointments, sent a shock- wave through companies and their execu- tive teams. No longer can they expect easy rides at their AGM, and nor should they. As stewards, representing the interests of mil- lions of UK pension savers, we should be asking difficult questions. Being active around AGM season is an important way to fulfil our fiduciary duty and coalitions like ShareAction’s Healthy Markets can reduce the pressure on invest- ment teams, while also increasing the impact interventions can have. Another example is the Workforce Disclosure Initia- tive (WDI), which is now a coalition of more than 60 investors. This group encourage companies to disclose meaning- ful data around corporate workforce and supply chain practices so we can bench- mark corporate performance. If you do not already, I would encourage trustees to ask how their fund managers approach AGM and how they intend to vote. Our recent engagement with Unilever hopefully demonstrates the success share- holders can have in bringing about sustain- able business practices.
Design and production portfolio Verlag
Printed in the UK by Stephens & George
Subscription rates UK £222 (9 issues), Single issue price: £27.50 Overseas €270 (9 issues), Single issue price: €33.50
Enquiries +44 (0)20 7822 8522
j.waterson@portfolio-institutional.co.uk
© Copyright portfolio Verlagsgesellschaft mbH. All rights reserved. No part of this publication may be reproduced in any form without the prior permission of the publisher. Although the publishers have made every effort to ensure the accuracy of the information contained in this publication, neither portfolio Verlagsgesellschaft mbH or any contributing author can accept any legal responsibility whatsoever for any consequences that may arise from errors or omissions contained in the publication
ISSN: 2045-3833 Issue 112 | April 2022 | portfolio institutional | 11
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48
