“Mutual benefits” in targeting global nutrition crisis, flag investors representing US$12.4T

07 Dec 2021 --- A total of 53 institutional investors are pledging to tackle global nutrition challenges, calling on F&B companies to take action in delivering better nutrition outcomes.

The pledge urges policymakers to strengthen commitments to achieving national and global targets set by the World Health Organization (WHO). It was presented by Akihiko Nishioka, president and CEO of Resona Asset Management, at the plenary session of the Tokyo Nutrition for Growth Summit 2021.

“As institutional investors, we acknowledge the global nutrition crisis. Poor diets provide inadequate nutrition and drive high levels of death and preventable non-communicable diseases,” the pledge reads. 

This is the first time institutional investors have been part of a multilateral nutrition summit and together, they represent US$12.4 trillion in assets under management. All of them are members of the Access to Nutrition Initiative (ATNI) Investor Group. 

“It has become increasingly clear that food systems are failing to provide nutritious foods that support healthy diets and protect the planet. Levels of ingredients and nutrients known to contribute to health are consumed in insufficient quantities such as fruits, vegetables and whole grains,” Inge Kauer, executive director of the ATNI, tells NutritionInsight.

Concrete action

Investor engagement may focus on different aspects depending on a number of factors.

Addressing global nutrition challenges has a mutual benefit to investors, businesses and society, the pledge notes. It calls on policymakers to support a global shift to healthy packaged food, using fiscal and regulatory measures where necessary and strengthening commitments to achieving national and global WHO targets.

“In the short term, governments will feel supported by investors as they look to implement a level playing field in tackling malnutrition via regulatory and fiscal action, including mandatory reporting,” states Kauer.

Businesses will understand that investors are serious about company performance in nutrition and will therefore have a further incentive to step up their efforts on nutrition, she adds. 

“In the long-term, many more investors will integrate consideration of nutrition in their investment processes and analysis, and companies’ products will become significantly healthier.”

Leveraging F&B
In the F&B industry, the pledge calls on companies to commit to three courses of action. First, companies should annually report on the percentage of their sales generated by healthy products. 

“By reporting on the percentage of sales from healthy products, companies’ portfolios will be exposed to wide scrutiny and they will be encouraged to improve the healthiness of their products via reformulation, innovation, R&D and M&A activity,” highlights Kauer.

“Better transparency could also lead to a higher level of ‘healthy competition’ between companies, who would have an incentive to try and do better than their peers.” 

Secondly, F&B could use the Health Star Rating nutrient profiling model (or equivalents) to define healthy products.

Lastly, the pledge also calls on companies to use the ATNI Investor Expectations on Nutrition, Diets and Health framework to deliver better outcomes on nutrition.

The packaged food industry with a retail value of US$2.5 trillion in 2020 could have a major impact on nutrition.

Commitments to nutrition
The framework focuses on four pillars, namely governance, strategy, lobbying and transparency.  It outlines improving the nutritional quality of companies’ products and encouraging their customers to choose healthy products through appropriate labeling, pricing, distribution, promotion and advertising.

As part of the pledge, signatories also commit to engage directly with the 20 listed F&B companies in the ATNI Global Index 2021. 

Poor nutrition can lead to significant direct healthcare costs, notes Professor Tim Benton, research director, emerging risks; director, environment and society program, Chatham House. 

Diabetes, strongly associated with obesity, impacts about 23 million people in the US, he says, which in 2017 cost an estimated US$327 billion. Direct healthcare costs per person amounted to US$9,600. In the UK, diabetes costs the National Health Service some £1 million (US$1.4 million) per hour.

“Poor diets not only cause human suffering and healthcare costs, they also lead to poor educational attainment, and productivity losses due to absenteeism and presenteeism – through for example lack of stamina – that can be considerable,” he underscores.

“For example, productivity losses associated with underweight and obesity may be up to 2.8% of GDP across a sample of low and middle-income countries. The additional losses due to micronutrient deficiencies and childhood malnutrition on education may be of the same order of magnitude.”

Global reach
The effect of this commitment is expected to have a global impact, Kauer highlights. 

“While most of the companies are based in the US, Europe and Asia, these companies sell their products all over the world and therefore have a global reach – meaning that the scope of this commitment is also global and could impact on consumers virtually in every corner of the world.” 

The problem of poor nutrition across the globe was flagged last month when UK-based Charity Right highlighted that despite the United Nations’ goal to achieve zero hunger globally by 2030, levels of both food insecurity and malnutrition are rising. The charity urged organizations to provide affected areas with food aid that is packed with nutrition and is personalized. 

As companies and governments try to tackle the hunger and malnutrition crisis exacerbated by COVID-19, global nutrition investors pooled US$3 billion to address the problem in 2020. 

By Andria Kades