Globally, levels of people who are overweight or obese are at a record high and show no immediate sign of receding. Despite a strengthening policy and regulatory agenda, food retailers still hold the balance of power in terms of influencing an individual’s eating habits. ShareAction notes that greater disclosure and affirmative action by retailers is required to encourage healthy eating. Using data provided by the Access to Nutrition Initiative (ATNI), this report consequently analyses the ten largest food retailers in the UK, namely Tesco, Sainsbury’s, Asda, Morrisons, Aldi, Lidl, Co-operative, Waitrose, Marks and Spencer, and Iceland to determine how their retail operations are addressing nutrition challenges.

Utilising ATNI’s first-of-a-kind methodology, ShareAction assesses the performance of these major retailers across key intervention areas. Performance across these intervention areas also highlight the quality (or lack thereof) of disclosure regarding retailer policies and practices for healthy eating. Overall, this methodology provides a comprehensive framework for investors to employ as a tool to strengthen active engagement, thus facilitating informed and responsible investment decisions that can be aligned with relevant Sustainable Development Goals (SDGs). To highlight the efficacy of this framework, the data is consolidated and distilled through relevant business case studies whereby investor engagement was proven successful.

The results show that poor disclosure prevents investors from putting together a clear or comparable picture of different retailers, even for those companies disclosing the most. This lack of data is problematic as it prevents investors from being able to assess the reputational and financial implications associated with the retailer in question.

ShareAction goes on to note that obesity and the UN’s SDGs is a topic ripe for investor engagement, given the abundance of opportunities such as competitive advantage and consumer support for healthier retailing practices, as well as risks including inevitable legislative change and fiscal measures. Furthermore, as the expectation to measure real world impact continues to grow, the SDGs and their targets are a way for investors to articulate and demonstrate to their beneficiaries how they are creating long term value. Moreover, investor engagement with companies will allow for more sustainable food consumption and production patterns key to addressing broader environmental and societal challenges (i.e., climate change, nutrition, deforestation), which has a significant socio-economic impact (poverty and inequality).

In summary, this brief provides information on how investors can take meaningful action to improve the behaviour of these major retailers, with flow on effects to society, the economy and the environment. This includes requesting retailers commit to full disclosure of their actions to support healthy eating given the current lack of transparency and its troubling implications for valuations and investment decisions. If within a certain timeframe this has not been implemented, investors should then escalate measures taken to hold these retailers accountable by voting against companies at investor meetings or tabling related shareholder resolutions. As a last resort, divestment should be considered. Finally, this report includes a list of high-level questions for investors to raise with retailers as an effective starting point for engagement.

1. Encouraging healthy eating habits enables retailers to deliver on a broad spectrum of environmental, health and socio-economic objectives, covering more than three quarters of the UN’s SDG’s.
2. In the UK, obesity is a major driver of social inequalities and already costs billions to an already strained National Health Service (NHS) and the economy through reduced productivity and growth. Overall costs to the economy are predicted to double to 49.9 billion pounds by 2050.
3. The UK grocery sector is so highly concentrated that the top four companies alone constitute 70% of the market, thus demonstrating the power they wield to shape our health and wellbeing. By extension, investors therefore have the capacity to positively impact society by actively engaging these retailers and lobbying for more sustainable practices.
4. Overall, the level of health reporting found by the ATNI was very poor and scattered. Even retailers that performed best were only found to be reporting on around a third of all possible action areas and information on less than 20% of indicators was found to be on the remaining four retailers.
5. Investors in the food sector are encouraged to lobby retailers for better disclosure on their strategies (and progress) to promote healthy diets and tackle obesity, which is fundamental to addressing some of the most pressing health (SDG 3) and nutrition (SDG 2) challenges society is facing.
6. There are major risks associated with investing in companies with poor food practices including consumer and governmental pressure, and increased financial and reputational risks. However, reporting by retailers is so limited that investors are unable to adequately assess these risks, or make informed investment decisions.
7. The ATNI framework is a great tool that covers all aspects related to making and promoting food products to assist investors to make investment decisions that have a positive impact on the food retailing industry.
8. Investors should look into possible methods of escalation. This could include voting against companies at their annual general meetings (AGMs), tabling related shareholder resolutions, or disinvestment as a last resort.