Investors Back Unilever Use of Food Health Metrics

Firm’s adoption of independent benchmarks to provide transparency to shareholders on public health impacts.

An investor alliance led by UK NGO ShareAction has withdrawn a shareholder resolution from Unilever’s upcoming AGM after the consumer foods group agreed to adopt external health and nutrition metrics.

Having previously claimed 61% of its food and drink sales met high nutritional standards based on its own definitions, Unilever will now measure its sales in 16 markets using government-endorsed nutrient profile models (NPMs).

“Unilever’s commitment to use independent benchmarks going forward will provide far greater clarity to shareholders and consumers on its impact on public health,” said ShareAction in a statement, adding that it hoped other firms would follow its lead.

In January, investors with US$215 billion AUM jointly filed a resolution which called for Unilever to disclose against government-endorsed standards and adopt higher targets for healthy food sales.

The filing was part of a multilateral engagement effort, coordinated by ShareAction, including pan-European asset manager Candriam, Dutch asset manager ACTIAM, US healthcare provider Trinity Health, and the UK’s Guy’s & St Thomas’ Foundation, CCLA Investment Management, and Greater Manchester Pension Fund.

An independent review had estimated that healthy products accounted for around 17% of Unilever’s food sales.

Investors’ focus on food nutrition and related health issues has grown in recent years, partly due to increasing evidence of the economic losses to firms from poor employee health, but also because of a range of rising risks in the global food system.

New metrics, new targets

Starting in October, Unilever will publish annual assessments for around 25,000 products against a range of NPMs, which are used by national food standards authorities to classify and regulate their consumer food markets to improve public health and nutrition.

Examples of NPMs include High Fat Salt Sugar classifications in the UK, Nutri-Score used in European countries including France and Germany, the Health Star Rating, used in Australia and New Zealand, and the Front of Pack labelling.

Unilever will also set new targets for increasing the proportion of its healthy sales ahead of its 2023 AGM and will submit these to shareholder scrutiny.

According to the Access to Nutrition Initiative’s 2021 Global Index, less than a third of all packaged food and drink products can be classified as healthy based on a government-backed definition. Last November, the initiative published eight case studies highlighting the engagement efforts of institutional investor signatories to improve corporate performance on nutrition and health.

Research by ShareAction found that unhealthy products accounted for more than 70% of the UK sales of 16 global food and drinks manufacturers.

“Concrete policies” needed

Louisa Hughes, Engagement Manager at ShareAction, welcomed Unilever’s willingness to engage with investors but said the NGO and its partners would consider further action in future if steps taken by the firm were unsatisfactory.

“The next seven months are crucial for ensuring that this commitment is translated into ambitious long-term goals, with concrete policies to deliver these. We encourage investors to make their expectations known to the company,” she said.

Unilever and ShareAction intend to engage quarterly in 2022 and 2023, and bi-annually thereafter.

The engagement is part of a wider Healthy Markets Initiative campaign by ShareAction, designed to build health considerations into investment decisions, backed by investors with US$5.8 trillion AUM.

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