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Unilever Investors Call AGM Vote To Push For Healthy-Food Targets

Published on Jan 26 2022 12:09 PM in Food tagged: Unilever

Unilever Investors Call AGM Vote To Push For Healthy-Food Targets

A group of investors in Unilever announced that it has filed a fresh resolution, urging the company to fix a ‘crucial blind spot’ in its strategy and set ambitious targets to sell healthier foods.

Call To Disclose Proportion Of Sales Linked To Healthier Products

The resolution, by an 11-strong investor group with $215 billion in assets, including Candriam, Actiam, and the Greater Manchester Pension Fund, calls on Unilever to disclose the current proportion of sales linked to healthier products.

Increase Share Target And Publish Annual Review

It also urges the company to set a target to ‘significantly increase’ that share by 2030 and publish an annual review of its progress.

Failure To Act Could Hit Finances

While Unilever, owner of the Ben & Jerry’s ice cream, Hellmann’s mayonnaise and Pot Noodle brands, is seen as a leader in sustainable business by many funds, the investors said that increasing regulations around health mean that a failure to act could hit its finances.

Taxes

Governments in many of the company’s main markets have introduced taxes on products high in sugar or calories, as obesity levels rise.

‘Blind Spot’

“Unilever has long been a sustainability leader – some even criticise it for being too focused on ESG – yet the health profile of the food and drink products it sells remains a blind spot, said Ignacio Vazquez, a senior manager at responsible investment NGO ShareAction, which coordinated the resolution.

Promoting Sustainability Credentials At Expense Of Performance

British fund manager Terry Smith, whose Fundsmith vehicle is a top-ten Unilever investor, lambasted it last week for being “obsessed” with promoting its sustainability credentials at the expense of performance.

“Investors Can Help To Drive Change”

“By voicing their support for this resolution, Unilever’s investors can help to drive change at the heart of one of the biggest food and drink manufacturers in the world, while also shielding themselves from regulatory and reputational risks,” Ignacio Vazquez said.

Unilever Statements

In response, Unilever noted that it shares ShareActions belief in the importance of having a long-term strategy for nutrition and health and publishing targets, and that it had made a commitment to reducing sugar, salt and calories in its products.

The company noted that it plans to update its model for assessing nutrition in 2022, ‘ensuring it better reflects our current portfolio and the role our products play in the diets of our consumers’.

Similar Calls For Action

The resolution follows similar calls for action at last years AGM, which, ShareAction noted, had not resulted in much progress.

Metrics Questioned

While Unilever noted that, in 2020, 61% of its food and drink sales were of products with ‘high nutritional standards’, the investors said that they questioned its metrics.

Statement: Lead ESG Analyst Of Engagement & Voting At Candriam

“It is key that a company with such a scale of leverage and capacity demonstrates efforts to set its targets and disclosures on the basis of government-endorsed nutrient-profiling models where it operates,” Sophie Deleuze, lead ESG analyst of engagement & voting at Candriam, told Reuters.

Deleuze urged Unilever to conduct and outline its risk profile in countries where it operates, factoring in aspects including existing and upcoming regulatory pressures, the health profile of customers, and their product preferences as a basis for reformulation.

A Turbulent Time

The move comes at a turbulent time for the company, which late on Wednesday 19 January effectively abandoned a £50 billion proposal to buy the consumer health unit of GlaxoSmithKline.

A Hot-Button Issue

Promoting healthy food and drink has become a hot-button issue for investors. Late last year, investors managing 12.4 trillion in assets urged policymakers to use fiscal and regulatory measures to help fix what they described as a “global nutrition crisis”.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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