Healthier product ranges and greater transparency around nutrition are key ingredients for food security and sustainability, alongside improving supply chain resilience and reducing environmental impacts.
The global economic burden of obesity is projected to rise to 3.3% of GDP by 2060. In the UK, the total annual cost of an overweight and obese population is already estimated at £126 billion (US$167.15 billion), closer to 5% of GDP.
International food companies have long faced pressure from lobbyists, investors and health organisations to improve both the nutritional content and ingredients labelling of their products to limit the detrimental impact on consumers.
But a lack of cohesive action from the industry has driven a coalition of 100 investors, supermarkets, food businesses, NGOs and academics to demand the UK government introduces legislation to transform the country’s food system “for our health, the economy and the planet”.
In a statement released this February, signatories including Marks & Spencer, The British Medical Association (BMA) and Rathbones Group said a Food Strategy White Paper would be a “once-in-a-generation opportunity… to ensure food and nutrition security for current and future generations by protecting citizens, farmers and food businesses from climate shocks and inflation”.
Sarah Buszard, Responsible Investment Engagement Lead at The Food Foundation, a UK-based charity working to influence food policy and business practices, says: “We all want to be able to afford and eat nutritious, healthy, sustainable food that doesn’t harm us and the planet. But our shops are flooded with food that is making us ill and our planet sicker. A Food Bill would provide long-term legislative policy certainty for investors, businesses, citizens and farmers to secure our country’s economic productivity and growth.”
For many, progress has been frustrating slow. But it comes amid a complex context, with the global food system and its investors facing up to multiple challenges, confronted by the risks and impacts of nature and climate crises that it has played a hand in accelerating.
Volatile input costs and unpredictable yields require organisations across the food supply chain to spin multiple plates. Ken Murphy, CEO of UK food retailer Tesco warned the industry in January that it was “sleepwalking into a crisis”, calling on it to collaborate on climate change and put sustainability at the heart of strategy.
System-level investment risk
Supporters of the initiative hope to feed into the government’s 10-Year Health Plan for England, announced in July 2025, that includes measures to restrict junk food advertising targeted at children and introduce mandatory healthy food sales reporting for all large companies in the sector, which would be used to set targets.
The proposed bill follows demands made last summer by a coalition 23 institutional investors with holdings in major food companies and US$1.33 trillion in assets under management for mandatory reporting and target setting to provide “consistent and comparable data to assess companies’ impacts on health, and to guide funding allocation decisions and support stewardship activities”.
This February, responsible investment charity ShareAction, which is leading the charge for mandatory reporting, published its ‘Fit for the Future’ report highlighting the social and economic impact of poor nutrition, specifically the contribution of ultra-processed foods (UPF) to diets worldwide, on individuals’ health and investor portfolios.
The report says investors should encourage companies to reduce high fat, salt and sugar in products and to sign the Investor Statement on Mandatory Reporting and Target Setting.
Tom Sanders, Senior Investment Analyst, Responsible Investment at Nest Pensions, which is a supporter of mandatory targets, says this legislative push presents an opportunity for investors to engage with the food companies in their portfolios on the merits of promoting healthier products and improving reporting.
“We think food security is a system-level investment risk. Engagement allows investors to understand how companies are managing these risks and to encourage them to strengthen their strategies where needed. This includes promoting healthier product ranges, improving supply chain resilience, reducing environmental impacts and ensuring transparency around nutrition and health data. We think companies that anticipate and respond effectively to these challenges are better positioned to deliver sustainable returns over the long term.”
Nest has already been engaging with large food and beverage manufacturers to make the case for nutrition disclosure and healthier product strategies. “Our dialogue has moved beyond simply understanding existing approaches to encouraging companies to prepare for forthcoming regulation and improve transparency for investors,” adds Sanders.
Have a break
Just a handful of multinational companies dominate the food industry, making them prime targets of shareholder engagement.
The largest is Nestlé, which has a market cap of €231 billion and offers up a billion servings of its products to consumers every day worldwide.
In 2024, a group of shareholders, co-ordinated by ShareAction, filed a resolution challenging the firm to set a target to increase the share of its sales from healthier products. They also asked it to implement internationally accepted standards that define healthy food.
The resolution ultimately failed receiving 88% votes against, with Nestlé leadership arguing it would restrict strategic freedom and indulgent product sales.
In the intervening period, renewed pressure including from Access to Nutrition Market Impact (ATNi), which assess food companies on their nutrition-related commitments, practices and performance globally, has driven positive change.
In 2025, Nestlé CEO Laurent Freixe announced that the company would report on the nutritional value of its product portfolio and complement its existing reporting with new data aligned with the ATNi.
Freixe, who has since been forced to resign, called on other food manufacturers to follow suit, claiming “collaboration to co-create reporting measures that build trust across the food industry” is the way forward.
However, ShareAction says Nestle’s counterparts – including Coca-Cola, PepsiCo, and Mondelēz – “are dragging their feet on taking responsibility for their role in the global health crisis”.
Penny Fowler, Head of Corporate Climate Campaigns at ShareAction, says: “Some companies have been more inclined to use their own methodologies. We are driving for a standardised approach, so investors can compare across companies and understand how they’re doing in relation to each other.”
TCFD for food
The goal for organisations such as ShareAction and The Food Foundation and their supportive investors is to establish a framework similar to that of the Taskforce for Climate-related Financial Disclosures which has been instrumental in delivering reporting on how firms manage financially material climate risks and impacts.
Lauren O’Leary, Ethical, Sustainable and Impact Researcher at Greenbank, part of Rathbones Group, says: “When we are looking at [nutrition] metrics, we want to be sure, as we are with climate, that they are grounded in evidence and science. We also want them to be multi-stakeholder and to be consistent.”
Amy Browne, Director of Stewardship at CCLA, an ethical manager largely serving charities and faith-based organisations, says a lack of consistency is a significant challenge, noting there are myriad government-endorsed nutrient profiling standards globally.
“Even though they are science based, they are difficult to navigate. It will be very important that the UK government’s future health policy introduces standards that make it easy for investors to evaluate a company’s policy on nutrition.”
ATNi has developed indexes in order to provide independent benchmarks against which investors can measure the health profile of a company’s portfolio and qualitative analysis of whether policies are effectively enacted. This leads to “progressive dialogue underpinned by a solid evidence base”, it says.
“Companies’ own reporting often differs from our’s because they might fudge the numbers. We need to be sure what they are saying is true,” says Greg Garrett, Executive Director at ATNi.
Healthy food, healthy sales
Recent research from ATNi covering 20 companies representing 10% of the global food and beverage market benchmarked the healthiness of their product portfolios against their profits and market valuations.
The six companies with broader, healthier food portfolios were found to have a higher average enterprise value to earnings before interest and taxes (EV/EBIT) ratio than their less-healthy peers.
Garratt says: “If you want to make short-term profits, double down on your confectionaries and your sugar sweetened beverages. But if you want to be safe for the long term, investors are seeing the risks to their portfolios from exposure to unhealthier foods.”
ATNi is looking to developing economies, notably those in South America, where governments have learnt from the mistakes of their western counterparts and are implementing stronger monitoring and reporting standards.
In 2016, the Chilean government introduced a law on food labelling and advertising which, according to research published in PLOS Medicine from the University of Chile, resulted in households buying 37% less sugar, 22% less sodium, 16% less saturated fat and 23% fewer total calories from products with warning labels.
Action on all fronts
Understanding food manufacturers’ impact is a vast area for investors, encompassing climate and biodiversity, workers’ rights, animal welfare and health.
To be able to drive positive change, effective strategies will be needed in each of these areas, including collaborative campaigns that bring strength in numbers.
In terms of health and nutrition, investors and action groups are already demonstrating their efficacy in shaping business strategy; Nestle being a case in point.
However, to truly influence companies with a huge global reach many argue there needs to be a more coordinated international effort, alongside domestic campaigns. A BMA report looking at contributing factors to the UK’s obesity crisis says, “action must be taken urgently to improve the food environment and address the health impacts of poor diet”.
While investors step up their advocacy capabilities in pursuit of legislative solutions to systemic risks posed by the food sector, existing channels and relationships should not be ignored, says CCLA’s Browne.
“Policy engagement is critical, but that takes time and a huge amount of expertise. We mustn’t lose sight of the engagement that we can have with individual companies within our sphere of influence.”
