Shareholders call on UK Government to take action on National Food Strategy’s recommendations

A coalition of 18 institutional investors working with The Food Foundation, Rathbone Greenbank Investments and Guy’s & St Thomas’ Foundation, are urging the UK Government to demonstrate clear leadership and ambition in its whitepaper response to the National Food Strategy’s recommendations for promoting a healthier and more sustainable food system in the UK.

The group, led by Rathbone Greenbank Investments, represents over £3 trillion in assets under management or under advice, and includes Legal and General Investment Management, Aviva Investors and EOS at Federated Hermes (on behalf of its stewardship clients). The investor group also has support from ShareAction.

Specifically, the coalition is calling on the UK Government to:

• Introduce new legislation on mandatory reporting of sales-weighted metrics, as recommended by the National Food Strategy.

Such legislation should cover large retailers, restaurants, caterers, wholesalers, manufacturers, and online food ordering platforms that have operations within the UK.

Mandatory reporting should include a wide set of metrics including sales of food and drink high in fat, sugar or salt (HFSS), sales of protein by type, sales of fruit and vegetables and food waste.

• Consider the full range of regulatory tools at its disposal – including fiscal interventions and enhanced regulation – to promote sustainability in the food system, focusing in particular on internalising the externalities currently borne by the environment and society.
• Be bold and ambitious in its response to this major social and environmental challenge.

The investor group believes that well-designed regulation can create an essential enabling environment for businesses seeking to build long-term thinking and sustainability into their business models. In particular, mandatory reporting would help to increase the comparability of data on food businesses’ targets, commitment, and progress.

The call for action follows a previous letter to government led by Rathbone Greenbank Investments, released earlier this year at the same time as the National Food Strategy’s publication, calling for reporting standards be made mandatory for businesses.

Although some businesses are reporting on healthy and sustainable food voluntarily, there is a notable lack of consistency in how metrics are being reported and some sectors are further behind. For example, analysis from the Food Foundation shows that while five out of 11 UK supermarkets have now set targets for reporting on healthier food sales targets, only two report on the percentage of their protein sales that come from animal versus plant-based sources: a shift that is urgently needed for the UK to meet net zero targets, says the Foundation.

The full letter from the coalition can be viewed at the following link: www.foodfoundation.org.uk/december-investor-letter.

Kieron Boyle, chief executive of Guy’s & St Thomas’ Foundation said: “The food industry has a major role to play in creating a healthier society by giving people better opportunities to access nutritious food. We’re pleased to see so many of the food industry’s biggest players asking the government to introduce mandatory reporting. This is about creating a level playing field that will help investors and consumers to reward the most responsible businesses and improve our food environments.”

Anna Taylor, Executive Director at The Food Foundation said: “Taking action on the National Food Strategy’s recommendations must be a priority for the UK. Not only is our health worsening, with public spending on obesity-related ill health set to keep rising, but we will not be able to meet our climate commitments without acting on sustainable food. We urgently need consistency in how food businesses report on health and sustainability metrics, to ensure that we have clear, industry-wide evidence of how the food sector is transitioning to healthier and more sustainable food sales. To achieve that, we need government and investors to work together and help drive this shift to regular and transparent reporting.”

Sophie Lawrence, senior ethical, sustainable and impact researcher at Rathbone Greenbank Investments said: “This investor group recognises the multitude of risks and opportunities facing the food industry linked to issues such as nutrition and food waste. At the same time, the food system is a major driver of climate change and biodiversity loss. The incidence of obesity – a key risk factor in cases of severe Covid-19 – is also rising across the world. These sustainability challenges present severe risks to the way in which the world produces, processes and consumes food. It’s clear that the food system in its current state is unsustainable and ambitious action is needed to realign it to work for people and planet.

“A key challenge for investors to date has been the lack of consistent, high quality and meaningful information on the nutrition and environmental performance of companies within the food sector. While there are examples of good practice in individual disclosures, a lack of common metrics means investors are often limited in our ability to direct capital toward the companies which are taking a proactive and leading approach to sustainability issues. We therefore welcome the recommendation of clear and consistent mandatory reporting requirements for companies in the food sector.”

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