Responsible investment NGO ShareAction is leading a campaign with a group of institutional investors representing over £140bn in assets, along with 101 retail investors, calling on Tesco PLC, the UK’s largest food retailer, to set targets to increase the proportion of healthy products in its sales.
According to ShareAction, the initiative marks the first health-based shareholder resolution at a FTSE100 company, and reflects rapidly rising investor concerns with companies’ health impacts, seen until recently as a fringe issue even by many advocates of ESG investing, driven by health-related awareness raised by the COVID-19 pandemic.
COVID-19 has in particular put a spotlight on the issue of obesity, with severely obese people three times more likely to be admitted to intensive care with the disease. According to ShareAction, the high proportion of grocery sales that come from products high in fat, sugar or salt is a key factor in rising levels of obesity in the UK. The initiative has chosen to target Tesco as the market leader in the UK grocery market, and as the company’s healthy eating metrics are seen as lagging behind some of its peers.
If passed, the resolution would require the company to disclose the share of total food and non-alcoholic drink annual sales by volume made up of healthier products – as defined by the UK Department of Health – and to develop a strategy to significantly increase that share by 2030, and to publish a review of its progress each year in its annual report from 2022 onwards.
Ignacio Vazquez, Senior Manager at ShareAction, said:
“Supermarkets, and in particular their keyworker staff, deserve credit for working tirelessly throughout the pandemic to keep food on the shelves. However the companies also have a responsibility for the health impacts of their product ranges and marketing efforts.
“As the UK’s largest food retailer, Tesco’s actions are of systemic importance in tackling obesity. But its prime market position has not yet translated into leadership on this critical issue. We hope that Tesco’s board will endorse the resolution and grasp the opportunity to help build a healthier UK post-Covid, while also improving its financial sustainability in the long-term.”