Introduction

Over the past 50 years, the way food is produced and consumed has profoundly changed [1]. Population growth, intensive industrial agriculture and food production, combined with neoliberal economic and trade policy arrangements, have led to increasingly globalised and industrialised food systems with wide-ranging negative implications for population and planetary health [1–3]. Comprehensive action from multiple stakeholders is critical for promoting food systems that are healthy, sustainable and equitable [3, 4]. Most food systems are now dominated by the supply, distribution and marketing of processed and packaged foods and beverages [5, 6]. These food system changes have resulted in a shift towards diets dominated by processed, packaged foods that are often low in nutritional value and high in sugar, salt, fat and energy [7]. There is global recognition that the dynamics of modern food systems are a key driver of unhealthy diets and related non-communicable diseases, like obesity, which are the leading contributors to death and disability worldwide [1].

Despite strong calls for widespread government, food industry and civil society action to improve the healthiness of food systems, progress has been limited [3, 5]. Whilst some food companies and retailers have taken steps to address unhealthy diets and obesity, food industry policies and actions have generally been weak and fall far short of global recommendations [8]. Moreover, the increasing market concentration and power of the food industry has meant that key food industry actors (including food and beverage manufacturers, retailers and quick service restaurants) exert considerable influence over governments and policy processes in ways that can either delay or circumvent the implementation of recommended actions to address nutrition issues [9, 10]. Increasing accountability of the food industry for their influence on population diets therefore forms an important component of efforts to prevent obesity and improve health.

The financial sector — including banking, insurance and investment organisations — is increasingly recognizing the importance of incorporating environmental, social and governance (ESG) considerations within financial decision-making (‘sustainable finance’) [11, 12]. There is growing consensus within the sector that this approach can support and even enhance financial growth through risk mitigation and long-term value creation [13, 14]. Within the field of sustainable finance, institutional investors (specialised financial institutions that collect funds from third parties to invest on their behalf in the name of the institution [15]) are particularly well positioned to influence corporate behaviour and governance due to high levels of shareholdings and associated ownership rights (e.g. rights to bring and vote on shareholder resolutions) as well as substantial funds available for new investment [16, 17]. Given that the food industry in many parts of the world has become increasingly consolidated, dominated by shareholder-owned (listed) companies [18, 19] (e.g. large multinational food and beverage manufacturers, retailers and quick service restaurant chains listed on stock exchanges), institutional investors have considerable potential to exert influence in ways that promote increased nutrition-related action and accountability.

The potential role of investors in addressing public health challenges has been reported in academic literature since the early 2000s, most notably in relation to divestment from tobacco [20, 21] and alcohol [22]. Attention to these issues has historically been driven by ethical and faith-based investors, who regard shares in companies that produce these products as ‘sin stocks’ [23, 24]. In regards to health more broadly, a recent study looking at opportunities for scaling up sustainable investment in ‘global health’ by financial markets suggested to add specific ‘health’ (H) criterion to the ESG framework (ESG + H) [25•]. The authors note that this new ESG + H framework could be applied to corporate reporting, responsible investment products and investment decision-making (e.g. screening) [25•]. However, there has been limited academic discussion of investment to address obesity and nutrition challenges.

This paper aimed to summarise the latest global trends and new developments in the approaches taken by institutional investors to nutrition and obesity prevention. We conducted a literature search, predominantly focused on the grey literature. This included relevant reports by leading sustainable financial initiatives (e.g. UN Environment Programme (UNEP) Finance Initiative, European Union Green Deal, Global Sustainable Investment Alliance), global Corporate Social Responsibility and ESG reporting standards, sustainability-related frameworks and conventions. We also conducted a search to identify relevant accountability initiatives, as well as news articles related to investor attention to nutrition.

We firstly provide a brief summary of the rationale and mechanisms for institutional investors to incorporate nutrition-related considerations. We then highlight recent international initiatives, ESG reporting standards and frameworks and accountability initiatives that focus on nutrition-related issues for investors. Finally, we discuss recent trends in investment attention to nutrition and obesity prevention.

Rationale and Mechanisms for Institutional Investors to Incorporate Nutrition-Related Considerations

‘Responsible investment’ describes investment that considers the ESG performance of companies as well as their financial performance [24]. Responsible investment has its roots in ‘ethical investment’, in which investment decisions were based on ethical or moral values and were primarily faith-based [24, 26]. Today, institutional investor motivations for responsible investment typically also reflect financial goals, including mitigation of financial risks associated with ESG and ensuring sustainable profit growth [24]. Financial regulators and peak finance bodies in many jurisdictions increasingly recognise that ESG considerations are financially material to investment decision-making, and that this is a component of fiduciary duties owed by these institutions to their beneficiaries [14]. By properly taking into account ESG considerations, institutional investors may therefore reduce their exposure to financial risks and potential legal challenges for breach of duty [14]. Institutional investors can integrate ESG considerations within their decision-making through various investment strategies, described in Fig. 1 [27].

The World Economic Forum notes that institutional investors can play a key role in incentivizing the establishment of more equitable, sustainable and healthy food systems through setting higher standards for how companies operating in the food system target environmental and social outcomes alongside financial returns [28•]. Institutional investors that incorporate nutrition within decision-making can mitigate risks related to changing regulatory environments (e.g. taxation and restrictions on sales and marketing of unhealthy products), consumer demand for healthier products and reputational concerns around unhealthy products and unethical business practices [29••]. Given their highly diversified portfolios, institutional investors are likely to be more reliant on a stable and healthy economy (and society) for stronger long-term investment returns [12, 30]. Accordingly, institutional investors may also stand to gain financially from the societal and economic benefits associated with supporting a healthier society through good nutrition.

International Multi-stakeholder Initiatives that Address Nutrition

With increasing globalisation, the international community has recognised the need for multi-stakeholder governance frameworks that address sustainability challenges, including those related to food systems [31–33]. Many of these initiatives highlight the importance of a comprehensive and coordinated approach to establishing more equitable, sustainable and healthy food systems [31–33]. Below, we highlight some recent international multi-stakeholder initiatives that aim to address nutrition-related issues, with a focus on those relevant to the financial sector.

The United Nations Sustainable Development Goals

The UN Sustainable Development Goals (SDGs) present a roadmap for society to contribute to the health and wellbeing of people and the planet by 2030 [34]. SDG 2 ‘End hunger, achieve food security and improve nutrition and promote sustainable agriculture’ and SDG 3 ‘Ensure healthy lives and promote wellbeing for all at all ages’ include targets specifically related to the prevention of NCDs and malnutritionFootnote 1 [34]. The 2017 Global Nutrition Report and the World Obesity Federation recognise that addressing malnutrition in all its forms will have wide-ranging impacts on achieving targets within almost all of the SDGs (including through poverty reduction and co-benefits for planetary health) [32, 35].

There are several UN initiatives that aim to mobilise financial sector contributions to achieving the UN SDGs. The UN Global Compact is a voluntary pact for businesses to implement sustainability principles on human rights, labour, environment, anti-corruption and achieving the UN SDGs [36]. The UN Global Compact and KPMG International have developed the SDG Industry Matrix to convert interest stimulated by the SDGs into strategic industry activities which grow in scale and impact [37, 38]. Of note, the SDG Industry Matrix includes suggested actions to support SDG2 (Zero Hunger) and SDG3 (Good Health and Wellbeing) for the Financial Services sector and the Food, Beverage and Consumer Goods sector [37, 38]. The UN Environment Programme (UNEP) Finance Initiative aims to utilize private sector finance to contribute to sustainable development [39]. The UN Principles of Responsible Investment (UNPRI), supported by both the UN Global Compact and the UNEP Finance Initiative, is the leading international network promoting responsible investment, and has over 4000 signatories that have committed to a set of voluntary principles to build a more sustainable global financial system [40]. The UNPRI requires signatories to report on their responsible investment activities in annual transparency reports, including their responsible investment approach for listed equity (where relevant) [41].

Global Decade for Action on Nutrition

In 2014, the UN and WHO endorsed a global action plan for addressing malnutrition at the ‘Second Conference on Nutrition (ICN2)’ [33]. The ‘Decade of Action on Nutrition’ 2016–2026 provides a directive for UN member states to achieve a broad set of global nutrition and diet-related NCD targets by 2025, as well as the nutrition-related SDGs by 2030 [33]. Of relevance to the financial sector, Action Area 4 of the Decade of Action on Nutrition stipulates the need for trade policy and investment that supports improved nutrition [33]. As part of this action area, responsible investment in agriculture and food systems is nominated as a priority focus [33], although it is unclear what this means in practice for the financial sector. Only three countries — Italy, Ecuador and Brazil — have thus far made SMART (specific, measurable, achievable, relevant and time-bound) commitments to the Decade of Action on Nutrition.

United Nations Food Systems Summit

In September 2021, the UN convened a Food Systems Summit as part of the Decade of Action on Nutrition to achieve the UN SDGs by 2030 [42]. The Summit was a multi-stakeholder collaboration that aimed to generate action and progress towards achieving all 17 SDGs, whilst raising awareness of how reforming food systems can achieve sustainable development. It is worth noting that the multi-stakeholder event design has been criticized by some for enabling corporate influence [43]. As part of the Summit, ‘finance’ was highlighted as an essential ‘lever of change’ in achieving the Summit aims. The finance community is set to be involved in follow up actions through ‘assessing investment needs, creating incentives, identifying solutions that address inclusion and managing risk’, including by leveraging their resources and mobilizing capital [44].

Tokyo Nutrition for Growth Summit (N4G)

The Tokyo N4G Summit, scheduled for December 2021, aims to scale up global multi-stakeholder policy action and investment to achieve nutrition-related targets within the SDGs and accelerate the achievement of objectives within the UN Decade of Action on Nutrition [45]. The Tokyo N4G Summit commitments focus on making nutrition integral to Universal Health Coverage for sustainable development; building food systems that promote safe, healthy diets and nutrition, ensure livelihoods of producers and are climate-smart and addressing malnutrition effectively in fragile and conflict-affected contexts. Financing is highlighted as a ‘cross cutting theme’ to achieve these commitments, including the need for ‘innovative financing mechanisms and catalytic funds, and an increased focus on nutrition sensitive financing’ [45].

Relevant ESG Reporting Standards and Frameworks

There are a multitude of reporting standards and frameworks that investors and other stakeholders use to understand and measure company ESG performance. These include mandatory and voluntary requirements and guidance from regulators, capital markets, professional associations, industry bodies and other organizations [46]. Requirements across jurisdictions remain highly variable, with some jurisdictions moving towards comprehensive and mandatory reporting, and others preferring voluntary provisions [46].

Governmental-Led Reporting Requirements

Governments can establish legal frameworks, reporting requirements and guidelines for institutional investors and companies in the food industry to contribute towards healthier food systems [28•]. According to the UNPRI, in 2016, 38 of the largest 50 countries (by GDP) worldwide had or were developing some form of government-led corporate reporting requirements for ESG-related issues [47]. We are not aware of any governments that have mandatory corporate or financial sector reporting requirements related to nutrition specifically.

The European Union (EU) is arguably leading the way to improve corporate transparency on ESG issues by mandating ESG reporting requirements as part of the ‘EU Green Deal’ [48]. The EU ‘Corporate Sustainability Reporting Directive’ (2021) requires all large and listed companies (including banks and insurance companies) to report on sustainability-related factors that affect the company, as well as how that company impacts on society and the environment [48]. As well as being mandatory, reporting will be audited in order to bring sustainability information in line with existing requirements for financial information [48]. Additionally, the EU Sustainable Finance Disclosure Regulation will come into force from 2021, and will impose mandatory ESG disclosure obligations for asset managers and other financial markets participants [49].

Non-Governmental ESG Reporting Standards and Frameworks

There are several key non-governmental ESG reporting standards and frameworks that include relevant nutrition-related topics, and call out financial sector stakeholders as key end users. Two of these include specific nutrition-related reporting metrics for food industry sectors — the sector-specific standards within the Sustainability Accounting Standards Board Standards (SASB) and the GRI Standards (previous G4 Standards and upcoming Sector Standards) [50]. Both provide companies with a framework to report against specific indicators related to topics such as product labelling, marketing, nutritional content and lobbying. The SASB standards include specific, measurable reporting indicators that encourage transparency across 8 food and beverage sectors, including disclosure of revenue from unhealthy products and percentage of marketing impressions made on children [50]. Table 1 provides a summary of nutrition-related topics under relevant reporting standards/frameworks, and Table S1 provides further detail on indicators and metrics under each topic.

Table 1 Non-governmental Environmental Social Governance (ESG) reporting standards and frameworks that include relevant ‘social’ or nutrition-related topics1
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More broadly, the SDGs have been used as a reporting framework for nutrition-related issues. For example, the GRI and the UN Global Compact ‘Business Reporting on the SDGs’ initiative outlines company actions that have the potential to support the SDGs [56]. For SDG2 (Zero Hunger) and SDG3 (Good Health and Wellbeing), these include, for example, actions related to improving the availability of nutritious food and protecting consumers from negative health impacts associated with products and marketing activities (see further details in Table 1 and Table S1). However, a 2020 survey of sustainability reporting found that corporate reporting on the SDGs almost exclusively focuses on positive contributions towards the goals, and lacks transparency with regard to negative impacts [57]. Moreover, another study found that, whilst the SDGs are a major focus for investors and companies, few reporting requirements and resources provide for business disclosures on SDG2 and SDG3 [46]. One study suggested that for listed companies, investment opportunities for SDG3 are seen as ‘high’, but the focus is primarily on the healthcare sector, rather than nutrition. For SDG2, whilst the authors identify a ‘role’ for nutrition companies, the extent and types of investment opportunities that can be accessed through listed companies are estimated as ‘low’ overall [58].

Benchmarking and Accountability Initiatives

In the past 5 years, there has been substantial growth in the number of food industry benchmarking and accountability initiatives led by civil society organizations. These initiatives are useful for investors, who can use nutrition-related corporate performance data in their research, engagement and analysis, whilst identifying leaders and laggards [59, 60]. Table 2 provides details on food industry benchmarking and accountability initiatives that include various aspects of nutrition as a key focus area.

Table 2 Food industry benchmarking and accountability initiatives that include nutrition as a key focus area
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*The FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong ESG practices. An important component of the criteria used to assess corporate practices and performance is the Breast Milk Substitute (BMS) Marketing Criteria. These form part of the Customer Responsibility Theme in FTSE Russell’s ESG Ratings methodology and form a requirement threshold for inclusion in the FTSE4Good Index Series. Companies which manufacture BMS products must meet these BMS Marketing Criteria in full in order to enter the index series [79]

Investor Attention to Obesity and Nutrition-Related Issues

There is limited academic research exploring the extent to which obesity and nutrition-related issues are considered by the financial sector. A recent study looking at the commitments of 35 leading responsible asset management companies and superannuation funds in Australia found 18 out of 35 investors reported incorporating nutrition-related considerations within their decision-making, albeit in limited ways. Examples included investors actively engaging with food companies to encourage improved nutrition-related policies and practices, and screening food companies based on the healthiness of their product portfolios [80••]. Another previous study reported that whilst obesity-related issues are incorporated within the disclosure requirements and assessment indicators for widely used ESG reporting initiatives, such as the GRI, they made up only a minor component of such initiatives [81].

In the grey literature, several asset management and ESG data analytics companies have reported on obesity and nutrition as a financially material issue facing the food and beverage industry. Shareholder advocacy and engagement around nutrition issues is also emerging. Several recent examples are summarized below.

Investor Research and Reporting on Nutrition and Obesity-Related Issues

In 2017, Schroders and Rathbone Greenbank Investments (both asset management firms) released a report on the risks surrounding sugar, obesity and NCDs and their expectations for companies that are exposed to unhealthy products (particularly sugar) [82••]. The report noted that litigation, regulation and consumer preference changes all pose risks to the earnings of the food industry, and estimated the potential impact on earnings per share to be 3–25%, depending on the company’s ‘exposure’ to sugar-related risks. Of note, they outline specific investor expectations for companies where sugar/unhealthy products are material risks across 5 core areas.Footnote 2 In a similar vein, a 2013 report by Credit Suisse, a global investment bank and financial services company, discussed trends in sugar as an ESG issue [83]. This report highlighted the risks facing the food and beverage industry due to a surge in negative public opinion surrounding sugar and threats of regulation and taxation. Credit Suisse noted that the extent to which companies can manage risks related to sugar without hurting their current business models was unclear; however, the report did not outline specific expectations for companies with significant exposure to sugar.

Outside of sugar and unhealthy products-related issues, investor interest in the rapidly growing alternative proteins market (estimated to reach $290 billion by 2030) has substantially increased over the past several years, particularly from venture capitalists [84]. A 2021 report by BCG, a management consulting firm, noted that alternative proteins (including meat and dairy alternatives and cell-cultured meats) represent attractive investment options and a tangible way for investors to address ESG concerns [84]. However, the framing around alternative proteins is primarily related to environmental and ethical benefits, with little attention to nutrition. From a public health perspective, several concerns have been raised around the nutritional profile and ultra-processed nature of these products, as well as risks that heavily marketed alternative proteins may replace whole foods plant-based proteins in the diet [85–87].

Recent Examples of Shareholder Advocacy and Engagement on Nutrition and Obesity-Related Issues

Shareholder advocacy and engagement on nutrition issues is building, particularly in the UK where groups like ShareAction and the Food Foundation are particularly active. In 2021, Rathbone Greenbank Investments led a coalition of investors representing £2.8 trillion in assets (alongside ShareAction and the Food Foundation), urging the UK government to demonstrate leadership and ambition in its response to the National Food Strategy’s recommendations for promoting a healthy and sustainable food system [88]. Of note, the investor coalition strongly supported calls to mandate food company reporting on their products and sales [88].

Also in 2021, an investor coalition coordinated by ShareAction filed a shareholder resolution at Tesco asking the major UK retailer to disclose the share of total food and beverage product sales by volume made up of healthier products, develop a strategy to increase that share by 2030 and publicly report on progress [89•]. ShareAction reported that in response to this resolution, Tesco committed to increase the proportion of sales from healthier products (including a specific time bound target) across all of its retail businesses [89]. Similarly, ShareAction, along with other investors, have called on Morrison’s (another leading UK retailer) to disclose sales-based information and to publish a long-term target and strategy to significantly increase shares of healthier products [90].

Harrington Investments, a small institutional investor that focuses on responsible investing and shareholder advocacy, has also filed several health-related shareholder resolutions at major food companies. This includes a 2019 resolution filed at Coca Cola on ‘Sugar and Public Health’, calling on the company to issue an independent review of its products marketed to consumers, especially those targeted at children, including an assessment of risks to Coca Cola’s finances and reputation. Harington Investments has since filed similar resolutions at PepsiCo and McDonalds. In 2020, 11% of PepsiCo shareholders and 7% (up from 4.9% in 2019) of Coca-Cola’s shareholders voted in favour, which indicates increasing but overall low support for the proposal [91].

Discussion

This paper has summarized current trends and new developments with regard to institutional investor actions related to nutrition and obesity prevention. We found that nutrition issues appear to be emergent for institutional investors, with evidence that investor interest in nutrition is rising. In particular, material risks related to litigation, regulation and changing consumer preferences are increasingly noted by investors as challenges facing the food industry. The ways in which investors incorporate nutrition within their decision making, and the implications for their research, analysis and engagement varies. Several major investors are publicly scrutinizing the role of food manufacturers and retailers in addressing nutrition issues, and increasing pressure on companies to respond by improving nutrition-related practices. There is also increasing civil society activism focused on investors as a point of leverage in efforts to improve population diets. This builds on activism around other ESG issues, such as those related to climate change and corporate governance [92–94].

There have been a number of recent initiatives that aim to accelerate the transition towards equitable, healthy and sustainable food systems, which focus on leveraging finance to support nutrition goals. In 2021, the UN Food Systems Summit and the Tokyo Nutrition for Growth Summit are two international multi-stakeholder initiatives that may promote further action from the food industry, governments and the financial sector in achieving nutrition-related goals within the SDGs [33, 45]. Recent ESG reporting standards and frameworks developed by groups such as the SASB and the GRI include reporting metrics for nutrition, and are likely to be important for facilitating corporate reporting on nutrition and encouraging the uptake of nutrition-related data by end users including institutional investors [95]. Furthermore, an increasing number of food industry benchmarking and accountability initiatives include nutrition as a key focus area. The Access to Nutrition Initiative, in particular, assesses a wide range of topic areas relevant to nutrition across the life stages, including indicators for undernutrition, overnutrition and infant and children’s nutrition (through their assessment of breast milk substitutes and complimentary foods) [61]. Promisingly, there are also a number of initiatives that take a food systems approach to assessing companies in the food and agricultural sector, including the World Benchmarking Alliance and The Food Foundation’s Plating up Progress initiative which measure corporate practices across nutrition, environment and social inclusion topics [66, 69]. This type of holistic approach to assessing food systems issues will be important for framing complex food issues, such as those related to the expanding alternative proteins market. Importantly, a number of these initiatives target investors as end users and have a specific focus on engagement and translation of findings to investors [59, 60]. Civil society groups and advocacy groups, such as Share Action and The Food Foundation, also play a key role in bringing attention to nutrition issues, particularly in engaging the media to highlight areas in which food companies and investors could do better.

There are, however, a number of issues associated with having multiple ESG standards/reporting frameworks and benchmarking initiatives. Most notably, the relevant initiatives and frameworks currently differ in scope and use different methodologies, thereby risking inconsistent reporting of data by companies, and undermining its use in investment decision-making. There has been some effort to consolidate ESG reporting, with several high profile groups recently committing to collaborate on comprehensive corporate reporting that reduces confusion and overlap [96, 97]. However, the voluntary nature of existing standards and reporting frameworks means that corporate reporting on nutrition, where it exists, is highly variable and not comprehensive [98]. Governments in some jurisdictions, such as the EU, are taking steps to standardise industry and investor reporting on ESG issues through regulation and mandatory disclosure requirements [48], and there is considerable potential to include nutrition-related reporting for relevant companies. Increased methodological alignment between existing benchmarking initiatives will likely facilitate greater food company and investor engagement.

Conclusions

Comprehensive, wide-spread action from governments, civil society, the food industry and the financial sector is needed to improve the healthiness of population diets. Institutional investors can play a role through influencing the governance and practices of the food industry, whilst helping to hold them accountable for their contribution to unhealthy diets. There is increasing interest from institutional investors in addressing nutrition-related issues; however, investor activity in the area is piece-meal, with large variation in the extent to which issues are considered. There is a need for further integration of nutrition within current reporting standards, alongside comprehensive reporting, monitoring and evaluation of progress on nutrition-related topics by food companies. Methodological alignment across the increasing number of food industry accountability initiatives would likely help galvanise increased investor action in the area. Some jurisdictions are introducing relevant mandatory reporting requirements, which is likely to play a key role in enhancing transparency by the food industry and financial institutions.

Fig. 1
figure 1

Summary of responsible investment strategies and definitions

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