Unilever investors call for AGM vote to promote healthy eating goals By Reuters
© Reuters. FILE PHOTO: The Unilever logo is seen in this illustration taken January 17, 2022. REUTERS/Dado Ruvic
By Simon Jessop and Siddharth Cavale
LONDON (Reuters) – A group of investors in Unilever (LON:) said on Thursday it filed a new resolution urging the company to correct a “crucial blind spot” in its strategy and set ambitious goals to sell healthier foods.
The resolution from a group of 11 investors with $215 billion in assets, including Candriam, Actiam and the Greater Manchester Pension Fund, calls on Unilever to disclose the current proportion of sales tied to healthier products.
It also urges the company to set a goal to “significantly increase” that share by 2030 and publish an annual review of its progress.
While Unilever, owner of Ben & Jerry’s ice cream, Hellmann’s mayonnaise and Pot noodle brands, is seen as a leader in sustainable trade by many funds, investors have said increasing health regulations meant that a lack of action could affect his finances.
Governments in many of the company’s major markets have introduced taxes on products high in sugar or calories as obesity levels rise.
“Unilever has long been a leader in sustainability. Some even criticize 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, senior executive at responsible investment NGO ShareAction, which coordinated the resolution.
UK fund manager Terry Smith, whose vehicle Fundsmith is one of Unilever’s top 10 investors, last week lambasted Unilever for being “obsessed” with promoting its sustainability credentials at the expense of the performance.
“By expressing their support for this resolution, Unilever investors can help drive change at the heart of one of the world’s largest food and beverage makers while protecting themselves from regulatory and reputational risk,” Vazquez said.
The move follows similar calls to action at last year’s AGM, which ShareAction said didn’t result in much progress.
While Unilever said that in 2020, 61% of its food and drink sales were for products with “high nutritional standards”, investors said they questioned its metrics.
“It is essential that a company with such a scale of leverage and capacity demonstrates efforts to set its targets and disclosures based on government-approved nutrient profiling models where it operates,” Sophie Deleuze , chief engagement and voting ESG analyst at Candriam, told Reuters.
Deleuze urged Unilever to establish and describe its risk profile in the countries where it operates, taking into account aspects such as existing and upcoming regulatory pressures, the health profile of customers and their product preferences such as reformulation basis.
The move comes at a turbulent time for the company, which effectively dropped a £50 billion ($68.11 billion) proposal on Wednesday night to buy GlaxoSmithKline’s consumer healthcare unit.
Promoting healthy food and drink has become a hot issue for investors. Late last year, investors managing $12.4 trillion in assets urged policymakers to use fiscal and regulatory measures to help address what they described as a “global nutrition crisis”.
($1 = 0.7341 pounds)