UK charity Food Foundation is calling on investors to engage collectively with the food sector and UK Government to push for mandatory reporting of healthy and sustainable food sales, RI can reveal.
The call to action comes as the charity, which focuses on policy and business practice in the UK’s food industry, has in the past 12 months tracked progress by 29 UK food retail, foodservice and restaurant chain businesses across themes relating to the transition to a healthy and sustainable food system.
The topic is rapidly rising up the agenda of investors. For example, a £140bn investor coalition including BMO Global Asset Management, Rathbone Greenbank and JOHCM earlier this year saw supermarket giant Tesco committing to increase sales of healthier food and drink products across all its group retail business after the investors put pressure on the company through the UK’s first health-focused shareholder resolution. The investors withdrew the resolution after Tesco's committment, which also included a pledge to publish a strategy for how it will achive the goal and to annually report on its progress.
In addition to mandatory reporting on healthy and sustainable food sales, the Food Foundation wants investors to engage with companies to disclose and set targets on “material issues for health, environment and social justice across both their supply chain and their sales”.
Plating Progress, which is the third annual assessment conducted by the Foundation, found that despite widespread progress, the UK food sector is still lagging behind on implementing transition plans – for example through targets to increase the sales of plant-based proteins or shifting away from animal sources of protein – and committing to tackling their Scope 3 emissions.
The World Benchmarking Alliance’s recent Food and Agriculture benchmark raised similar concerns, finding that only 26 out of 350 of the largest companies are working to reduce emissions from their direct activities (scope 1 and 2) through science-based targets.
Criticisms were also raised regarding the sectors’ failure to show how they identify, assess and act on key human rights issues.
With the recommendations it has issued to investors – as well as governments and businesses – the Food Foundation hopes to forge a consensus on metrics and reporting mechanisms that allows the food industry to make progress in transitioning to sustainable and healthy diets.
Some investors have already taken action. Facilitated by The Food Foundation, Rathbone Greenbank Investments led a group of investors, representing £2.8trn in assets under management or under advice, which co-signed an open letter to the UK Government which (among other things) called for such reporting requirements.
“Driving change towards a healthy, sustainable food system should be a key concern for the investment community,” said Kate Elliot, Head of Ethical, Sustainable and Impact Research at Rathbone Greenbank Investments. “If left unmanaged, the impact of the current food system on public health and the environment could pose systemic risks for the economy, society and investors.”
The importance of the food system in tackling climate change as well as social issues is proving increasingly important to investors – in just the last few months a swathe of action has taken place.
In August, shareholder engagement network Climate Action 100+ released its sector strategy for the food and beverage sector; the strategy sets out the necessary actions for the sector to take to achieve Net Zero and includes recommendations for investor engagement with companies.
In July, RI reported that US-based sustainability body Ceres was asking investors to join an engagement programme targeting 50 of the highest-emitting publicly-traded food and agriculture companies in North America.
Earlier the previous month, a $5trn global investor coalition, coordinated by FAIRR, the Farm Animal Investment Risk and Return initiative founded by private equity investor Jeremy Coller, partnered with former UN Secretary-General Ban Ki-moon to call on G20 nations to disclose specific targets to reduce agricultural emissions within their Nationally Determined Contributions in the run up to COP26.
On the company side, Tesco, Sainsbury’s, Marks & Spencer, Nando’s and Ocado were amongst the corporate members of a coalition, which also included Legal & General Investment Management, EdenTree Investment Management and Swedish pension fund AP7, that opposed a controversial deforestation bill in Brazil.
Complimenting the recommendations to investors, the Food Foundation is urging the UK Government to ensure that the recommendation for mandatory reporting on healthy food sales – a recommendation in the government-commissioned National Food Strategy review into the food system – is implemented in law.