Campaigners want foodservice businesses to be transparent about the healthiness of their products to encourage responsible investment. By Nick Hughes.
Up for the fight. “This is not a particularly easy time for shareholder engagement,” noted Georgie Cowell, senior research officer at ShareAction during a recent webinar hosted by the NGO. That’s arguably something of an understatement. The ideological backlash against the concept of corporate responsibility triggered by the election of Donald Trump as US president has given institutional investors like banks and pension funds tacit permission to retreat from backing businesses with strong ESG credentials. Yet campaigners are not going to lie down without a fight.
Transparency and targets. Cowell was speaking during a webinar in which ShareAction launched a new set of investor asks specifically targeted at the eating out of home sector. The NGO is calling for greater ambition from fast food chains, restaurants, cafés and other out of home venues around the nutritional quality of their products. Specifically, it wants businesses to start publishing annual sales-based data on the healthiness of their portfolio using an internationally recognised nutrient profiling model and a measure of portion size. It also wants companies to publicly commit to increasing the overall healthiness of sales using a sales weighted metric and set targets. Transparency of this kind is sorely lacking at the moment. “When it comes to health and nutrition disclosure, the sector is almost starting from ground zero,” said Cowell.
No excuses. ShareAction has historically focused its campaigning on food retailers and manufacturers, among whom transparency is more developed (though far from consistent or comprehensive), but has now set its sights on spurring action within the out of home sector. A new investor briefing lays bare the influence the sector now has on our eating habits following decades of growth. In the US, one in three adults eat fast food on any given day, while in the UK approximately 60% of out of home consumers use the sector at least once a week. The upshot, says ShareAction, is that the industry’s claim that eating out is an occasional treat no longer stands up to scrutiny – hence it’s time to take its responsibilities seriously.
Cost crisis. Contributors to the webinar argued that selling unhealthy food exposes out of home businesses to a cocktail of future risks. The global economic impact of overweight and obesity is predicted to surpass $4trn (£3.1trn) by 2035, according to the World Obesity Federation, equivalent to 3% of the world’s GDP. Experts argue governments will be left with little choice but to clamp down on those contributing to the obesity epidemic through the food they sell or risk healthcare costs spiralling to unsustainable levels. “Governments are really shifting the burden onto business, and so those businesses that fail to act are likely to have much higher costs when it comes to compliance and fines as well,” said Ali Morpeth, co-founder of consultancy Planeatry Alliance.
Regulatory risk. As for investors, health as a risk factor still suffers from a lack of engagement. “That’s strange, because we know the big societal impact of unhealthy food,” said Frank Wagemans, senior engagement specialist at Achmea Investment Management, which in 2024 co-founded the Health Engagement Alliance with three other Dutch investors to engage out of home businesses on the issue of healthy diets. Investors should be cognisant of the risk to company performance from government regulations, Wagemans said, noting how over 100 sugar taxes have now been deployed worldwide. Morpeth added that the growing threat of litigation from citizens against purveyors of ‘junk’ foods is another risk to investments, alongside growing consumer demand for healthier food options.
Leading by example. In order to make informed decisions about a company’s exposure to these kind of risks, investors need access to data. With many governments, including the UK’s, reluctant to mandate reporting on key nutrition metrics (a key recommendation from Henry Dimbleby’s national food strategy) businesses are being urged to step up and do the responsible thing. ShareAction’s investor briefing cites two examples of out of home businesses making moves in the right direction. KFC UK & Ireland now reports on the proportion of products in its portfolio that are classed as non-HFSS (high in fat, sugar and salt) versus HFSS, according to the UK government’s nutrient profiling model. It has also set a target to increase the proportion of non-HFSS products in its portfolio to 70% by 2025. Greggs, meanwhile, pledged in 2021 to make 30% of the items on its shelves ‘healthier choices’ by 2025, defined as products containing fewer than 400 calories and scoring no reds on the government’s traffic light system – a target it achieved three years early in 2022. ShareAction said both companies are showing signs of leadership although it noted how their targets are portfolio rather than sales based meaning they don’t reflect what is actually being bought by customers (KFC has expressed its ambition to develop a sales-based target).
The bigger picture. Investors raking in juicy returns from junk food may not be stirred by the demands of campaigners, but ShareAction urges them to see the bigger picture. “A healthy economy is more important for overall portfolio returns for diversified investors than the performance of individual companies,” the briefing document states. Although less healthy foods may generate profits for companies in the short term, the harms these create – through for example premature death, absenteeism and reduced productivity – negatively impact the overall health of the wider economy. Food for thought for out of home businesses and the investors whose capital they deploy – for good or (mostly at the moment) for ill.
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