Rathbone Greenbank leads investor letter to the UK Government

Greenbank has led an open investor letter to the UK government supporting the mandatory reporting of nutrition and sustainability metrics for food sector companies. 

15 December 2021

This has been timed to follow the publication of the National Food Strategy in July. The UK government has a six-month window to respond to the Strategy’s recommendations in a formal whitepaper, creating a window of opportunity for investors to call for ambitious action from the government.

The coalition of investors supporting the letter represents over £3.8 trillion in assets under management or under advice and includes Legal and General Investment Management, Aviva Investors and EOS at Federated Hermes (on behalf of its stewardship clients). The investor group also has support from the Food Foundation and ShareAction.

We believe that well-designed regulation can create an essential enabling environment for businesses seeking to build long-term thinking and sustainability into their business models. In particular, mandatory reporting requirements would help to increase the comparability of data on food businesses’ targets, commitments, and progress.

Some businesses are voluntarily reporting health and sustainability metrics, but there is a notable lack of consistency in what is reported and how, and some sectors are further behind in terms of transparency. The introduction of consistent reporting requirements would go some way to creating a level playing field for food sector companies and would enable investors to identify potential risks linked to inaction on sustainability.

Health and nutrition, and food sustainability more broadly, has been a core engagement priority of Greenbank for a number of years, beginning with work around the Soft Drinks Industry Levy (the ‘sugar tax’) and its implications for beverage companies. More recently, we have focused on sustainable and healthy food systems in partnership with ShareAction’s Healthy Markets coalition (focused on childhood obesity in the UK), the Access to Nutrition Foundation (focused on over and under-nutrition at the global level) and the Food Foundation’s Plating up Progress initiative (focused on standardising nutrition and environmental disclosures from companies in the food sector).

In this latest action, we are calling on the UK Government to:

  • Introduce new legislation on mandatory reporting of sales-weighted metrics, as recommended by the National Food Strategy.
  • Consider the full range of regulatory tools at its disposal – including fiscal interventions and enhanced regulation - to promote sustainability in the food system, focusing in particular on internalising the externalities currently borne by the environment and society.
  • Be bold and ambitious in its response to this major social and environmental challenge.

View the full letter.

Sophie Lawrence, senior ethical, sustainable and impact researcher at Rathbone Greenbank Investments said: “This investor group recognises the multitude of risks and opportunities facing the food industry linked to issues such as nutrition and food waste. At the same time, the food system is a major driver of climate change and biodiversity loss. The incidence of obesity – a key risk factor in cases of severe Covid-19 – is also rising across the world. These sustainability challenges present severe risks to the way in which the world produces, processes and consumes food. It’s clear that the food system in its current state is unsustainable and ambitious action is needed to realign it to work for people and planet.

"A key challenge for investors to date has been the lack of consistent, high quality and meaningful information on the nutrition and environmental performance of companies within the food sector."

A key challenge for investors to date has been the lack of consistent, high quality and meaningful information on the nutrition and environmental performance of companies within the food sector. While there are examples of good practice in individual disclosures, a lack of common metrics means investors are often limited in our ability to direct capital toward the companies which are taking a proactive and leading approach to sustainability issues. We therefore welcome the recommendation of clear and consistent mandatory reporting requirements for companies in the food sector.”