We discuss the benefits of collaborative engagement to reduce the social health impacts of the global food system.

Key points

  • The current food system is unsustainable and is having major detrimental impacts on both the environment and public health.
  • We see clear benefits of engaging collaboratively, and we are working with the Healthy Markets initiative to encourage companies to improve the nutritional content of their offering, as well as to understand the investment risks and opportunities associated with food and nutrition.
  • By working collectively, we believe that investors are better able to demonstrate the materiality of issues and achieve the outcomes they want to see in order for companies to have a real-world impact.

It is clear that the current food system is unsustainable – both from an environmental and a social perspective. The sustainability of our food system is one of Newton Investment Management Ltd’s engagement policy objectives this year, and our aim is to achieve improved nutritional content of food without placing a greater strain on the environment, as well as access to affordable, nutritious and sufficient food for global populations. We view a collaborative approach as an effective way to engage with companies on this topic, and have been working alongside ShareAction’s Healthy Markets initiative, which focuses on improving the health of society.

We have previously discussed the detrimental impacts of our food system on the environment, including risks to the climate, biodiversity, and water; however, equally important are the consequences for public health. According to the Access to Nutrition Index, one in three people globally are affected by obesity; over two billion people have macronutrient deficiencies; and, in 2017, 11 million deaths were attributable to nutrient-related issues.1 These problems have significant ramifications for the economy, too – 8.4% of health expenditure in OECD countries is expected to be used to provide treatment for obesity-related diseases from 2020 to 2050.2

The food system is a hugely systemic risk, and it is for this reason that engagement is so important. We have been working with ShareAction’s Healthy Markets initiative, which helps investors in four ways: to engage collaboratively with other investors; to learn about key health topics from leading research organisations; to advocate through AGMs, letters, and roundtables; and to drive real impact by bringing investors together to file shareholder resolutions. This has given us a deeper understanding of risks and opportunities related to food and nutrition, as well as the opportunity to engage with companies alongside other investors.

Expert access

We recognise that we are generalists when it comes to environmental, social, and governance (ESG) and sustainability analysis, so by having access to a range of technical experts at the Healthy Markets campaign, we are better able to make detailed assessments of companies, understand the impacts of their products, and make more credible judgements so that we can understand where the risks may lie in the investment portfolios we manage. We have also been able to gain a deeper understanding of the evolving regulatory requirements that affect food retailers and manufacturers. There is increasing pressure on governments to address this health crisis, which leads us to believe that the food system is an area ripe for intervention at a governmental level, and where regulation looks set to continue to increase exponentially.

In addition, there are clear benefits of engaging with companies in a collective approach. This is an area where technical understanding is incredibly important, and so when investors engage with businesses and set specific requests individually, they run the risk that a lack of understanding of the detail and inconsistencies in these requests can place an undue burden on companies to report varying flavours of the same issue, therefore not having the intended impact.

Furthermore, by working alongside other investors, we are able to achieve increased leverage through more bodies in the room and overall higher assets under management represented. As a result, we are better equipped to demonstrate to companies the materiality of certain issues and to do this in a consistent manner. This is a more efficient and effective way of achieving the outcomes we want to see in order for companies to have a real-world impact.

Not only equities

While investor engagement is often discussed from an equity-holder perspective, we should not lose sight of the importance of engagement for debt holders too, and we have experienced success with engaging on our fixed-income securities. Earlier this year, Healthy Markets led engagements with Tesco, which resulted in the company setting a target to increase the proportion of sales from healthier food products. While there is a slight difference in how we would approach fixed-income engagements and what the investment implications are, there are clear downside risks if debt holders do not manage their ESG risks, and therefore we would encourage this to be an area of focus for all investors.

As investors, we are not the only group that can have an influence on companies; there is a range of stakeholders that are looking to engage with and change the behaviour of companies, and by taking a collaborative approach to engagement with a variety of stakeholders, we are able to have a greater impact not only at company level, but also on the policy side.  A good example of this is the work that the Healthy Markets initiative, in conjunction with the Food Foundation and others, has done around the National Food Strategy letter by urging the government to establish mandatory reporting for retailers. Greater transparency means that investors are better able to assess the risks and opportunities, and also allows for easier comparability across the sector. The Healthy Markets initiative therefore provides us with an effective forum to put forward our views and to provide an investor’s perspective on the discussion around health and nutrition.

The Covid-19 crisis has highlighted the urgency of improving the nutritional health of society and, by working alongside the Healthy Markets campaign, we have been able to see real outcomes from our engagements, as well as gain a deeper understanding of the implications of our food system for investors. We do not think about this purely as being a good steward of our clients’ assets; we believe that we have the potential to contribute to creating a more stable food environment for the future, which will naturally have an impact on the investment portfolios we manage.


  1. Global Index 2021 Executive Summary, Access to Nutrition Initiative, 1 July 2020
  2. The Heavy Burden of Obesity: The Economics of Prevention, OECD, accessed 10 November 2021


Rebecca White

Rebecca White

Global ESG integration lead


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