Investors representing GBP1 trillion in assets have endorsed a set of Schroders-led principles designed to better engage food and drink companies on the risks associated with global sugar consumption.
Schroders and Rathbone Greenbank have jointly produced a framework as a guide for investors to ensure companies are adapting to changing global attitudes towards sugar.
Public Health England has challenged the food and drinks industry to cut sugar by 20 per cent by 2020, while a recent health report showed there has been a 24 per cent increase in the number of teeth being removed from children aged four and under. A number of countries, including the UK in 2016, have also introduced sugar taxes.
There is growing evidence that consumers are responding to this medical and regulatory focus with, particularly in the US, the consumption of carbonated soft drinks declining.
The new Schroders/Rathbone Greenbank framework consists of five engagement principles; governance, strategy, implementation, public policy and demonstrating progress.
The goal is to provide investors with the tools to encourage food and drink companies to provide greater transparency on how they are adapting to the material challenges the sugar industry faces.
Elly Irving (pictured), environmental, social and governance analyst at Schroders, says: “The rise of global obesity, diabetes and diet-related disease is well known but we think the scale of the issue now makes this an investment concern. As this trend continues, we think companies will have to invest more in R&D, innovation and product reformulation.
“We believe that sugar is a material investment issue for all global fund managers and we would encourage investors to sign up to our robust framework and use this in engagement going forward.”
John David, investment director at Rathbone Greenbank, says: “By building a framework for gathering information and setting baseline expectations for companies to follow, we hope to raise the profile of sugar-related health concerns and seek to identify leaders and laggards in the relevant sectors.”
