Swiss food giant Nestlé is under pressure to produce healthier food. 
A coalition of investors, led by ShareAction, has filed a resolution asking the maker of Kit Kat chocolate to set targets to increase sales of healthier foods, at a time of surging ill health related to poor nutrition worldwide. It also wants Nestlé to implement internationally accepted standards that define healthy food.
For the measure to pass at least 50% plus one vote of the registered share capital represented at the annual meeting in April would need to be cast in favour of the resolution.
Pressure is growing on food companies to make their range of products healthier, especially with obesity becoming a global health crisis in much of the developed world and on the rise in emerging markets. Unhealthy diets are a driving factor behind the global growth rates of obesity, increasing the risk of diabetes, heart disease, stroke and some cancers, according to the World Health Organization. The health agency estimates that obesity will cost the global economy $4.3-trillion a year by 2035.
The move by ShareAction comes about six months after the responsible investing charity criticised the world’s biggest food maker for relying too “heavily on sales of less healthy foods” and not doing enough to drive sales of more nutritious products.
While there have been discussions with Nestlé since then, they have reached “an impasse”, according to Maria Larsson Ortino, Senior Global ESG Manager at LGIM.
“The company claims in its mission statement that its products have ‘the power to enhance lives,’ in reality three quarters of Nestlé’s global sales are unhealthy products containing high levels of salt, sugar and fats,” said Catherine Howarth, chief executive officer of ShareAction.
She added that as Nestlé has “consistently failed” to set out how it will shift the balance of its sales toward healthier food options, investors have had to bring forward a resolution at the company’s annual meeting.
Nestlé said ShareAction is targeting the wrong company and it would “have to agree to disagree” with the investor coalition. The assertion that 75% of the company’s sales are unhealthy is wrong, said a spokesperson, adding that Nestlé was the first food company to measure the nutritional value of its entire portfolio against a government endorsed rating system.
“Our goal is to achieve success across all segments of our portfolio, ensuring that we responsibly address the diverse needs and preferences of all our consumers,” he added.