Abstract
IntroductionResponsible investment (RI), in which environmental, social and governance (ESG) considerations are incorporated into investment decision making, is a potentially powerful tool for increasing corporate accountability and improving corporate practices to address broad societal challenges. Whilst the RI sector is growing, there is limited understanding of the extent to which pressing social issues, such as obesity and unhealthy population diets, are incorporated within RI decision making. This study aimed to investigate the extent to which obesity prevention and population nutrition are considered by Australian institutional investors engaged in responsible investment.MethodsA desk-based review was conducted of investment approaches of prominent Australian asset managers and superannuation funds identified as engaged in responsible investment. Relevant information on the incorporation of ESG issues related to obesity and population nutrition was extracted for each investor, drawing on websites, published policy documents and annual reports. Strategies were categorized as: (1) negative/exclusionary screening; (2) positive/best-in-class screening; (3) norms-based screening; (4) ESG integration; (5) sustainability-themed investing; (6) impact/community investing; and (7) corporate engagement and shareholder action. These strategies were compared across investors and by themes related to obesity and population nutrition.ResultsEighteen of the 35 investors indicated that they applied investment strategies that considered issues related to obesity and population nutrition. The most commonly identified strategy was ESG integration (n = 12), followed by sustainability-themed investing (n = 6), and positive screening (n = 4). The ways in which obesity and population nutrition were considered as part of these approaches included relatively high-level general health considerations (n = 12), considerations around the healthiness of food company product portfolios (n = 10), and consideration of specific company nutrition policies and practices (n = 4). The specificity and depth to which RI strategies were disclosed varied.ConclusionThere is significant potential for investment decisions to contribute to efforts to address key social issues, such as obesity and unhealthy diets. Some institutional investors in Australia have recognized the potential importance of incorporating obesity- and population nutrition-related issues into decision-making processes. However, the extent to which these considerations translate into investment decisions and their impact on companies in the food sector warrant further exploration.
Highlights
IntroductionWhilst the Responsible investment (RI) sector is growing, there is limited understanding of the extent to which pressing social issues, such as obesity and unhealthy population diets, are incorporated within RI decision making
Responsible investment (RI), in which environmental, social and governance (ESG) considerations are incorporated into investment decision making, is a potentially powerful tool for increasing corporate accountability and improving corporate practices to address broad societal challenges
The most prominent asset managers and superannuation funds operating in Australia that are engaged in responsible investment were identified from recently published (2019) reports by the Responsible Investment Association of Australasia (RIAA)
Summary
Whilst the RI sector is growing, there is limited understanding of the extent to which pressing social issues, such as obesity and unhealthy population diets, are incorporated within RI decision making. Australians are not consuming diets in line with dietary guidelines, with only 1 in 10 Australian adults consuming enough vegetables, and one third of energy in the Australian diet coming from unhealthy foods and beverages (Australian Institute of Health and Welfare, 2018). This has wide ranging impacts for health, and the economy. Considering the extensive health and economic costs, overweight and obesity presents one of the most pressing social issues facing the Australian population
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