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Table 1 Actor level challenges and associated opportunities to the consideration of issues related to nutrition and obesity as part of institutional investment decision-making

From: Integrating nutrition and obesity prevention considerations into institutional investment decisions regarding food companies: Australian investment sector perspectives

Actor

Theme

Challenges

Opportunities

Employees within investment organisations

Experience and training

• Level of experience and training regarding ESG investment

 

Internal pressure/buy in

 

• Employee interest/passion for addressing ESG issues, including nutrition- and obesity-related issues

Investment organisations

Competing duties and issues

• ESG ‘issue overload’ makes it difficult for food systems related issues (including obesity) to be high on the agenda

• Perception that addressing ESG issues conflicts with fiduciary duty

 

Extent of topic-specific knowledge

• Limited understanding of issues related to nutrition, obesity prevention and food systems

• Difficulties in defining what healthy food systems look like

• Complexities around addressing nutrition and obesity as an ESG issue (not clear cut like other ESG issues, e.g., tobacco)

• Increase knowledge of what best practice looks like

• Frame issues related to nutrition and obesity prevention using the SDGs

• Harness opportunities to frame nutrition and obesity prevention as an ESG issue as responsible investment shifts from niche to mainstream

Investment ethos and approach

• Many institutional investors think about ESG in terms of financial impact only (i.e., simplistic and superficial terms)

• Philosophical view amongst investment sector that environmental issues are easier to address (and more important) than social issues

• External management of funds (e.g., superannuation funds that outsource to asset managers) can narrow ESG focus

• A longer-term investment horizon can facilitate consideration of ESG issues (e.g., unhealthy diets and obesity)

• Universal ownership (i.e., highly diversified portfolio) can increase attention to ESG issues

• Active management style (versus passive management style) can facilitate ESG engagement and portfolio selection

• Ethical values (e.g., exclusion of certain industries based on ethical views) can override financial imperative to support ESG goals

Exposure to food companies

• Limited opportunities to invest in and engage with food and agricultural companies on the Australian Securities Exchange (ASX)

• Perception that issues related to nutrition and obesity prevention are only relevant to multinational food companies

• Australian investors have less power to exert ownership rights over international equities (e.g., food companies)

• Highlight investment opportunities in healthier food companies

• Impact investing / venture capital can enable investment in positive food-related ventures

Member/client demand

• Lack of demand for addressing ESG issues by superannuation fund members/clients

• Lack of demand for responses to obesity-related ESG issues by superannuation fund members

• Client/member demand can increase investor attention to ESG issues (e.g., unhealthy diets and obesity)

Brand reputation

• Narrow focus on ‘headline’ issues that capture public and government attention

• Investors may follow what others are doing to address ESG issues (herding behaviour)

• Competitive advantage can be gained from demonstrating leadership on ESG themes

Demonstration of financial risks

• Lack of clarity around the link between food systems related issues (including nutrition and obesity) and financial performance

• Need for further demonstration of financial risks (regulatory, legal, reputational) associated with ESG issues, including obesity

• Potential for framing regulatory risk as ‘real’ rather than ‘hypothetical’

Investment sector

Quality and availability of ESG data

• Shortcomings (e.g., inconsistent and inadequate data) of currently available ESG data and ratings

• Lack of quality benchmarks and data on food systems issues

• Increase uptake and use of appropriate food-related metrics by ESG research providers

• Increase understanding of how to compare and measure food company ESG impact and exposure

• Need for benchmarking and accountability initiatives that draw attention to food-related issues

Focus on systemic issues/crises

• Lack of systemic thinking around food systems related issues and responsible investment

• Perception that the links between healthy and sustainable food systems and climate change are not well established

• Systemic risks can spur action on ESG issues

• Opportunities to highlight the systemic nature of obesity

• COVID-19 is an entry point for discussion around health

• Ability to demonstrate the links between climate change and food systems

Exercising voice through collection action

 

• Investor involvement in political advocacy and public policy engagement can facilitate consideration of ESG issues

• Co-ordinated engagement with other investors/ advocacy groups can enhance advocacy

Governments

Regulatory measures and legal constraints

• Perceptions about legal constraints to considering ESG in investment decision making

• Obesity-related regulatory measures in Australia and internationally can raise primacy of issue amongst investors

• Regulatory changes and legislation to address ESG issues can spur investment action on particular issues

Resourcing and leadership

• Lack of governmental leadership to address food systems issues in Australia

• Few governmental resources dedicated to food systems issues in Australia

• Australian government vocal against ESG-related engagements by investors

• Government inaction on ESG issues may prompt the investment sector to act

• International government requirements and conventions (e.g., EU taxonomy) can strengthen action on ESG issues

Non-government organisations

Media attention and public opinion

 

• Level of controversy associated with particular ESG issues triggers action

• Level of attention to ESG issues in the media can increase attention to ESG issues

• Public opinion can facilitate the consideration of ESG issues by investors

Advocacy

• Limited groundswell on food systems related issues in Australia

• Difficult for small advocacy initiatives to demonstrate the cumulative risk of food systems related ESG issues (e.g., unhealthy diets and obesity)

• Advocacy groups can promote action on food systems issues

• Emotive stories can help to convey the importance of addressing ESG issues to investors

• Activities of watchdogs and advocacy groups can promote accountability

  1. ESG = environmental, social, governance; EU = European Union; SDGs = Sustainable Development Goals