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 |