Investment markets can only ever be as healthy as the environment and communities that support them. From tackling obesity to addressing workplace ill-health, investors can play a key role in driving positive change.
The private sector undertakes a great many activities that affect people’s health, both positively and negatively. Within a company’s immediate sphere of influence, its approach to the health, safety and welfare of its own workforce can have a direct impact on its profitability. More broadly, the products or services that a company manufactures or sells come with consequences for customers and society.
Where products or services have the most significant, unmitigable, negative impact upon public health, we restrict investment in the associated companies. For instance, CCLA applies a 5% revenue restriction to tobacco that applies to all portfolios. Elsewhere, we aim to use our voice as shareholders to drive positive change.
Where we identify a risk that is specific to a company in our portfolio, we engage directly on a 1:1 basis. During 2022, this engagement covered a range of themes, including occupational health and safety, nutrition, and infant formula product safety and marketing.
Where we identify a major systemic risk (one that affects most or all companies), we aim to mobilise the investment community into action to address it. In 2022, this took the form of a new benchmark to assess and compare companies on their approach to workplace mental health.
At CCLA, we believe that investment markets will only be as healthy as the environment and communities that support them. Health is a key engagement priority for us.
Recent engagement with Unilever, PepsiCo, Nestlé and Coca-Cola aims to persuade these companies to commit to producing healthier products and to make these products more accessible, more affordable and more available. Our specific asks relate to disclosure, target setting, and reporting on progress against those targets.
On the back of engagement, Unilever has pledged to set a new industry-leading standard on transparency around sales of healthy foods. It announced the new measures in a public statement on 7th March 2022 and has now disclosed the ‘healthiness’ of its global portfolio against six government-endorsed nutrient profiling models, in both sales volume and revenue.
Nestlé has introduced new nutritional commitments. These commit the company to steps including, but not limited to: benchmarking and disclosing the nutritional information of its products in 14 countries, raising the target age of marketing of unhealthy foods, ceasing marketing on gaming platforms where the user base is significantly made up of under 16s, and setting new targets for the sale of ‘healthy’ products.
Talks are underway with Coca-Cola and PepsiCo, as part of our support for the Access to Nutrition Index.
CCLA’s approach to pushing for change also includes policy engagement. As part of a coalition of investors we have been pushing the UK Government to implement the recommendations of the National Food Strategy. In 2022, this included meeting the then Minister of State for Farming, Fisheries and Food at the Department for Environment, Food and Rural Affairs (DEFRA), and representatives from the Department of Health and Social Care.
In having a watertight health and safety/accident prevention policy, businesses are better able to manage risks of accidents at work, thereby reducing injuries on-site, saving the company money, boosting productivity and safeguarding corporate reputations. Health and safety includes both physical and mental health, and is therefore relevant to every company with workers.
We establish whether companies disclose a health & safety/workplace accident prevention policy and if that policy applies to all direct operations, including subsidiaries. We aim to engage where a policy is not disclosed. In 2022, we engaged with the following companies on occupational health and safety: Accenture, Admiral, Aveva, Honeywell International. Intercontinental Hotels Group, Kerry Group. Keyence Group, Keywords Studios.
We started engaging with companies on workplace mental health in early 2019, and in 2022, we launched the CCLA Corporate Mental Health Benchmark: a tool designed to shine a spotlight on corporate mental health practices for the first time. It provides an objective assessment of 195 listed companies who together employ more than 24 million people. Companies will be assessed annually to measure, track and recognise improvements.
By the end of 2022, eleven companies, employing between them over 2.6 million people, had already taken steps to enhance mental health practice and disclosure as a result of our work: Amazon, AstraZeneca, BHP Group, Experian, Ferguson, HSBC, Novo Nordisk, PepsiCo, Shell, Unilever, and Vodafone. A further 33 companies had stated their intention to use our recommendations to improve their approach.
We know that to truly affect change in the world, we need to collaborate with other investors. In 2022, we convened an $8.5 trillion global alliance of institutional investors to back the project. With an appropriate measure of respect and encouragement, a powerful combination of benchmarking and investor engagement is changing the face of corporate mental health.