Big Food Should Be ESG’s Next Target: Ultra-Processed Food Makers and Their Impact on Health

The rise of ESG (Environmental, Social, and Governance) investing has brought new scrutiny to companies across various sectors, prompting them to address their environmental and social impacts.

The rise of ESG (Environmental, Social, and Governance) investing has brought new scrutiny to companies across various sectors, prompting them to address their environmental and social impacts. However, one crucial aspect seems to be missing from the ESG radar – the health impact of ultra-processed food (UPF). As the evidence linking UPF to serious health issues continues to mount, it is becoming increasingly evident that the makers of such comestibles need to be held accountable for the damage they are causing to their customers’ health.

Ultra-processed food, often loaded with emulsifiers, low-calorie sweeteners, and various additives, has been linked to a range of health problems, including obesity, diabetes, heart disease, and even early mortality. Nutritionists and doctors worldwide have expressed concern over the negative effects of UPF on public health. However, the ESG investing space has yet to fully address this critical issue.

ESG investors, in their quest to assess companies’ sustainability performance, tend to focus heavily on environmental factors, such as carbon emissions and biodiversity, as well as social aspects like diversity and inclusion. While these factors are undoubtedly essential, the health impact of companies’ products should not be overlooked.

As the global food industry grapples with the growing health crisis caused by UPF, it is becoming clear that it is a matter that should concern the vast sustainability teams employed by fund managers worldwide. With UPF being a leading holding in many portfolios, the regulatory risk and public health implications cannot be ignored. It is time for the ESG community to recognize the significant role food companies play in shaping public health and well-being.

Just as companies can mitigate their carbon emissions by purchasing carbon credits, or builders can offset their environmental impact with biodiversity credits, perhaps it is time for big food corporations to be held accountable for the health consequences of their products. The concept of “nutri-credits” could be explored, where companies contribute a portion of their profits to health-related initiatives, such as the National Health Service (NHS) in the UK or gut-health education groups.

By taking responsibility for the health impact of their products, food companies could earn positive ESG ratings that go beyond mere environmental and social checkboxes. Investors and consumers alike could reward those companies that prioritize the well-being of their customers and actively work towards reducing the harm caused by their products.

It is crucial for the ESG community to recognize that the harm caused by UPF is not a matter to be taken lightly. It is a public health crisis with far-reaching consequences. As ESG investing gains momentum and companies are held accountable for their actions, addressing the health impact of food production should be a top priority. By encouraging food companies to adopt healthier practices, ESG investors can play a pivotal role in shaping a more sustainable and health-conscious future for the food industry and society as a whole.

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