ATNI and Investor Group Help Align Food Reporting Standards

One in five deaths globally is associated with a poor diet. As the hidden costs of the food system mount, the need for corporate accountability becomes greater than ever. However, for that to be achieved, investors and regulators need universal and clear standards to measure baselines and progress of the industry's transition to more nutritious product portfolios. Today at City, University of London we release results of a year-long study that offers a way forward.

Urgent action required to turn the tide

Recent assessments including this 2021 study from ATNI (Access to Nutrition Initiative) and The George Institute show that most packaged foods available globally in modern retail environments are unhealthy. Trends indicate that the availability of unhealthy foods is also on the rise. Only four of the largest 14 food companies report on nutrition as a material issue, as we reported in June with Planet Tracker and GAIN through the first-ever materiality of nutrition assessment. Unfortunately, these few disclosures are heterogeneous, mostly qualitative, and rarely target-oriented.

Too many standards are as good as no standards??

To illustrate the problem, there are up to 400 different models used sporadically to measure the healthiness of food products and portfolios. Many are company-specific or serve a limited purpose, such as front-of-pack labelling. About 80 nutrient profile models (NPMs) are developed or endorsed by governmental or intergovernmental organizations and used in government nutrition-related policies and regulations. This lack of standardized nutrition performance measurement hinders the ability of several stakeholder groups, including investors, to monitor and analyze the industry's progress toward more nutritious product portfolios.??

Aligning on food sector reporting standards

Against this backdrop, ATNI conducted a research series, launched in June 2023 and funded by the Pictet Group Foundation , aimed at aligning the sector. The research focused on NPMs used to define, measure and report on healthy foods.? A three-round Delphi process facilitated cross-sectoral stakeholder alignment. A total of?86 experts from 14 countries participated in this research, including representatives from the food industry, investors, academic experts, non-governmental organization representatives (NGOs) and others.?

During the Delphi Rounds, participants aligned on the critical metrics of NPM transparency and governance, underlying principles, nutrition information and reporting.? Three NPMs were found to be appropriate for future investor reporting: Health Star Rating (HSR), Nutri-Score, and the UK NPM.? The full report can be accessed at this link .

From research to call to action?

Following this extensive consultation, we call on the sector to use one of these three government-endorsed nutrient profiling models to measure the healthiness of food portfolios. We are supported in this call by ?88 institutional investors, representing $21 trillion in assets under management, who have endorsed ATNI’s Investor Expectations . These investors recognize that packaged foods adversely contribute to diet-related mortality and morbidity. The recommendations of this project further strengthen the guidance on NPM use in the Investor Expectations.

"We, as members of ATNI’s Investors in Nutrition and Health , urge all food and beverage manufacturers and retailers to benchmark their product portfolios against at least one of the three NPMs -- Health Star Rating (HSR), Nutri-Score, and/or the UK NPM -- and to utilize the proposed ATNI reporting guidelines to enable investors to better gauge and compare the healthiness of? products and sales.”?

Fortunately, a few industry leaders are already benchmarking their products against one of these NPMs, such as Unilever, Danone, Nestlé, Grupo Bimbo, Arla and PepsiCo. Mark Schneider, (outgoing) CEO of Nestlé reported last year:??"We have benchmarked all in-scope products using the Health Star Rating (HSR) system – a nutrient profiling system applied by the Access to Nutrition Initiative (ATNI) – and we have also disclosed sales from our wide range of specialized nutrition products, which are not covered by the HSR system."

So, what's next??

ATNI has been advocating for greater corporate disclosure since 2018. Our benchmarks – the ATNI Indexes - were the first to establish company performance baselines in nutrition, allowing investors, policy makers and the manufacturers to access independent data on the healthiness of product portfolios across the sector.

Our indexes include a sales-weighted average score at both the portfolio and product category levels, which drives improvements across the entire portfolio, including the least healthy products.?Furthermore, the reports detail the percentage of sales revenues derived from products that meet a ‘healthy’ threshold, encouraging the industry to achieve a target of 50% of sales from healthier products.

However, as long as there is significant variation in the amount of data submitted, sufficient grey areas will remain, slowing progress towards key targets. Full and consistent disclosure, based on recognized nutrient profile models, is essential.

Internationally, there is already strong support for incorporating nutrition into sustainability standards. Emmanuel Faber, Chairman of ISSB and former CEO of Danone , spoke to ATNI in June 2024, raising the need for clear standards and urging regulators to take the lead.

“First, regulation will be key to driving the required changes. Two, consumers will not be the main driver of this change. And three, investors need to play a role, but to date they have been hampered by a lack of disclosure on nutrition. At ISSB, we are establishing a new global accounting language for sustainability to create clear accountability in disclosures to capital providers and establish a link with the financial statements."?

At the national level, we also see important initiatives being taken. ATNI welcomes recent progress on measuring the healthiness of food portfolios in the UK by Nesta , BiteBack and ShareAction using an adapted ATNI approach.? ATNI is also actively pursuing opportunities for better corporate reporting on nutrition in both Kenya and India.

In the short-term, ATNI, our partners and our investor network support voluntary disclosures using the three NPMs outlined here (HSR, Nutri-Score, UK NPM). In the medium- to long-term, we need to see mandatory corporate reporting on the healthiness of product portfolios.