Nutrition and Health - Case Study
As an active, responsible and long-term investor, the issue of health is a crucial topic.
Access to Nutrition
As part of the Access to Nutrition Initiative we have led the engagement with French food producer Danone, supported by 25 other investors.
In the index produced by the Access to Nutrition Initiative, Danone’s score decreased from 6.3 out of 10 in 2018, to 5.8 in 2021. This puts it in fourth place, although it ranks first in the category of ‘product profile’ and has the highest average health score, thanks to the nutritional quality of the products sold.
During the engagement, many topics were discussed:
- the inclusion of ESG metrics related to health and nutrition in the CEO’s remuneration; the implementation of salt/sodium targets;
- the accessibility and affordability of healthy products to a wider population;
- the labelling of products and;
- the reduction of marketing to children or lobbying.
We met with Danone 10 days after the arrival of its new CEO, so it was too early to address some issues. These included, for example, the inclusion of health and nutrition metrics in remuneration, or the extension of a policy of accessibility and affordability to a wider population. These are questions that will have to be looked at in the longer term.
Nevertheless, some answers have been provided, notably on potential salt/ sodium targets for specific products, a recent update of the marketing policy towards children and the collective industrial approach expected to evolve this issue further.
Finally, the reorganisation of Danone, both in terms of governance and reporting systems, implies a communication of the percentage of sales of healthy products (instead of percentage in volume), will only be possible over a three-to-four-year horizon.
The new CEO has been in place for a few months now, and in this respect, it would be good to understand how the new management is working to ensure that the topic of nutrition remains a priority and continues to be part of Danone’s progress.
It will also be interesting to understand whether the appointment of the new Chief Sustainability Officer and the forthcoming appointment of the new Chief Research, Innovation and Food Safety Officer might accelerate the positive transformation of the nutritional profile of the Danone portfolio.
Novartis ranks highly on the Access to Medicines Index, at second overall and first for product delivery. In collaboration with NN Investment Partners, we engaged with Novartis to encourage further progress on opportunities identified by the Access to Medicines Foundation. Specifically, we discussed Novartis’ implementation of access planning across all research and development programmes and encouraged them to diligently report on this.
Novartis has responded to this opportunity by increasing its access planning efforts. The company started by developing access plans for medicines at launch and phase 3 clinical trials. In our discussions, Novartis also highlighted its ambition to go further by producing detailed access planning for all relevant drugs in phase 2b clinical trials and creating initial access plans for relevant drugs at even earlier stages of development.