Tesco faces shareholder challenge over its role in UK obesity crisis

A coalition of institutional and retail investors have filed the first health-based shareholder resolution at a FTSE100 company, calling on the UK’s largest food retailer to set targets to increase the proportion of healthy products in its sales.

The resolution, coordinated by responsible investment NGO ShareAction, is being co-filed by seven institutional investors managing over £140bn in assets, along with 101 retail investors. It reflects rapidly rising investor concerns with companies’ health impacts, seen until recently as a fringe issue even by many advocates of ESG investing. 

But with severely obese people three times more likely to be admitted to intensive care with COVID-19, the pandemic has highlighted the urgency of tackling mounting obesity levels to build a healthier and more resilient society.

The investors filing the resolution argue that Tesco, as the market leader with 27% of Britain’s grocery market, plays a central role in shaping the nation’s diets and must reduce its reliance on unhealthy products for sales growth. They also highlight that Tesco’s performance on health issues lags behind some of its peers, while new health regulations and consumer trends pose a risk to the business.

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