Switzerland—Nestlé, a multinational food and beverage company, is facing scrutiny over its pledge to boost sales of healthier products by 50% by 2030, claiming that the results fall short of investor expectations.
These investors, particularly ShareAction, are criticizing Nestlé’s commitment, asserting it does not adequately address public health concerns – they highlight concerns about the inclusion of products like coffee, which they argue lack nutritional value, and baby food.
For instance, Maria Larsson Ortino, a senior global ESG manager at Legal & General Investment Management, disclosed that discussions with Nestlé regarding their target have reached a dead end.
“We therefore deemed the next appropriate step to be to co-file this shareholder proposal. We want to press home to the Company, and to the food and beverage sector as a whole, the importance we place on nutrition,” Larsson Ortino added.
For the proposal to succeed, at least 50% plus one vote of the registered share capital represented at Nestlé’s annual meeting in April must support it.
Nestlé has reported that 38% of its net sales, excluding pet care and specialized nutrition, are derived from products considered “healthy” according to the Health Star Rating system. However, this figure has only increased by 1 percentage point from the previous year.
In response to ShareAction’s critique, Nestlé expressed disagreement and refuted the claim that 75% of its sales come from unhealthy products.
“ShareAction is targeting the wrong company. … While we take note of ShareAction’s perspective, we disagree with the notion that we should aim to limit growth in specific areas of our portfolio,” Nestlé claimed.
In its response, the company further said that competitors should also be held to similar standards adding that a proportional target would require weakening valuable parts of its portfolio without yielding significant public health benefits.
Nestlé also defends the inclusion of products like coffee and supplements in its portfolio, stating that they are consumed daily and contribute to overall sales.
The maker of Milo and Nescafé was also took the opportunity to highlight that it was the first food and beverage company to be transparent about the nutritional value of every product in its portfolio, doing so against a nutrient model approved by the government.
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