Simon Jessop & Siddharth Cavale

LONDON (Reuters), – Investors in Unilever filed a renewed resolution on Thursday urging it to address a strategic blind spot and to set lofty goals for selling healthier products.

Unilever is required to reveal the actual sales percentage for healthier products following the resolution of an eleven-strong investor group, consisting of Candriam/Actiam and Greater Manchester Pension Fund.

The company is also urged to establish a goal to increase its share “significantly” by 2030 and to publish an annual report on their progress.

While Unilever, owner of the Ben & Jerry’s ice cream, Hellmann’s mayonnaise and Pot Noodle brands, is seen as a leader in sustainable business by many funds, the investors said increasing regulations around health meant a failure to act could hit its finances.

As obesity increases, many countries have imposed taxes on sugary or calorie-rich products.

“Unilever has long been a sustainability leader. It is often criticized for its excessive focus on ESG. But the health profile for the foods and drinks it sells continues to be a blind spot,” Ignacio Vazquez said, who was a senior manager with ShareAction, responsible investment NGO that coordinated the resolution.

Terry Smith is a British fund manager and investor in Fundsmith. He lambasted Unilever last Wednesday for its obsession with sustainability at the cost of performance.

“By voicing their support for this resolution, Unilever’s investors can help to drive change at the heart of one of the biggest foods and drink manufacturers in the world while also shielding themselves from regulatory and reputational risks,” Vazquez said.

Unilever responded by saying it agreed with ShareAction about the value of a long-term strategy in nutrition and health. It also stated that they had set publishing goals and made an agreement to lower sugar, salt, and calories in their products.

Company stated that it intends to upgrade its model for nutrition assessment by 2022. “Making it more stretchy and ensuring it better reflects the current portfolio and our role in consumers’ diets, this will be done,” said the company.

This resolution is similar to the one ShareAction made last year at its AGM. It was unsuccessful in bringing about much change, according to ShareAction.

Unilever stated that 61% (of its 2020 food and drink sales) were made of foods with high nutritional standards, but investors disagreed.

“It is key that a company with such a scale of leverage and capacity demonstrates efforts to set its targets and disclosures on the basis of government-endorsed nutrient profiling models where it operates,” Sophie Deleuze, lead ESG analyst of engagement & voting at Candriam, told Reuters.

Deleuze asked Unilever for a risk assessment in all countries it has operations. This should include factors such as current and future regulatory pressures and customer health profiles.

It comes in a difficult time for GlaxoSmithKline. On Wednesday, the company effectively abandoned a proposal worth 50 billion pounds (or $68.11 billion). The plan was to acquire the GlaxoSmithKline’s consumer health division.

Investments have become increasingly concerned about the promotion of healthy food and beverages. Last year, 12.4 trillion-dollar investors urged policymakers for fiscal and regulatory reforms to address what they called a “global nutritional crisis.”

($1 = 0.7341 pounds)