Year 2 of the Access to Nutrition Index

SM: The Access to Nutrition Foundation just released the second edition of its Global Index. Can you talk to us about the importance of the data the Index provides for companies and investors,how it can be used to foster a race to the top among companies and how it helps to move the work of increasing access to nutrition forward?

IK: The Global Access to Nutrition Index measures what companies are doing to address both over- and under-nutrition worldwide, major global challenges, as one out of three people today are either under or over weight. Companies have a major impact on both the quality and the quantity of food that is consumed so it’s essential that they play a role in solving these problems. The Global Index measures companies’ performance on nutrition concerns and provides a benchmark for companies. It’s a source of inspiration for companies where they can learn what they can do to improve their contributions. But the rationale is also that investors, policymakers and civil society organizations are very influential with companies and so by providing independent evidence-based information to them on company performance, they can all engage better with companies on nutrition issues. We publish individual Scorecards for companies – 3 to 5 page papers describing strengths and weaknesses for all areas of performance that we assess,  as well as best practice examples in the main report. Investors can use that information in their engagements and ultimately, of course, to inform their investment decisions.

LC: Indices like the Access to Nutrition Index (ATNI) and the Access to Medicine Index (ATMI) provide a level of transparency and comparability of metrics that are essential.  Companies are assessed on the same set of metrics, and the comparable data year over year allows investors to benchmark improvements (or lack thereof) in company performance.  For companies this sets up a friendly “coopetition”-- which may inspire them to improve their practices.  I have seen this through our own dialogues with several companies we work with - Pepsico, Unilever, Danone and Mondelez. We’ve seen the ATNI provide an internal incentive that encourages companies to commit further resources to engage with the Index, provide more information and ultimately, improve their practices.  Finally, the ATNI and ATMI help establish a standard set of metrics for assessing and benchmarking relative company performance and highlights gaps both at the company and industry level.  We’ve also seen how the indicators can incentivize companies to stretch and challenge themselves to meet the goals established by the indicators.

SM: It gives companies a view of what’s expected of them. If this is about creating systemic change, do the indicators help to point the way forward?

LC: Yes, it’s a roadmap actually, for where we need to see companies go.

IK: The highest score was 6.4 for Unilever (out of 10) so there’s still a long way for all companies to go to meet the standards embodied by the methodology. The methodology reflects both formal standards set by organizations like the WHO and Codex as well as the expectations that investors and other stakeholders have of them, so in that way it is indeed a roadmap. In terms of key findings from this year’s Index, we have seen gains made by most companies in terms of a more intentional integration of health and nutrition into strategic planning which has translated for some into reformulation to improve the nutritional profiles of their products and into improved nutritional labeling. Where we haven’t seen as much progress as we’d like is in the area of responsible marketing to children and improving the accessibility and affordability of healthy products.

LC: There are some disturbing trends in nutrition that present clear business risks and should help provide insights to companies. For example, by 2030 50% of the world is expected to be overweight or obese. Obesity represents a 3% drag on GDP and obese patients pay 40% more for their healthcare. Importantly, consumers are becoming savvier about reading labels: by 2013, half of consumers were reading labels and choosing foods based on ingredients and nutritional information. A very telling statistic is that leading U.S. brands are losing market share and revenue – U.S. $18 billion since 2009 - as a result of unhealthy offerings.

SM: How do you see the Index influencing companies in terms of food justice concerns and how they may, or may not, adapt their practices to suit individual markets?

IK: There’s a difference between practices in the U.S. and elsewhere in the world. Here in the U.S. regulation might be stricter, advocacy groups might be more vocal and so companies are held to a higher standard. In developing countries that is often not the case.

LC: U.S. companies have quite a gap in terms of consistency across global markets. Companies don’t apply their nutrition strategies consistently across the markets they’re investing in, and in emerging markets where sales are showing the most growth, we have seen how this can lead to inequality in terms of the provision of products and in marketing practices. One of the key statistics we need to be concerned about is how the Consumer Packaged Goods (CPG) industry is growing 10 times faster in emerging markets then they are in high income markets. This means that companies need to be especially vigilant in applying their nutrition standards on a consistent basis across all markets, otherwise there’s a huge gap and a risk for selling less healthy foods in less developed markets.

IK: In terms of equality for consumers worldwide, it is particularly important that companies apply their standards consistently everywhere, independent of legislation or the pressure of civil society groups. It is crucial that consumers get the same products, marketed responsibly to them, with the same nutritional information on labels, etc. but we still see differences in these areas, which raises concerns about food justice for consumers.

LC: One interesting, specific and core indicator is this whole issue of a nutritional profiling system. Only 13 of the 22 companies have implemented a nutrition profiling system and even fewer apply this globally to their entire food portfolio.  This is a basic, core management tool for addressing nutrition science and embedding better nutrition into the business model.

LL: We would like companies to notice that consumers are becoming more and more aware and demanding stronger standards: better products with better nutritional profiles and better labeling information. Companies that really grasp that and integrate that into their business practices are going to be tomorrow’s leaders, not only in their current markets but in emerging markets where the biggest growth is happening. So it’s important that companies are embedding nutrition in their business strategies. We see the leaders are doing this, so other companies have to emulate these leading practices and really build on that.

SM: How does using the information from the ATNI play out in actual dialogues and what are all of you at the ATNI learning from the companies that are participating that helps to inform the refinement of the Index?

LC: In many ways we’re not privy to basic information to help inform our engagement strategies; for example, understanding what percentage of a company’s annual sales are in healthier foods relative to the rest of their portfolio. Not having access to that quantitative data makes it difficult to understand if its marketing/advertising budget supports  growing its healthier foods portfolio. Lack of this basic information underpins the lack of a comprehensive nutritional strategy.

IK: Transparency and disclosure is where the change begins. So we’ve mentioned a couple of areas where there are still gaps; for example, marketing spending on healthier options where companies haven’t started or don’t want to share information about what they spend to market healthier foods. But there are also still companies that don’t engage at all with the Index. Companies are invited to add information and comment on information that Sustainalytics has provided but there were still companies that didn’t engage: 17 out of 22 engaged very actively in the process, the other five did not engage. For some, that might be caused by language barriers. For example, we had some new Chinese companies so we may need to invest in specific engagement strategies for the Asian market, but there were also companies like Heinz and Kraft that didn’t engage and aren’t publishing a lot of information on their website which is a concern, because it’s important for investors and consumers to see what brands are doing to tackle over-and under-nutrition. These companies are major brands and have a major impact on what consumers are eating, so our Index is also a call to action to these companies to engage in the coming editions of the Index.

LL: Nutrition is part of the broader responsibility of food companies to ensure sustainability and justice across all their operations and that includes responsible sourcing of ingredients, working conditions at all levels of the value creation chain and mitigating other adverse environmental or social impacts of their operations. Ultimately we want companies to have a holistic grasp of the extent of their responsibilities and nutrition is a key element of this big picture.

To learn more about the Access to Nutrition Index and to view rankings by company, please visit: https://www.accesstonutrition.org/index/2016