Nutrition Metrics in ESG Investing
The Environment, Social and Governance (ESG) framework has become an increasingly critical tool to drive major investments and portfolio decisions based on a business’ environmental impact, social impact, and governance structure. Companies and investors recognize that financial returns and value are influenced by the impact on society.
Evidence-based ESG metrics are essential to leverage these trends for greater value and profit. The Global Reporting Initiative (GRI)--a leader in sustainability reporting—noted that 93% of the world’s largest companies reported on ESG information in 2019, up from only a handful when ESG began to be used in 1999. However, a major gap has been identified in ESG frameworks: assessment of impact of fod sector businesses on food, nutrition, and health. Our society faces a global nutrition crisis: sub-optimal diet is the leading cause of poor health worldwide. More American adults are sick than healthy, largely due to diet-related metabolic diseases, and similar trends are seen globally. The food and beverage sector in particular, from farms to retail to restaurants to manufacturers to wellness companies, have powerful effects on public health through their products and services. Creation of evidence-based metrics that evaluate the portfolio and strategy of established and new food and beverage-related businesses will provide investors with critical information to support investment decisions and the greater financial success of companies with science-based priorities to improve nutrition and health for their customers and society.
Our Plan: ESG + Nutrition
The Gerald J. and Dorothy R. Friedman School of Nutrition Science and Policy is uniquely positioned to inform and develop novel, science-based ESG metrics focused on food, nutrition, and health: ESG + Nutrition. As a leading graduate school of nutrition globally, the Friedman School generates trusted science, educates future leaders, and produces real-world impact in nutrition science and policy. Faculty expertise spans from cell to society, with an authentic, inclusive, and interdisciplinary approach to science and innovation that includes biomolecular sciences, epidemiology and data science, behavior change and communication, and economics and policy.
Together with leading advisors from corporations, investment firms, and nonprofits, Dean Mozaffarian and other Friedman School researchers are leading an initiative to develop a set of novel ESG metrics focused on food, nutrition, and health. Our goal is to create data-driven metrics that can be integrated into investors’ ESG-related investment frameworks and food-sector businesses’ ESG reporting, resulting in more evidence-based investor decisions aligned with improving the public’s nutrition and health.
Phase I of the project is focused on food and beverage sector metrics. Our work includes:
- Developing and validating a novel metric of product healthfulness, incorporating transparent and uniform scoring principles based on the latest scientific evidence
- Understanding the ESG landscape, including widely used ESG standards and frameworks, and the extent to which customer health and nutrition is measured
- Surveying investors to evaluate their interest in nutrition metrics for ESG investing and understand what further information or tools they would require for integrating these metrics into their investment decision-making
- Testing our ESG + Nutrition metrics on public datasets and private company product portfolios
- Surveying the general public to understand how health and nutrition is prioritized by consumers when buying a food product or viewing a food and beverage company
- Recommending ESG + Nutrition metrics based on the above research
- Collaborating with existing ESG standards developers to find opportunities for integration
- Disseminating our proposed metrics and learnings across the ESG ecosystem
Further directions for our research include: assessing the association of proposed ESG + Nutrition metrics with corporate financial performance and health outcomes; developing an ESG + Nutrition driven index; refining sector-agnostic employee health metrics from a nutrition lens; and assessing how environmental, health, and other social ESG metrics can be better integrated within the food and beverage sector.
The development of new, evidence-based ESG + Nutrition metrics will create a critical opportunity for investors to use sound science to positively improve nutrition and well-being worldwide.
Our growing body of work related to nutrition metrics in ESG investing spans both metric development and persuasive commentary on the need for ESG+Nutrition metrics:
- Food Compass is a nutrient profiling system using expanded characteristics for assessing healthfulness of foods
- The time is ripe for ESG + Nutrition: evidence-based nutrition metrics for Environmental, Social, and Governance (ESG) investing
More details on our novel nutrient profiling system, Food Compass, can be found at our project website
- Dariush Mozaffarian, MD, DrPH, Dean (project primary investigator)
- Danielle Capalino, Registered Dietitian, Investor; Friedman School Advisor
- Emma Coles, Co-Founder, FoodSmart Advisors; Friedman School Advisor
- Sylara Marie Cruz, MNSP candidate
- Cristiana Falcone, Principal Advisor, Media Affairs, World Economic Forum; Friedman School Advisor
- Suzannah Gerber, PhD student
- Bart Houlahan, Co-founder and Co-CEO, B-Lab Global
- Robert Marsh, Chief Information Officer, Just Capital
- Denise Morrison, Former CEO, Campbell’s Soup Co.; Friedman School Advisor
- Sarita Nayyar, Member of the Managing Board, World Economic Forum; Friedman School Advisor
- Meghan O’Hearn, MS, PhD candidate
- Julia Reedy, MS, Researcher
- Gabrielle Rubenstein, CEO and Co-Founder, Manna Tree Partners
- Joon Yun, MD, President, Palo Alto Investors
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