Tesco steps up healthy food pledge amid investor pressure

Bloomberg

Tesco Plc has pledged to boost sales of healthier food and drink across its entire retail business in a bid to stave off further pressure from investors over concerns its products cause obesity.
The company aims to include its central European operations and wholesaler Booker Group Ltd in a pledge to increase the share of healthy product sales, Tesco said in a statement. The target builds on a commitment made in March for its UK and Irish stores, which aim for healthy products to comprise 65% of total sales by 2025, up from 58% now.
Tesco’s commitments follow a shareholder resolution in February that called on the UK’s biggest supermarket to cut its exposure to unhealthy products that are high in salt, sugar and fat. Investors have been pressing food suppliers to make changes as the coronavirus pandemic throws a spotlight on obesity and the importance of healthy diets.
Shareholders including Dutch fund Robeco withdrew the February resolution following Tesco’s pledge, according to ShareAction, a UK nonprofit that oversaw the move.
ShareAction said in a statement this was “a landmark win” for activist investors on health issues. “Investors are recognising the importance of health,” said Louisa Hodge, engagement manager at ShareAction, in a separate statement. “They see the risks and opportunities supermarkets face, given their outsized role in shaping our diets.”