Investment professionals have warned that obesity will be one the most serious issues that investors – and society – will face in the coming years.
Sarbjit Nahal, equity strategist at major financial services firm Merrill Lynch, who contributed to a report on thematic investing, said during a conference in South Africa that obesity and wellbeing were part of a megatrend that investors should be keeping their eyes on.
“The obesity epidemic is the most pressing health challenge facing the world today”, he said.
“There is no silver bullet, but companies are coming up with solutions in response to consumer demand and sometimes, government regulation.”
Nahal said that investors were faced with a decision of whether to consider those companies that are changing their products by promoting healthier food and lifestyles, or those that are instead looking at the pharmaceutical, weight management and sport sectors.
Many food giants have been promoting products rich in salt, sugars and fats, knowingly contributing to an increase of obesity among developed countries, he argued.
“The companies that are seen as supporting the obesity epidemic will find themselves facing similar scrutiny as the tobacco industry did”, he added.
“There is a growing awareness that obesity and its ripple effect on diseases like diabetes will cost society – and in particular employers and insurers – more than smoking ever did.”
Some investment management firms have recognised the importance of including healthy eating in sustainability considerations.
In a recent article, Alliance Trust sustainable and responsible investment (SRI) fund manager Neil Brown wrote, “Returning our diets to quality food eaten in sensible portions would provide huge health gains to individuals, reduce the burdens on our healthcare budgets and of course, the real driver for any investor, deliver significant profits for the companies that get us there.”