Ethos, the Swiss foundation with a large number of pension funds as members, has found that Nestlé’s sustainability report lacks information on child labour and climate change. It is, therefore, recommending shareholders to vote against the company’s sustainability report at its upcoming annual general meeting (AGM) taking place in Lausanne on 18 April.

Ethos has slammed Nestlé for failing to publish in its report – a document that Swiss companies have to submit for a vote by law starting from this year – the results of a number of audits conducted on the issues of human rights and child labour, it said.

The company is also failing to disclose sufficient detail in particular on Scope 3 emissions, and on capital expenditure and measures to take to meet climate goals, it added.

Ethos also regrets that, contrary to the spirit of the law, and as in the case of Novartis, the company considers the vote on the sustainability report consultative rather than binding.

The foundation is instead recommending to vote in support of a resolution put forward by the a coalition of Nestlé’s shareholders, and co-ordinated by ShareAction, to sell healthier products.

The investors supporting the resolution, representing $1.68trn in total assets, and including Legal & General Investment Management (LGIM), Candriam, and La Francaise Asset Management, have warned Nestlé of regulatory, reputational and legal risks, and the impact on public health by marketing less healthy foods.

The coalition of investors considered the new nutrition targets set by Nestlé last year to sell “more nutritious” products by 2030 insufficient.

“We were disappointed that the company had not taken the opportunity to set a specific, measurable and proportional target to increase sales from products that meet healthy thresholds,” said Maria Larsson Ortino, senior global ESG manager at LGIM.

The shareholders have engaged with the company, but the dialogue hit a roadblock.

“We therefore deemed the next appropriate step to co-file this shareholder proposal. We want to press home to the company, and to the food and beverage sector as a whole, the importance we place on nutrition,” Larsson Ortino said.

For Ethos, selling healthier products is in line with the long-term interests of the majority of the company’s stakeholders, and reinforce Nestlé’s social responsibility, it said.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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