Unilever has today committed to overhauling the way it reports on the health of its products after bosses came under fire from a shareholder activist group for lacklustre performance on nutrition.
The FTSE-100 Marmite-maker has said it will set new health benchmarks based on government-endorsed models and will stretch sales targets of its healthier goods, after a $215bn coalition of investors coordinated by activist shareholder group ShareAction called for reform.
Bosses at Unilever previously insisted that 61 per cent of their products, which include Ben & Jerry’s ice cream, Marmite and Hellman’s mayonnaise, were of “High Nutritional Standards”, but an independent investigation found that just 17 per cent of its food and drink products were healthy.
The activist shareholder group ShareAction filed a proposal in January urging bosses to set out more ambitious sales targets for health products and adopt government-endorsed health models.
The proposal was backed by a number of institutional investors in Unilever, including pan-European asset manager Candriam, Dutch asset manager ACTIAM and the UK’s Guy’s & St Thomas’ Foundation.
ShareAction said it welcomed the move but the challenge lay ahead for Unilever.
“The next seven months are crucial for ensuring that this commitment is translated into ambitious long-term goals, with concrete policies to deliver these,” Louisa Hughes, Engagement Manager at ShareAction said.
“We encourage investors to make their expectations known to the company. Whilst our resolution has been withdrawn, we may consider further action next year if we are unsatisfied with the company’s progress”
The commitment from Unilever comes after a torrid two months for beleaguered boss Alan Jope, who has faced backlash after it emerged he had made three blockbuster bids for GLaxoSmithKline’s consumer health division last year.
Jope stepped back from a move to hike his $50bn bid and has since announced an organisational overhaul in a bid to re-energise the firm’s flagging share price.
Shares in Unilever plunged following the news of the GSK bids and have fallen over 11 per cent in the past month alone.