Yahoo Finance Unilever urged to make its food healthier in boost for beleaguered boss
Alan Jope has won a rare public vote of confidence in his battle to give Unilever a social purpose after a major investor urged the company to "improve the healthiness" of its food brands.
The beleaguered Unilever chief executive should “take further action and lead the industry” on nutrition and health issues according to Candriam, a French investor which looks after more than €150bn (£125m) of assets.
The comments come after Terry Smith, a Unilever investor and one of the UK’s best-known stock pickers, said earlier this month that the company had “lost the plot”.
He warned that Unilever had become "obsessed" with its public image and attacked management for its "ludicrous" focus on sustainability.
Meanwhile, Unilever has come under pressure to sell its slower growing food brands. Sophie Deleuze, lead analyst at Candriam, said: “We commend Unilever’s strategic commitments and close collaboration on tackling nutrition and health issues. However, despite the company’s efforts, questions remain as to whether its policies are delivering sufficient progress to improve the healthiness of its sales portfolio in the eyes of regulators.
“When a company the size of Unilever takes significant steps forward, it will send ripples through the whole food manufacturing industry, and we believe will deliver meaningful, positive change. It will also ensure the company is better placed to navigate any potential regulatory intervention.”
Candriam, which is owned by US insurance titan New York Life and previously known as Dexia, ranks among Unilever’s smaller institutional investors with a stake worth about £200m.
Candriam lays claim to having pioneered ethical investing and launched its first responsible fund in 1996. It says it has the widest range of ESG (environmental, social and governance) funds in Europe.
Ms Deleuze said that with many countries clamping down on unhealthy eating, it was incumbent on Unilever to proactively reduce sugar, salt and fat in its products.
Its comments shed new light on the pressure Mr Jope is facing behind closed doors from investors.
Mr Jope has pledged to focus Unilever’s attention on “purpose-led” brands and threatened to sell off any that “are not able to stand for something more important than just making your hair shiny, your skin soft, your clothes whiter or your food tastier”.
But Mr Jope’s focus on ESG has been criticised for becoming a distraction at a time when Unilever is struggling with a falling share price.
Just days after Mr Smith’s public attack on Unilever, it emerged that Nelson Peltz's activist hedge fund, Trian Partners, had a stake in the company and could force management to make changes more quickly.
Earlier this week, Unilever announced it was cutting 1,500 management roles worldwide as part of a wide overhaul which will result in the business being split into five divisions, a move experts said could make it easier to pursue a sale of its food or ice cream units.
Unilever was contacted for comment.
