The Green Directory - Australia's Green Business Directory

The causes and impacts of obesity have been the subject of daily discussion in the Australian media for the majority of 2006. The community is placing increased pressure on businesses to alter their practices and on governments to increase regulation to address Australia’s growing obesity problem.

Lobby groups pushing for more responsible business practices, such as the Parents Jury, are gaining mainstream media coverage and support. The Parents Jury’s TV Food Advertising Awards, with categories such as ‘most misleading advertisement’ and ‘most manipulative advertisement’, intensify the focus on the advertising strategies of food companies in Australia. This group has also been central in the call for a review of the promotion of snack foods to children in supermarkets.

The business risk of obesity to those producing, packaging and marketing food is also increasing as Australian governments debate regulatory options to address the problem. Potential strategies for addressing obesity, such as the traffic light labelling system and the mandatory removal of unhealthy foods from schools pose problems for companies involved in producing unhealthy foods, in addition to the reputation risk of being associated with making children fat.

Whereas some food producers and retailers overseas are implementing measures to protect them from obesity risk, Australian companies have not been quick to respond to the increased focus on this issue. The lack of response by Australian companies leaves investors in the food and beverage sector in Australia completely exposed to business risks arising from calls to curb obesity in Australian society.

The Australian Ethical Charter directs investments away from companies that may be exposed to obesity risk and towards food producers, distributors and retailers offering products that are healthy for consumers as well as for the environment.

The charter advocates avoiding investment in companies which produce or market goods that have a harmful effect on humans or companies which advertise products in a misleading manner. The charter, instead, directs investment toward companies that contribute to human happiness and those using sustainable methods of food production.  Avoiding investment in goods which are harmful to humans means avoiding those that produce highly processed foods offering little nutritional value. By avoiding companies engaged in deceitful marketing practices, Australian Ethical also avoids companies that advocate calorie-intensive foods with little nutritional value as ‘healthy’ options.

By pursuing food companies that contribute to human happiness and sustainable food production, Australian Ethical focuses on organic producers, distributors, retailers and locally based ventures. The approach to the food and beverage sector advocated by the charter also insulates against business risks associated with intensive agriculture, such as losses in soil fertility.

Australian Ethical’s current investments in the food and beverage sector include Whole Foods Markets Inc, an organic retailer based in the United States; United Natural Foods Inc, a distributor of organic and natural foods also based in the United States; Candelo Bulk Wholefoods, a retailer of bulk organic and natural foods on the New South Wales South Coast; and Tallawarra Valley, a biodynamic farm in Western Australia.

For further information regarding obesity, business risk and the response of European companies, Ethical Investment Research Services (EIRIS) has conducted a comprehensive review of issues and responses. This is available from their website at http://www.eiris.org.