Tesco has agreed to increase sales of healthier food following pressure from investors, making it the latest FTSE 100 company to amend policy in response to the prospect of a shareholder vote.
ShareAction had mobilised seven institutional investors and more than 100 individual shareholders to table a resolution at the company’s annual meeting, the first time the issue of healthy eating had been part of the formal agenda rather than just a question from the floor.
But on Tuesday ShareAction said it would withdraw the resolution after the supermarket group agreed to set out further actions to boost sales of healthy foods at its central European business and in Booker, which supplies independent corner shops.
Tesco had already pledged to increase the share of healthy products in UK and Irish stores, from 58 per cent to 65 per cent of sales by 2025.
Sarah Bradbury, group quality director, said Tesco was “pleased to broaden our public commitments to Booker and our central Europe business” and would “continue to engage with ShareAction and other stakeholders”.
Shareholder proposals are still much rarer in the UK than in countries such as the US, where ShareAction has supported resolutions brought by others against PepsiCo and McDonald’s in recent years.
But groups of investors in Britain have started to use shareholder motions as a means to compel companies to tackle environmental and social issues. Last year, Barclays was forced to table its own climate proposal at its annual meeting after shareholders targeted it with a resolution.
This year, HSBC avoided a revolt at its annual meeting after a coalition of investors — supported by ShareAction — agreed to withdraw their resolution and back the bank’s climate plans.
Simon Rawson, head of corporate engagement at ShareAction, said the group had been in conversation with Tesco about healthy eating targets for some time. “We had done a benchmarking survey and the results of that, combined with the fact that they are leaders in the UK, led us to decide to escalate our engagement with them.”
“There was a step change when the resolution hit the table,” Rawson added.
He said there would be no more resolutions filed this year, given the long timescales involved, “but we are already starting to think about what we should focus on next year”.