The economic value of improving the food environment

From an ESG finance perspective

Abstract

This paper explores the significance of addressing nutrition-related challenges through the lens of ESG (Environmental, Social, and Governance) finance, highlighting the growing role of institutional investors and capital markets in transforming food environments. Traditionally, nutrition policy has been the domain of public health authorities and international organizations. However, recent developments—such as the Access to Nutrition Initiative (ATNI) and the adoption of the Principles of Responsible Investment—have brought nutrition to the forefront of ESG finance strategies, particularly in the food and beverage industry. Institutional investors, especially “universal owners” such as pension funds and life insurers managing large and diversified portfolios, are increasingly recognizing that long-term financial returns depend on the sustainability of the overall economy. Unhealthy nutrition outcomes—such as obesity, undernutrition, and micronutrient deficiencies—impose significant macroeconomic costs, including reduced productivity, increased healthcare spending, and slower GDP growth. These risks are now considered to be material to long-term financial performance. Global forums, such as the 2025 Paris Nutrition for Growth (N4G) Summit, have emphasized the need for private sector engagement and transparency. ATNI’s investor frameworks encourage companies to disclose sales-weighted nutrition scores, adopt credible Nutrient Profiling Models (NPMs), and integrate nutrition into corporate governance and strategies. In response, global food companies are increasingly being assessed with regard to the nutritional quality of their product portfolios, marketing practices, and affordability strategies. In Japan, ESG investment has grown rapidly, but remains heavily focused on environmental issues, with limited awareness of nutrition as a financial and societal issue. The market structure, which is dominated by small and mid-sized food companies outside of institutional investor reach, places further limits on impact. In this context, regional financial institutions—particularly banks—are seen as key actors in promoting nutrition-sensitive business practices through ESG banking. This paper also highlights Japan’s progress in developing a localized NPM that reflects national dietary patterns and public health priorities. As the global financial community seeks standardization, reconciling local relevance with global comparability remains a central challenge. Overall, the paper argues that improving food environments through ESG finance is not only a public health imperative but also a strategic economic agenda. By integrating nutrition into financial evaluation and corporate dialogue, both financial institutions and policymakers can drive systemic change toward healthier and more sustainable societies.