ESG Is Coming for Your Candy Bars
As climate and equity proposals lose steam, activist investors are targeting junk food, soda, and alcohol in the name of corporate responsibility.
Once a Wall Street buzzword, ESG—Environmental, Social, and Governance—has become a political flashpoint and a corporate headache. Investor enthusiasm for ESG is clearly waning. The Manhattan Institute's Proxy Monitor project has tracked such proposals for years. In 2024, it found that zero environmental or social policy proposals received majority shareholder support at Fortune 250 companies. But that doesn't mean ESG is going away. Instead, it's evolving—and its next battleground could be your favorite candy bar or soda.
After years of climate and racial equity-focused proposals, ESG activists are now shifting their attention to nutrition. The latest campaign appears to be against "unhealthful products." Academics are branding this movement "ESG + Nutrition," arguing that investors should aim to "align financial returns with benefits for society and the planet."
In 2023, Nestlé found itself at the forefront of this new effort when a group of institutional investors demanded the company "rebalance its sales towards healthier products." Similar campaigns have been pushed at Kellogg's, Kraft Heinz, Unilever, and soda giants Pepsi and Coca-Cola.
Proponents of the ESG + Nutrition initiative have floated concepts like a "nutrition metric" to determine the healthfulness of specific food products, as well as a potential system of "nutri-credits" that would operate as "health offsets," similar to carbon credits in the climate change context. These efforts haven't passed shareholder votes, but they've already inflicted costs—up to 75 staff hours and $150,000 per proposal just to get them on the corporate ballot, according to some estimates.
That might seem like a rounding error for billion-dollar brands. But the bigger concern is what these proposals are asking companies to do. Unlike calls for emissions disclosure at a tech firm, demands for Coca-Cola to replace its entire product line with green smoothies or for Mars to ditch the Snickers bar in exchange for ancient grain granola bars are antithetical to these companies' entire business models. If taken seriously, these efforts would effectively require America's most iconic companies to abandon their core products—and, by extension, their customer bases.
As recently covered by Reason's Eric Boehm, the U.S. government's ongoing effort to revise the 2025 Dietary Guidelines is very likely to result in the federal government declaring that there is "no safe level" of alcohol consumption consistent with a healthy lifestyle. Such a declaration in the U.S. would give ESG activists a new wedge to go after beer and liquor companies like Diageo and Molson Coors, demanding they "rebalance" their offerings toward non-alcoholic alternatives. Analysts have already flagged the alcohol industry as facing "rising ESG-related risks."
These agendas are already making their way into U.S. shareholder activism. Already in 2025, YUM! Brands (parent of KFC, Taco Bell, and Pizza Hut) is facing a shareholder proposal that would require compliance with World Health Organization (WHO) guidelines on antimicrobial use in meat production. A WHO-inspired, anti-alcohol proposal won't be far behind.
Yet for all the handwringing and posturing, the market is already doing much of the work ESG activists claim to want. Drinking rates among Gen Z have plummeted, and non-alcoholic beverage sales are booming. Consumers are becoming increasingly enthusiastic about prioritizing healthy eating. In short, the private sector is adapting in real time to shifting preferences, with nary a "health offset" or "nutri-credit" in sight.
