Our view
Jan 07 - UK: Norwich Union's SRI team asks - can obesity epidemic help investors pile on the pounds?
The team that manages Norwich Union’s
Sustainable Future funds is looking at the risks and opportunities
the world’s obesity epidemic poses investors.
As experts claim that the number of overweight people in the world
overtakes the number of malnourished for the first time*, analysts
believe the problem has serious implications for companies in the
food production and retailing, healthcare, and leisure
sectors.
Key facts:
-
Obesity has reached epidemic proportions globally. There are more than one billion overweight adults in the world – 300 million of them are obese**
-
Obesity rates have risen three-fold or more since 1980 in some areas of North America, United Kingdom, Eastern Europe, Middle East, Australasia and China**
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Childhood obesity is epidemic in some areas. An estimated 17.6 million children under five are estimated to be overweight worldwide**
-
The Health Select Committee has estimated that the costs of obesity are Ł3.3-Ł3.7 billion a year***.
Peter Michaelis, manager of the Norwich Union UK ethical fund
and Norwich Union sustainable future UK growth fund, said:
“Obesity is a key theme for Norwich Union’s Sustainable
Future funds; we see this as an investment issue because it can
affect companies’ long-term profitability.
“We think that rising trends in obesity pose both a risk and
opportunity for companies, and it is important to understand to
what extent companies are exposed to this issue and how they are
managing it.
“Our view, for example, is that those food companies and
retailers that produce high quality food and healthy lifestyle
ranges will enjoy an increase in demand for their products; those
companies that produce poor quality food with high sugar, salt and
fat content risk losing market share as consumers switch to
healthier options.
“Healthcare companies that produce treatments for
obesity-related illnesses such as diabetes, strokes, heart disease
and joint replacements are also likely to see an increase in
demand.”
-ends-
Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
Notes to editors:
About Obesity
*Prof Barry Popkin,
University of North Carolina, of International Association of
Agricultural Economists, Brisbane 2006.
**World Health Organisiation - Global strategy on diet, physical
activity and health.
***Department of Health.
The World Health Organisation (WHO) says:
- Obesity and being overweight increase the likelihood of people
suffering serious chronic illnesses including type two diabetes,
cardiovascular disease, stroke, hypertension and some types of
cancer
- Obesity accounts for 2-6% of total health care costs in several developed countries; some estimates put the figure as high as 7%.
The Department of Health says:
- The prevalence of obesity in children under age 11 increased from 11% in 1995 to 13.7% in 2003.
About Norwich Union’s socially
responsible investment funds
Norwich Union has six
socially responsible investment funds. The investment management
team is based at Morley Fund Management and is one of the largest
and most experienced in the UK. The team is lead by Dr Peter
Michaelis.
About Norwich Union
Norwich Union is the
UK’s largest insurer. It is a leading provider of life,
pensions and investment products and one of the largest financial
adviser (FA) providers. FAs provide over 70% of the company's
long-term savings business in the UK.
Norwich Union is the UK’s largest general insurer with a
market share of around 14%, with a focus on insurance for
individuals and small businesses.
Norwich Union’s news releases and a selection of images are
available from Aviva's internet press centre at
www.aviva.com/media
About Morley Fund Management
Morley Fund Management
Limited is the UK-based asset management business of Aviva plc.
Firms within the Morley group of companies manage Ł156 billion from
offices around the world as at 28 February 2006.
Morley manages both institutional and retail funds under the Morley
brand. It also acts as investment manager for a range of retail
investment funds, marketed in the UK under the Norwich Union brand,
and international funds marketed under the Aviva Funds brand.
Further information about Morley Fund Management can be found at
www.morleyfm.com