Norwich Union's SRI team asks - can obesity epidemic help investors pile on the pounds?

Article date: 3 January 2007

The team that manages Norwich Union’sSustainable Future funds is looking at the risks and opportunitiesthe world’s obesity epidemic poses investors.

As experts claim that the number of overweight people in the worldovertakes the number of malnourished for the first time*, analystsbelieve the problem has serious implications for companies in thefood production and retailing, healthcare, and leisuresectors.

Key facts:

  • Obesity has reached epidemic proportions globally. There aremore than one billion overweight adults in the world – 300million of them are obese**
  • Obesity rates have risen three-fold or more since 1980 in someareas of North America, United Kingdom, Eastern Europe, MiddleEast, Australasia and China**
  • Childhood obesity is epidemic in some areas. An estimated 17.6million children under five are estimated to be overweightworldwide**
  • The Health Select Committee has estimated that the costs ofobesity are £3.3-£3.7 billion a year***.

Peter Michaelis, manager of the Norwich Union UK ethical fundand Norwich Union sustainable future UK growth fund, said:“Obesity is a key theme for Norwich Union’s SustainableFuture funds; we see this as an investment issue because it canaffect companies’ long-term profitability.

“We think that rising trends in obesity pose both a risk andopportunity for companies, and it is important to understand towhat extent companies are exposed to this issue and how they aremanaging it.

“Our view, for example, is that those food companies andretailers that produce high quality food and healthy lifestyleranges will enjoy an increase in demand for their products; thosecompanies that produce poor quality food with high sugar, salt andfat content risk losing market share as consumers switch tohealthier options.

“Healthcare companies that produce treatments forobesity-related illnesses such as diabetes, strokes, heart diseaseand joint replacements are also likely to see an increase indemand.”

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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 ofAgricultural Economists, Brisbane 2006.

**World Health Organisiation - Global strategy on diet, physicalactivity and health.

***Department of Health.

The World Health Organisation (WHO) says:

  • Obesity and being overweight increase the likelihood of peoplesuffering serious chronic illnesses including type two diabetes,cardiovascular disease, stroke, hypertension and some types ofcancer
  • Obesity accounts for 2-6% of total health care costs inseveral developed countries; some estimates put the figure as highas 7%.

The Department of Health says:

  • The prevalence of obesity in children under age 11 increasedfrom 11% in 1995 to 13.7% in 2003.

About Norwich Union’s sociallyresponsible investment funds
Norwich Union has sixsocially responsible investment funds. The investment managementteam is based at Morley Fund Management and is one of the largestand most experienced in the UK. The team is lead by Dr PeterMichaelis.

About Norwich Union
Norwich Union is theUK’s largest insurer. It is a leading provider of life,pensions and investment products and one of the largest financialadviser (FA) providers. FAs provide over 70% of the company'slong-term savings business in the UK.

Norwich Union is the UK’s largest general insurer with amarket share of around 14%, with a focus on insurance forindividuals and small businesses.

Norwich Union’s news releases and a selection of images areavailable from Aviva's internet press centre atwww.aviva.com/media

About Morley Fund Management
Morley Fund ManagementLimited is the UK-based asset management business of Aviva plc.Firms within the Morley group of companies manage £156 billion fromoffices around the world as at 28 February 2006.

Morley manages both institutional and retail funds under the Morleybrand. It also acts as investment manager for a range of retailinvestment 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 atwww.morleyfm.com

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