How Covid-19 Has Turned the Spotlight Back on Obesity

The coronavirus highlighted the risks created by another escalating health emergency: obesity. The prevalence of obesity has almost tripled in the past four decades and is still rising. Obese people have a higher risk of suffering complications or dying from -19, while also being vulnerable to diabetes, heart disease, stroke and cancer. The United Nations warned in 2020 that obesity is a “global in its own right.” Tougher rules have forced more disclosure on food labels. Now money managers concerned about the social impact of their investments are putting pressure on food companies to take action.

1. What links obesity and ?

Being obese, which generally means having a body mass index of 30 or more, decreases lung capacity and is linked to impaired immune function. Obese people diagnosed with Covid-19 were more than twice as likely to be hospitalized, 74% more likely to need an intensive care unit and 48% more likely to die, according to a study from the University of North Carolina at Chapel Hill. Research has also linked obesity to lower responses to numerous vaccines. Meanwhile a U.K. survey found twice as many people put on weight as lost it during the initial pandemic lockdown in early 2020.

2. How prevalent is obesity?

39% of adults, or more than 1.9 billion people, were overweight in 2016 and of these more than 650 million were obese, according to the World Health Organization. Bulging waistlines are driven partly by economic success — wealthy populations eat more. But the poor in well-off countries tend to have higher obesity rates than the rich, and obesity is rising in developing nations too. Countries as varied as Indonesia and Brazil have communities that are both poorly nourished and overweight.

3. What causes it?

The reasons are complex: Diet, genetics, lack of exercise and social environment all play a role. Fast-food restaurant meals, ultraprocessed foods and soft drinks are among the culprits. Industrially processed convenience food — usually loaded with salt, fat, sugar and additives — makes up more than half of consumed calories in the U.S. and U.K., where it’s often cheaper than fresh food. Globally, more than 3 billion people can’t afford healthy and nutritious diets, according to the UN.

181,490 in U.S.Most cases today

+8% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-0.​8788 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

4% Global GDP Tracker (annualized), Oct.


4. How big is the cost?

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Obese people tend to lead shorter, less healthy lives. Treating overweight-related conditions is projected to cost G-20 nations on average 8.7% of their health budgets over the next three decades. Overweight children are more likely to miss school and less likely to complete higher education. One study found that cutting calories by 20% in energy-dense food such as potato chips and candy across 42 countries could avert more than 1 million cases of chronic disease per year. If unhealthy eating and obesity aren’t tackled, related health costs will exceed $1.3 trillion a year in the next decade, the UN estimates.

5. How have authorities responded?

Over the last decade, government officials alarmed by the trend have taken action, mainly with targeted taxes and new food-labeling regulations. While some steps have been controversial — and criticized as unwarranted state interference or revenue-raising exercises — research shows they have had an effect. Before the pandemic, taxes on sugary drinks were introduced in countries from Mexico to the Philippines. San Francisco and Seattle were among eight U.S. cities that passed so-called soda taxes, with most about 1 cent an ounce. Another was Philadelphia, following a campaign there backed by Michael Bloomberg, the majority owner of Bloomberg LP, the parent of Bloomberg News. Now other countries are ratcheting up the pressure. The U.K. is moving to curb junk-food advertising and force cafes and restaurants to slap calorie labels on their menus.

6. How are investors getting involved?

Some fund managers are reviewing their shareholdings, pressing food companies to disclose more information and screening medical literature as part of a trend in investing with environmental, social or governance goals in mind. At least 55 institutional investors with a combined $7.7 trillion in assets have signed up to the Access to Nutrition Initiative’s push for manufacturers to take a range of actions, such as linking management pay to food-quality targets and making healthy products more accessible. By late 2020 they included Aviva and Storebrand. Stephane Soussan, a portfolio manager at CPR Asset Management in Paris, said the backlash could resemble the fossil fuel divestment movement.

7. How has the industry responded?

Manufacturers are reformulating products, but there’s a long way to go. Coca-Cola Co. was criticized by health experts when it was revealed in 2015 that it was funding research to emphasize exercise, rather than calorie cutting, as the key to weight loss. One reason companies are hesitant is that tinkering could ruin the taste of a brand. Some are simply packaging their goods in smaller quantities.

The Reference Shelf

  • A Bloomberg article on weight gain being the flip side of the Covid food crisis for richer nations.
  • A New York Times article on the outlook for rising obesity.
  • A Bloomberg story on how Covid-19 raises an existential question for a $3 trillion industry.

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