BMO Gam, M&G and Rathbones among £3trn investor group demanding answers on school meals scandal

BMO Gam, M&G Investments and Rathbones are among a £3trn investor group demanding answers on meagre food parcels that have been delivered to financially-struggling families in the UK during the latest coronavirus lockdown.

This week, social media has been flooded with angry posts, which have been picked up by national press, regarding meagre food packages supposed to feed children for up to 10 days. These were sent out by Chartwells, a subsidiary of Compass Group contracted by the UK government to issue food parcels to children who normally obtain free school meals – but have not been able to due to the national lockdown.

UK minister for children Vicky Ford launched an urgent investigation earlier this week and said Chartwells “has rightly apologised and admitted the parcel in question was not good enough”.

Investment manager CCLA has created a coalition of asset owners, managers and finance industry stakeholders with more than £3trn of AUM calling on Compass Group to answer critical questions over the highly criticised food parcels in lieu of free school meals sent out by its subsidiary Chartwells.

CCLA, the UK investment manager for charities and local authorities, has brought together a coalition of investment managers and financial firms, including Legal and General Investment Management, EOS at Federated Hermes, BMO Gam, M&G, Rathbone Brothers, The Church Investors Group and ShareAction – to sign an open letter to Compass Group’s CEO, Dominic Blakemore, expressing concern in response to reports the food packages provided by Chartwells to the most disadvantaged families are falling short of expectations.

What the £3trn investor group is asking of Compass Group

The letter said it welcomes the clarification and apology issued by Chartwells, but seeks further reassurance on the changes that are being implemented so that future food meet the needs of these families.

“As responsible investors and their representatives, we are concerned by the disproportionate impact the disruption posed by Covid-19 has had on the poorest members of our society. All children have the right to access nutritious diets to support healthy development, and we are particularly alarmed about the increase in child hunger during this period,” the letter said.

“Research by the Social Market Foundation identified that more than 1.9 million children went short of food during 2020 and, according to Mars and the Trussell Trust, 30% of UK adults are concerned that they will not be able to provide for themselves or their family.

“We welcome Compass Group’s commitment to responsible business practices. As investors, we were pleased to see the clarifications and apology made by Chartwells following the media coverage of the 12 January.

“However, we would appreciate reassurance as to how the food parcels that you provide meet the needs of the most disadvantaged families in the UK.”

The coalition is asking Compass Group to address the following questions:

– What provision of food items are made in the parcels that you provide and what do you estimate the value of those goods to be?

– Do you conduct analysis on the food boxes that you provide to ensure that pricing is accurate?

– Do you conduct analysis on the content of the food boxes you provide to ensure that they provide a balanced diet in line with national school food standards?

– What plans does the company have to address the concerns raised by the media and ensure that future food boxes are ‘fit for purpose’?

CCLA head of ethical and responsible investment James Corah said the nation has rallied behind campaigns, such as the one led by professional footballer Marcus Rashford, to ensure that no child goes without a nutritious meal.

However, “an insufficient response to this issue could raise questions about Chartwell’s commitment to your stated guiding principles and values and has the potential to cause significant reputational damage to Compass Group.”

In a statement supporting the letter, CCLA chief investment officer James Bevan said: “At times it is necessary to seek answers, not only as investors in the company, but also as members of society. The coronavirus pandemic has been challenging for everyone and particularly for lower-income families. It is incumbent on us all to do our part.

“As responsible investors, we will call upon companies to demonstrate commitment to sustainable business practices that meet the needs of all stakeholders.”

The full list of signatories