A coalition of 71 investors with more than $2trn under management is calling on global restaurant and fast-food giants to reduce the use of meat products from animals fed with antibiotics.
The group which includes the Strathclyde Pension Fund, Aviva Investors, Aegon Asset Management, Natixis Asset Management and Coller Capital, has published a report highlighting the link between the use of antibiotics in livestock and poultry and the rise of antibiotic resistant bacteria in humans – as well as the risk this poses to financial returns.
In March last year the group engaged with 10 large restaurant and fast-food companies, including McDonald’s and Yum! Brands – owner of KFC and Pizza Hut – to end the overuse of antibiotics in animals by meat producers. This came after the World Health Organisation (WHO) described the rise of antibiotic resistance as “one of the biggest threats to global health today”.
The group was brought together by campaign groups Farm Animal Investment Risk and Return (FAIRR) and Share Action. Its report found 70% of companies have adopted either a comprehensive or partial policy to ban the use of antibiotics in poultry, but none had addressed use in other livestock such as pigs or cattle.
The report, The restaurant sector and antibiotic risk, highlights a Cambridge University-backed study showing some strains of E. coli can spread from livestock to humans via food consumption.
It said institutional investors have a significant role to play as company stewards to help drive up standards on antibiotic use through the food supply chain. “Doing so will not only mitigate financial risk, but will contribute to long-term market stability,” it added.
FAIRR Initiative founder and Coller Capital chief investment officer Jeremy Coller said investors are not immune to antibiotic resistance and shareholders are well aware of its impact.
“It’s hard to put a monetary cost on antibiotics becoming useless, but some estimate it could lose $100trn from global economic output, creating an enormous global financial and public health crisis,” he said. “New regulation, shifting consumer preferences and trade restrictions are already driving a reduction in antibiotic use in livestock. The clear message to these companies is that their shareholders want to see meaningful action on antibiotics.”
Strathclyde Pension Fund investment manager Richard Keery said antibiotic resistance is gaining traction as an important investment risk factor.
He added: “The pension funds and asset managers in the investor coalition will be watching closely to see what further reductions in antibiotic use can be made in this sector and beyond.”
Aegon Asset Management engagement manager Natalie Benisch told portfolio institutional the antibiotic resistance issue shares a lot of characteristics with climate change which has been widely accepted as being a definitive investment risk. However, she said there was currently no coordinated policy framework to address the harm caused by antibiotics in the food supply chain.
She added: “[Antibiotic resistance] is a massive public health risk that has come in like a tidal wave. People know it is there and it is coming, but you cannot really define when and where it is going to have the most impact.
“A major health issue like a strain of an antibiotic resistant drug can affect anybody regardless of their country, their financial status and so forth.”
