Why would an investor care about AMR?

  13 May 2020

Guest blog by AMR Insights Ambassador Abigail Herron
At Aviva Investors we are always doing what we can to keep at the forefront of identifying emerging issue that are likely to impact on companies’ performance and the society in which they operate. When we spot an issue we will work to understand how an issue impacts on companies and society and engage with them either individually or collaboratively to deliver change. Amongst these issues are antimicrobial resistance (AMR).

Horror stories surrounding new strains of bacteria that prove resistant to antibiotic treatment would not be out place in a Stephen King novel. But it isn’t just health that’s at risk from the spread of drug-resistant ‘superbugs’: dangerously high levels of antimicrobial resistance (AMR) risk wiping $100 trillion off potential global output by 2050. Investors who ignore the threat of AMR to asset valuations do so at their peril.

Excessive use of antibiotics in farming, and the corresponding dangers to human health, creates systemic risks across the food, farming and pharmaceutical industries. These include potential costs of regulatory change and reputational damage. Furthermore, as the momentum for a concerted global effort to address AMR grows, the companies we invest in risk being caught on the wrong side of the debate; putting profitability before the common good.

What action have we taken
Investors have a key role to play in engaging with companies to ensure they have robust policies in place and to encourage best practice.

In 2016, Aviva Investors convened and chaired the first ever investor conference on antibiotic resistance in conjunction with the UK Government’s Antimicrobial Resistance Review team, with Lord Jim O’Neill as a keynote speaker.

During World Antibiotics Awareness Week, we also launched our report Superbugs and Super risks: A Guide for Investors in conjunction with the Alliance to Save our Antibiotics and FAIRR. This briefing sets out the investment risks associated with antibiotic misuse, and key ways in which investors can engage companies to mitigate this risk and drive improvements within the food, farm and pharmaceutical sectors.

Aviva Investors meets individually and collectively with the companies they invest in to discuss their strategy on antibiotic resistance. We encourage our investee companies to establish a comprehensive antibiotics policy that includes clear timelines for phasing out routine, prophylactic use of antibiotics across all livestock, seafood and poultry supply chains.

We were honoured to be the only insurance and investment company invited to present at the Call to Action Conference. We also addressed the first ever investor conference on Wall Street on antibiotic resistance in March 2017

Collaboration
We are proud to be a founding signatory to the Farm Animal Investment Risk & Return (FAIRR) investor initiative which has brought together a coalition of investors managing over US$20 trillion. The coalition is calling for an end to the routine, non-therapeutic use of antibiotics in companies’ supply chains.

Investor Year of Action on AMR
The objective of this initiative is to align the behaviour of investors and the broader financial community to international standards, goals and guidelines, for instance, Sustainable Development Goals, the Political Declaration of the High-Level Meeting of the General Assembly on Antimicrobial Resistance, the United Nations Inter-Agency Coordination Group on Antimicrobial Resistance’s (IACG) final recommendations and the WHO Global Action Plan on Antimicrobial Resistance.

Investors will be encouraged to assess and integrate risks, opportunities and impacts related to antimicrobial resistance (applying an antimicrobial resistance and One Health “lens”) when making investment decisions and engaging with investee companies.

The group announced the Investor Year of Action on AMR at the World Economic Forum Annual Meeting, in Davos this year.

The Investor Year of Action on AMR will be supported by a range of activities including:

  • Events and webinars on AMR
  • Inclusion of AMR as a discussion topic at institutional investor conferences
  • Media articles and op-eds across global markets
  • Research reports
  • Public individual investor commitments on AMR

In summary
The race against the declining efficacy of our antibiotics will be closely run. The challenges facing livestock farmers and supply chain actors are significant. But there are also huge benefits to be reaped. Tackling farm antibiotic overuse could see farming businesses benefit from increased resilience, food and pharmaceutical companies from improved company brand value, and investors from the long-term, sustainable returns generated from a robust and well-functioning system. Most crucially, tackling profligate farm antibiotic use will help to safeguard these vital resources for current and future generations.

Abigail Herron
Global Head of Responsible Investment
Aviva Investors

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