ESG Investors Concerned by Anti-Microbial Resistance

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Stockholm (NordSIP) – In an exposé, senior Investment & Pensions Europe (IPE) correspondent Susanna Rust takes a deep dive into increasing investor concern about the overuse of antibiotics and its emergence as an ESG issue.

A report last year by economist Jim O’Neill, the Review on Antimicrobial Resistance, spelled out the consequences of increased antibiotics use, namely anti-microbial resistance (AMR). The problem is that of declining human health and its economic impact. O’Neill’s research suggested that if AMR continues unchecked, it could be responsible for 10 million deaths per year by 2050. The report also values this at $100 trillion in lost global production if no action is taken, making it an investor concern as well.

“Based on conversations we’ve had with investors, they [too] are becoming increasingly concerned about the material risks posed by antibiotic misuse, which is why the PRI is continuing to monitor this issue very closely,” said Fiona Reynolds, managing director of the UN PRI (Principles for Responsible Investment).

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Notwithstanding the benefits of antibiotics in traditional medical procedures, their overuse in e.g. animal farming is a major example of investor interest and concern about antibiotics, Ms Rust reports.

“Investors are concerned that a failure to confront irresponsible antibiotic use poses significant risk to investments,” read a statement from an investor campaign to engage U.S. and UK restaurant chains to end the routine use of antibiotics in food supply chains.

There are also concerns within the pharmaceutical sector, though the effects remain uncertain. AMR is “a key emerging risk for companies and a substantial public health threat [but] at present the issue is not considered to have a material impact,” Julia Giguere, senior healthcare analyst as MSCI ESG, told IPE, adding that MSCI ESG is closely monitoring the risk.

“Engaging with companies and policymakers on the issue of the misuse of antibiotics would seem the right thing for investors to do, although they would have to decide where it ranks in terms of the issues competing for their attention,” wrote Ms Rust.

Read the full exposé here.

Picture (c) Mikael-Damkier—shutterstock

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