Antimicrobial resistance (AMR) is a risk to human and animal health – and one of the systemic risks that AP7 works to combat through our active ownership tools and collaboration. In 2023, we broadened our active ownership work on AMR, through several concrete actions.
According to the World Health Organization (WHO), AMR is one of the top 10 global public health threats[1] causing more than 1.2 million deaths per year[2] – a number which is expected to increase to 10 million by 2050[3], with an anticipated cost of 1 trillion USD in global economic losses. Overuse and misuse of antibiotics in livestock production is one of the main drivers.[4]
“Covid-19 clearly showed how a global health crisis can have far-reaching financial consequences, in addition to human suffering. The impact of AMR, and not having access to effective antibiotics, will potentially be far more extensive”, says Emma Henningsson, Manager Active Ownership at the Seventh AP Fund.
AMR is often referred to as ‘the silent pandemic’, and has potential to undermine the public health advances of the last decades which we often take for granted. However, in contrast to other systemic risks, such as climate change, the practices which directly contribute to the problem are concentrated in a few sectors such as agriculture, food retail and pharmaceuticals. Another difference is that AMR risk has the potential to be efficiently mitigated within just a few years through well-defined actions, as exemplified by the Swedish strategy. Sweden’s use of antibiotics and levels of antibiotic resistance is among the lowest in Europe[5].
Different solutions will be required to curb antibiotic resistance, maybe most importantly phasing out the excessive usage in livestock farming, as 2/3 of antibiotics are used for this purpose[6].
“Antibiotics should be used to treat sick animals, but unfortunately it is commonplace in the food industry to use antibiotics routinely to promote growth and prevent disease in healthy animals. As investors we can use our influence to advocate for more sustainable approaches and practical actions”, says Emma Henningsson.
AP7 began working with AMR in 2021 when we moderated an investor event to raise awareness about the risks, to promote investor collaboration and to share a good practice case from a Swedish food retailer.
A positive development is the emergence of shareholder resolutions addressing AMR.
“In 2023, investors filed shareholder resolutions at Hormel Foods’, Tyson Foods’ and McDonald’s general meetings, asking the companies to comply with WHO’s guidelines on the use of medically important antimicrobials in food-producing animals throughout their supply chains”, says Emma Henningsson.
AP7 supported the resolutions and used them as a starting point for dialogue with some of our key partner organisations.
“We have initiated discussions with our asset manager partners to learn more about their views on AMR risk. Whilst the majority of our managers voted in support of the above-mentioned resolutions, some had opposed it. By discussing the resolutions with our external managers, we remind them of the importance of this systemic risk to universal owners such as AP7. We also gain greater understanding of the rationale behind voting decisions, which can be useful in future active ownership activities”, says Emma Henningsson.
AP7 also convened a dialogue between like-minded investors and a proxy voting research advisor to better understand how AMR risk is reflected in their ESG research and in their proxy voting recommendations provided to their clients.
Collaborating with other investors is key to increase impact. AP7 supports several initiatives coordinated by FAIRR, aiming to drive responsible use of antibiotics in the livestock farming through engagement with pharmaceutical companies and food retailers. We are also addressing the topic in a collaboration of academics and investors as part of the Cambridge Universal Ownership Initiative and will be further developing this work in the coming year.
These activities are part of AP7’s ‘Universal Ownership’ thematic work which runs between 2021 and 2024.
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[1] https://cdn.who.int/media/docs/default-source/antimicrobial-resistance/amr-factsheet.pdf
[2] https://www.who.int/news-room/fact-sheets/detail/antimicrobial-resistance
[3] https://www.who.int/news/item/29-04-2019-new-report-calls-for-urgent-action-to-avert-antimicrobial-resistance-crisis
[4] https://www.who.int/news-room/fact-sheets/detail/antimicrobial-resistance
[5] https://www.folkhalsomyndigheten.se/the-public-health-agency-of-sweden/communicable-disease-control/antibiotics-and-antimicrobial-resistance/swedish-one-health-work-against-amr/ https://www.folkhalsomyndigheten.se/smittskydd-beredskap/antibiotika-och-antibiotikaresistens/
[6] https://www.saveourantibiotics.org/the-issue/antibiotic-overuse-in-livestock-farming/