This week, two of Europe’s largest asset managers will try to increase pressure on McDonald’s to reduce the use of antibiotics in its food supply chain and highlight what they say is the impact of antibiotic resistance on shareholder returns and the wider economy. risks of.
Legal & General Investment Management and Amundi, among others, backed a resolution at the fast-food chain’s annual meeting on Thursday that calls on the U.S. group to “develop a policy that would allow companies to comply with World Health Organization guidelines for the use of medical devices important in food animals.” antibacterial agent”.
The resolution, put forward by nonprofit advocacy group Shareholder Commons, reflects growing concern among some investors about the systemic impact of antimicrobial resistance (AMR) and the broader economic threat.
AMR has long been viewed as a threat to global health and development, believed to be responsible for millions of deaths worldwide each year. Inappropriate and overuse of antimicrobials can reduce the effectiveness of medicines that are critical to controlling a range of diseases that were often fatal in the pre-antibiotic era.
The WHO guidelines recommend “a comprehensive reduction in the use of all classes of medically important antimicrobials in food-producing animals”.
McDonald’s has urged shareholders to reject the latest resolution, saying it has a “strong record of responsible use of antibiotics” throughout its supply chain.
Maria Ortino, LGIM’s global ESG manager, said McDonald’s had fallen short of a previous pledge to release an antibiotic reduction target covering all beef sold in its restaurants by 2020. It then issued a more limited goal of “responsible use of medically important antibiotics”, she said.
AMR threatens “devastating human and economic consequences,” Ortino said. About 70 percent of antibiotics are consumed by animals, she said, noting that McDonald’s is “the world’s largest purchaser of beef.”
Antibiotics originally designed only for animals are increasingly being used as a “last resort” treatment in humans, she said, underscoring the risks to the global population if antibiotics become ineffective due to overuse.
But the resolution faces big odds. Last year, a similar shareholder proposal failed to win the support of two of McDonald’s shareholders, Vanguard and BlackRock. Both Amundi and LGIM supported last year’s resolution.
Two of the largest shareholder advisory firms – ISS and Glass Lewis – also advised against it. “(McDonald’s) appears to be in compliance with regulatory requirements regarding the use of antibiotics,” the ISS said. “There is no need for shareholder support at this time.”
McDonald’s highlighted to investors its “current policies and practices for the responsible use of antibiotics, our focus on helping drive continuous improvement among our suppliers and the industry, and our work to improve data and transparency on antibiotic use.”
It added that adopting the policies outlined in the resolution would be “unnecessary, duplicative and would not provide meaningful benefit to shareholders”.
Activists, however, have continued to advance their case. Caroline Le Meaux, head of ESG research, engagement and voting policy at Amundi, said antimicrobial resistance was a “significant consideration” for food companies and wider society.
“Antibiotic resistance will have a significant cost to society and will result in a large number of deaths,” she said.
Le Meaux pointing to a 2016 Report In a worst-case scenario, where antibiotics and other antimicrobials no longer treat infections the way they should, annual global gross domestic product could drop by 3.8%, the World Bank predicts.
She added that individual food companies face the threat of more regulation, fines and even prosecution for animals consuming antibiotics in their supply chains. “At some point, the government is going to step up regulation of this, and if companies don’t anticipate that, they’re going to pay a pretty high price,” she said.
Additional reporting by Andrew Edgecliffe-Johnson in New York