Antimicrobial resistance (AMR) is a serious global threat – the World Health Organization ranks it among the top concerns for public health and development. ESG principles could play a major role.
Without responsible antimicrobial use and research into alternatives, AMR poses a serious threat to human health, food security, and economic stability. Policymakers, businesses, and investors are starting to pay more attention to this issue.
AMR is a complex issue that affects multiple environments and industries. To manage it well, we need to consider how everything – like the environment, people’s health, and the economy – links together.
“
To manage AMR well, we need to consider how everything – like the environment, people’s health, and the economy – links together.
Moana Nottage
The role of ESG: environmental, social and governance
Environmental, social and governance (ESG) looks at how well a company manages threats and opportunities across these three areas. Just like with climate-change risks, using an ESG approach can reduce the risk of AMR.
Analysts look at how well a company or industry understands the risks of AMR and their ability to control and mitigate them.
“There are direct financial implications of not managing AMR as a real business risk,” says Moana Nottage, ESG and Sustainability Analyst at Alphinity Investment Management.
Drivers like misusing or over-prescribing antibiotics in human health and agriculture, not developing new treatments or alternatives, and having weak regulations and surveillance all contribute to the problem of AMR, increasing this systemic risk across all industries.
These drivers reduce the effectiveness of current antimicrobial drugs, make diseases more severe and common, and can even affect the security and stability of food supplies and distribution chains.
Which industries are most at risk?
Ms Nottage highlights pharmaceuticals (both for humans and animals), food production, and food retail as industries with the greatest risks and opportunities – all of which are inherently linked.
“Our food system, for example, is a core part of our society, and a means to potentially transport and transmit disease, so there are hidden risks there,” Ms Nottage says.
“But food producers also have a lot of influence to mitigate those risks: if producers can manage animal welfare better, and use fewer antibiotics or antiparasitics, then resistant disease can be better managed at the source, reducing the persistence of AMR.”
That also has downstream impacts for how food retailers manage their own risks associated with AMR. “If we see antimicrobial-resistant disease in our food supply chains, humans can get sick, so retailers have to manage those risks to avoid reputational damage or disruptions to their supply,” Ms Nottage says.
“
There are direct financial implications of not managing AMR as a real business risk.
Moana Nottage
Pharmaceutical research and development: a challenging market
Pharmaceutical companies involved in human health and agriculture face significant risks due to AMR. However, they also have opportunities to make a difference. By investing in research and developing new alternative medicines, vaccines, and diagnostic tools, they can help combat resistant diseases in both human and agricultural settings.
But it’s a difficult market. Developing new antimicrobial treatments requires a lot of resources and is often “not particularly profitable”, says Ms Nottage. This is especially true with stricter antibiotic regulations limiting their use.
“Regulation limits demand for antimicrobials and increases demand for alternatives and preventative measures,” Ms Nottage says. “It’s going to be very difficult for a large pharmaceutical company if their antimicrobials become ineffective, are impacted by regulation, and aren’t replaced with new solutions.”
Finding the right balance between policy and regulation to promote responsible research and development while addressing the risks of AMR can be tricky. Unjela Kaleem, Principal of Orsus Consulting and an expert in strategic communications, says governments can help by establishing more friendly environments for running clinical trials and regulatory processes.
However, policymakers should also push for “increased transparency from the pharmaceutical industry about their research and development costs” compared to their marketing expenditures, Ms Kaleem says.
Part of that transparency can come from AMR stewardship policies, where companies outline how they’re mitigating AMR threats. Food retailers, for example, might use such policies to push their suppliers towards more responsible farming practices, reducing AMR risk across the whole supply chain.
Ms Nottage says that although such policies are still “reasonably nascent”, investors take them seriously.
“A commitment to manage AMR should be backed up by a strong strategy that’s endorsed by senior management, where the company can provide progress every year or two showing that the strategy is actually being delivered,” Ms Nottage says.
“
AMR is a time bomb waiting to explode. It’s an urgent global health issue which must be tackled at the highest level with collaboration from all sides.
Unjela Kaleem
Raising awareness and understanding where responsibility lies
Due to the complexity of AMR, it’s hard to determine who should be accountable for its broader effects, and insurers might begin factoring the elevated risk into their policies. “We might start to see AMR become a more prominent issue for health insurers who find their costs increase due to the impacts of resistant disease,” Ms Nottage says.
“It’s very difficult to identify causal relationships and determine who should be held liable.”
Ms Kaleem also highlights the urgent need for greater public understanding of AMR. “Without broader awareness, there is no pressure from consumers or investors for companies to act responsibly,” she says.
Ms Kaleem says investors, government bodies and policymakers all need to drive awareness with strong public health campaigns and communication. “AMR is a time bomb waiting to explode,” she warns.
“It’s an urgent global health issue which must be tackled at the highest level with collaboration from all sides.”
Emma Berhold has over a decade of experience across a variety of marketing and communications roles spanning not-for-profits, universities, government departments, learned academies and online marketing agencies.
