Antibiotics in Livestock Create Investor Risk
A century ago, the top three causes of death were infectious diseases. Today, they account for a few percent of deaths, thanks to antibiotics.
However, antibiotics are losing effectiveness due to reckless overuse in human medicine and in farm animal production. Meat, restaurant, and fast food companies have dragged their feet in taking action. It is imperative that investors get involved to correct the industry’s course.
In the U.S., antibiotic-resistant infections cause over two million illnesses and 23,000 deaths each year, and the problem is projected to keep getting worse. If no action is taken, antibiotic resistance could cause 300 million premature deaths and up to $100 trillion in global economic damage by 2050.
One of the main causes of resistance is the overuse and misuse of antibiotics in the meat industry. Livestock consume 70 to 80 percent of antibiotics sold in the U.S. These drugs are often used to prevent illness caused by unhealthy conditions on commercial feedlots or to increase the rate at which animals gain weight, rather than to treat illness.
There is an alternative: antibiotics can be reduced by improving sanitation, animal feed, and other best practices. Denmark banned all non-therapeutic antibiotic use in pigs in 1999. The country is a massive exporter of pork, and farmers adapted to the ban without raising prices. Certified organic meat is also raised without antibiotic use — animals are only treated when absolutely necessary, and are then sold without the organic label.
Shareholder advocates have addressed antibiotic resistance for many years, but these efforts greatly increased in 2015. As You Sow joined investors worth $1.4 trillion to call on several companies to prohibit non-therapeutic use of medically important antibiotics. We are currently engaging several companies:
• McDonald’s: As You Sow and other members of ICCR, led by the Congregation of Benedictine Sisters of Boerne, Texas, filed a shareholder resolution with McDonald’s earlier this year. The resolution became the first shareholder vote on antibiotics in several years, supported by more than 26% of McDonald’s shares, or $17.7 billion. The pressure on McDonald’s to become more sustainable has led to the company to ban medically important antibiotics in chicken, a goal it met ahead of schedule. Investors are continuing to press McDonald’s to take similar actions for beef and pork.
• Wendy’s: As You Sow filed and withdrew a shareholder resolution with Wendy’s earlier this year after the company agreed to strengthen its policies. In August 2016, Wendy’s followed through on its commitment, announcing that by 2017 it would source only chicken not treated with medically important antibiotics.
• Burger King: As You Sow filed and withdrew a shareholder resolution with the parent company of Burger King earlier this year. The company agreed to announce a stronger antibiotics policy by the end of 2017.
• Yum! Brands: The parent company of Taco Bell, KFC, and Pizza Hut has been dragging its feet on this issue, despite strong public pressure. As You Sow announced a shareholder resolution in July, which will be voted on by Yum! shareholders next spring.
• Hormel Foods: As You Sow and other members of ICCR, led by the Unitarian Universalist Congregation at Shelter Rock, withdraw a shareholder resolution last year with Hormel after the company committed to stronger action on antibiotics and other sustainability issues. Some of the company’s new policies and programs will be announced in the near future.
• Sanderson Farms: The poultry company produces 7% of the chicken eaten the U.S., and is well-known for being the only major meat company that continues to openly deny the link between antibiotic use and resistance, even using this stance as a focal point in its advertising. Sanderson shareholders will have a chance to demonstrate their concern to the company when the resolution is voted on next spring.
Companies that continue to drag their feet face extraordinary risk. Consumer preferences are rapidly changing to prefer sustainable and safe food choices, even among populations not typically concerned with healthy eating. In a recent survey, 34 percent of customers said they would visit McDonald’s more often if it served meat raised without hormones or antibiotics. And last year, California passed a bill to restrict routine antibiotic use in farm animals.
Transitioning industrial farms to sustainable operations, especially for pork and beef, will require significant short-term investment, but it is necessary to safeguard human health and reduce systemic risk. We applaud corporate leaders, investors, and health advocates for tackling this challenge.