Launching a Guardrail on Antimicrobial Resistance

The global economy faces a US$100 trillion headwind over the next three decades from overuse of antimicrobials. TSC is working with institutional investors to implement a Guardrail campaign focused on overuse and abuse of antimicrobials in meat supply chains. The campaign addresses the reality that antimicrobials overuse can increase margins and cash flows at individual companies while externalizing costs that threaten the returns of investors’ diversified portfolios.

The current growth trajectory of antimicrobial resistance (AMR) threatens the global economy with losses that will burden investment portfolios over the next 30 years and beyond. Protecting investment portfolios from rising AMR will require companies to reduce antimicrobials use in food animals significantly. Yet many companies can increase their own enterprise value by exceeding optimal use in animals. AMR thus represents a quintessential example of the need for a system stewardship lens, which recognizes that an individual company’s interest in maximizing its own long-term enterprise value will often diverge from its diversified owners’ interest in optimizing public health, the economy, and their long-term portfolio returns.

Shareholder activism around AMR has yet to significantly embrace this uncomfortable reality, understandably preferring to focus on instances where companies can find “win-win” antimicrobial use-reduction and -optimization opportunities that do not threaten long-term cash flows at individual companies. This reluctance to fully acknowledge the existence of trade-offs between enterprise value and portfolio value results in compromise solutions where companies limit antimicrobial consumption only to the extent that doing so does not sacrifice their own margins. This limited opportunity set has not moved the economy to a sustainable antimicrobial budget so as to preserve diversified portfolios’ value over time.

To address this problem, we’re working with our investor partners to set Guardrails on antimicrobial use that will allow companies to pursue enterprise value within more sustainable parameters.

Our case study—“Antimicrobial Resistance & the Engagement Gap: Why Investors Must Do More than Move the Needle, and How They Can”—describes the research establishing the relationship between antimicrobial use and long-term returns of diversified portfolios and shows how diversified investors can improve their returns by prioritizing the public health system over individual company enterprise value when addressing companies’ use of antimicrobials. The World Health Organization Guidelines on Use of Medically Important Antimicrobials in Food-Producing Animals (the “WHO Guidelines”) fulfill the criteria for a Guardrail and provide the starting point for our campaign. In addition to requesting that companies comply with the WHO Guidelines, we are also asking companies not to engage in lobbying or political influence activities that discourage regulatory solutions to AMR.




  1. Vote: in favor of proposals to follow WHO Guidelines; Against designated directors at companies that fail to follow WHO Guidelines.
  2. Publicly declare support for AMR Guardrail as outlined above for the express purpose of preserving diversified portfolio value.
  3. If in communication with target companies, reinforce expectation that they comply with AMR Guardrail and indicate support for shareholder proposals/no-votes at non-complying companies. Explain that your concern involves the impact of antimicrobial use on your entire portfolio.
  4. Co-file proposals at target companies.
  5. For asset owners, be an active client:
  6. Engage with asset managers to push for support on AMR voting initiatives and an AMR Guardrail (as an institutional policy, rather than as a carve-out just for the one asset owner).
  7. Write asset-management mandates to require managers to practice system stewardship: model language can be found here.
  8. For asset managers, explain the system-stewardship value proposition to clients: the Cambridge Principles frame this concept concisely.
  9. Engage with proxy advisors about the need for proxy voting advice that supports the value of a client’s entire portfolio.
  10. Update investment beliefs and proxy voting guidelines to give staff and advisors the direction they need to act on systemic issues, and ensure trustees have accounted for the full effect of their stewardship choices: model language can be found here.