07 Jan 2021 5 min read

Anti-microbial resistance: why should investors care?

By Maria Larsson Ortino , Clinton Adas

We believe that, without coordinated action today, AMR may be the next global health event and the financial impact could be significant.



Anti-microbial resistance, or AMR, is a simple evolutionary process by which microbes develop resistance to the medicines developed to fight them. This naturally occurs as bacteria, viruses, fungi and parasites mutate over time and begin to cease responding to the medicines in question. One of the consequences of AMR is that it makes even simple infections more difficult to treat and increases the risk of severe illness, death and the further spread of diseases. The World Health Organization (WHO) has named AMR one of the top 10 global public health threats facing humanity.

But let’s take a step back and get the terms straight before discussing them further. A micro-organism is a living thing that can only be seen via a microscope (e.g. bacteria). Bacteria are also known as microbes, as are protozoa, viruses, fungi and parasites. A pathogen is a micro-organism, such as bacteria, which has the potential to cause disease (not all bacteria are pathogens; on the contrary, most are not). Anti-microbials are medicines that have been developed to prevent and treat infections caused by pathogens in humans, animals and plants. Anti-microbials most notably include antibiotics but anti-virals, anti-fungals and anti-parasitics are also anti-microbials.

The incorrect use of anti-microbials accelerates the evolutionary process of AMR. An example is when anti-microbials are employed as prophylactics, e.g. administered to a human patient pre-emptively prior to an operation even if there’s no sign of an infection. The more common anti-microbial prophylactic use takes place within animal husbandry where it is preventively employed to ensure that animals do not get sick, or if one infected animal has been identified, all the animals on the farm are provided with an antibiotic. A further (mis)use of anti-microbials is for animal growth promotion, where an antibiotic is administrated purely to promote the growth of the animal for financial gain, and not to treat a disease.

AMR is an increasingly material issue for investors. It is possibly the next pandemic already underway.[1] To be blunt, unless coordinated action is taken today, we believe AMR will be the next global health event, with the financial impact likely to be significant.[2]

The impact of AMR – people, planet, and profit

The impact of AMR on global growth, our environment and on the global mortality rate, in our view, could be severe if it goes unchecked. For example:

Profit: The World Bank estimates that AMR could result in a 3.8% loss in global GDP, an impact comparable to that of the 2008 financial crisis.[3] It further estimates that global output losses could amount to more than $1 trillion after 2030 and up to $2 trillion by 2050.[4] In an AMR worst-case scenario, additional healthcare expenditures could amount to $1.2 trillion globally on an annual basis.[5]

Not taking action could cost investors dearly, as demonstrated by the current pandemic. According to the United Nations, the global economy is expected to contract by 4.3% in 2020 due to the impact of COVID-19.[6] AMR is an already-known health risk as well as a material business risk. We believe that the next pandemic could very well be caused by a drug-resistant pathogen. We need to engage on the issue now, not tomorrow.

Planet: Anti-microbial use also impacts the environment, and its heavy use in animal husbandry often leads to the anti-microbial being discharged into the environment via animal waste, which impacts micro-organisms and further increases AMR. In addition, during pharmaceutical manufacturing anti-microbials can be released into the environment in factory wastewater. This can contribute to the development of AMR when bacteria naturally present in water and soil are exposed to antibacterial ingredients that can trigger the emergence and/or selection of resistance genes[7] which consequently may increase AMR. 

People: Since at least 2014, it is estimated that 700,000 people globally have died each year due to AMR[8], and that this figure will rise to 10 million people on an annual basis by 2050 if no action is taken.[9] To put these figures into context, in the current pandemic, there were 1.6 million deaths[10] from COVID-19 in 2020. Furthermore, the WHO estimates that approximately 2.4 million people could die in high-income countries between 2015 and 2050 without a sustained effort to contain AMR.[11]

What initiatives are we taking to stem AMR?

At LGIM, we are looking at how we can engage most effectively with our investee holdings in the pharmaceutical and animal husbandry industries to promote a ‘One Health’ approach.[12] We will also work collaboratively with our peers and encourage other investors to take action on AMR within their investee holdings. Where appropriate we will engage with policymakers too.

We will continue to write on AMR initiatives throughout 2021. In our next blog, we will discuss further the actions we’re taking.



[1] Anti-microbial Resistance Benchmark 2021, Methodology report 2020, Access to Medicine Foundation, October 2020, p. 5. See also:  http://www.fao.org/news/story/en/item/1330872/icode/; https://www.weforum.org/agenda/2020/11/amr-antibiotic-resistance-global-risk-death/ 

[2] Final Report, Drug Resistant Infections. A threat to Our Economic Future, March 2017, World Bank, pp 18-19, 22

[3] Final Report, Drug Resistant Infections. A threat to Our Economic Future, March 2017, World Bank, p. 17

[4] Final Report, Drug Resistant Infections. A threat to Our Economic Future, March 2017, World Bank, pp 18-19

[5] Final Report, Drug Resistant Infections. A threat to Our Economic Future, March 2017, World Bank, p 22. Similarly, the EMA estimates that the costs for AMR within the EU in healthcare expenditures and productivity losses currently amount to approximately €1.5 billion on an annual basis. Last accessed 13 Dec 2020:  https://www.ema.europa.eu/en/human-regulatory/overview/public-health-threats/anti-microbial-resistance

[6] Impact of the COVID-10 Pandemic on Trade and Development, Transitioning to a New Normal, United Nations Conference on Trade and Development (UNCTAD), November 2020, p 8

[7] Anti-microbial Resistance Benchmark 2021, Methodology Report, Access to Medicine Foundation, October 2020, p. 25

[8] Interagency Coordination Group on Anti-microbial Resistance, Report to Secretary General of the United Nations, April 2019, p 1. This figure was already estimated in 2014 by Jim O’Neill, Tackling Drug-Resistant Infections Globally: Final Report and Recommendations, May 2016 p 1

[9] Interagency Coordination Group on Anti-microbial Resistance, Report to Secretary General of the United Nations, April 2019, p 1. Further, the European Medicines Agency (EMA) estimates that infections caused by multidrug-resistant bacteria cause around 25,000 deaths in the EU every year. Last accessed 13 Dec 2020:  https://www.ema.europa.eu/en/human-regulatory/overview/public-health-threats/anti-microbial-resistance And the US Centers for Disease Control and Prevention (CDC) estimates that each year at least 2.8 million people in the US get an antibiotic-resistant infection, and that more than 35,000 die of AMR. Last accessed 13 Dec 2020: https://www.cdc.gov/drugresistance/index.html

[10] 1,614,159 according to John Hopkins University of Medicine, Coronavirus Resource Center, last accessed on 14 Dec 2020: https://coronavirus.jhu.edu/.

[11] Interagency Coordination Group on Anti-microbial Resistance, Report to Secretary General of the United Nations, April 2019, p 1.

[12]  The ‘One Health’ approach promoted by the WHO brings together various stakeholders working in multiple fields such as human and animal health, food production, environment etc. to work together in the designing and implementing of research programmes, policies and legislation to attain better public health outcomes.

Maria Larsson Ortino

Global ESG Manager

Maria leads the Stewardship team’s efforts on health as well as being responsible for global engagement and voting activities for holdings within the pharmaceutical, biotech, healthcare, chemicals and tobacco sectors. Prior to joining LGIM in 2019, Maria was a member of the ESG teams at Newton Investment Management and State Street Global Advisors. She has also headed up the research team at a start-up corporate governance data company, served as an analyst within the IVIS team, part of the Investment Association, UK. She started her ESG career at PIRC, a proxy adviser, in 2007. Maria has an LLB from Queen Mary College, University of London and a Master’s Degree from the Graduate Institute of International Studies, University of Geneva, Switzerland.

Maria Larsson Ortino

Clinton Adas

Global ESG Product Specialist

Clinton joined the team in 2019. He predominantly focuses on client-related activity, but also contributes to broader investment stewardship initiatives. Clinton joined LGIM from Capital Group where he spent six years managing the Investment Information function for Europe and Asia, which covered equity, fixed income and multi-asset products. He holds a BA from Stellenbosch University, an LLB from University College London, and an LLM in Environmental Law from Queen Mary University of London, where he is also currently completing a PhD in Animal and Environmental Law, focusing on biodiversity and conservation. Additionally, he is studying towards a sustainability qualification from Harvard University. Clinton is a fellow of the Zoological Society of London.

Clinton Adas