Preventing the next pandemic may start with supply chains

Reducing meat consumption would go a long way toward cutting the likelihood of viruses cropping up.
Reducing meat consumption would go a long way toward cutting the likelihood of viruses cropping up.PHOTO: REUTERS

NEW YORK (BLOOMBERG) - Pandemics haven't always been top of mind for investors focused on environmental, social and governance issues. But a handful have been warning for years that some corporate practices-particularly those in global supply chains-lay the groundwork for them.

The new coronavirus is just the latest infectious disease to originate from human interactions with animals. They are zoonotic - triggered by germs spread between animals and humans. Three out of every four new or emerging infectious diseases in humans come from animals, according to the US Centres for Disease Control and Prevention.

Investors who focus on the interplay between environmental and public health issues - ensuring access to medicines, protecting antibiotic effectiveness, fighting deforestation - say their work had only just begun to gain traction. The current pandemic, it seems, may accelerate interest.

Dr Finny Kuruvilla, chief investment officer at Eventide Asset Management, says reducing meat consumption, for example, would go a long way toward cutting the likelihood of such viruses cropping up.

A graduate of Harvard Medical School, Dr Kuruvilla explained during an investor call this month the long history of human-animal interaction leading to disease and death. Influenza originated with pigs and chickens. Middle East respiratory syndrome (Mers) from camels. Salmonella from chickens. Mad cow disease from cows. And Severe acute respiratory syndrome (Sars), which is similar to the new coronavirus, is thought to stem from bats and possibly civet cats.

Usually seen through the lens of global warming, deforestation also carries with it a nasty biological component for humans.

"There are all these other unintended consequences of deforestation, like the encroachment on endangered species, and the hunting and killing of wild animals that can release viruses previously contained in their ecosystem," says Ms Leslie Samuelrich, president of Green Century Capital Management in Boston.

Ms Samuelrich says investors can reduce environmental and pandemic risks (both in their portfolios and out in the world) by dumping companies with factory farm products or engaged in deforestation. They can also push meat companies to cut antibiotic use (reducing the risk of antibiotic-resistant super-bugs) or invest in makers of meat alternatives, she says.

"The connections have always been there," Ms Samuelrich says. "Things that are problematic because they cause environmental damage are also incredibly relevant to investors concerned about public health."

Mr Jeremy Coller, chief investment officer of Coller Capital, agrees. Also the founder of London-based investor network Farm Animal Investment Risk & Return, Mr Coller sees more bad news for big meat companies that are already under fire for environmentally destructive business models.

"After Covid-19, many investors will shift capital away from those businesses most exposed to the risk of the next zoonotic-based pandemic," Mr Coller says. "That is, traditional animal protein producers who are failing to act in areas such as climate or alternative proteins."