As recognised by the United Nations, the inappropriate use of antibiotics in animals is a leading cause of rising antimicrobial resistance. China leads the way as the largest consumer of veterinary antimicrobials, both in relative and absolute terms.
Recently, we engaged with China Mengniu, a leading Chinese diary company, on the use of antibiotics on milk-producing cows. Encouragingly, the company was responsive. Mengniu published its antibiotics policy in its Sustainability Report, and it started to limit the use of antibiotics for the treatment of verified diseases only.
We have also had a positive and constructive discussion with management on climate change issues, including the adoption of science-based emission reduction targets and water use programmes.
Duratex is the largest producer of industrialised wood panels, sanitaryware, metal taps and shower heads in the southern hemisphere. It is aligned to SDG 8, 12, 13 and 15.
In 1995, Duratex became the first company in South America to receive Forest Stewardship Council (FSC) certification. FSC certified forests are managed in a way that preserves biological diversity and benefits the lives of local people and workers, while ensuring they sustain economic viability. As of 2018, 95% of the company’s forests are FSC certified – and it aims to reach its target of 100% certification by 2025.
The company’s forests have captured an estimated 4.9m tonnes of carbon in Brazil last year, while in Colombia, it obtained an ICONTEC Forest Compensation Certificate, showing that it captured 956,000 tonnes of carbon from 2010 to 2017. In 2018, Duratex sold its Colombian carbon credits with proceeds of $4m, making it the first large Colombian company to offset emissions and trade carbon credits.
From Chile to Hong Kong, a number of demonstrations were held in various parts of the world in Q4. Emerging markets tend to lag on social issues, but investors often overlook this. Nevertheless, unrest caused Chile to underperform the MSCI EM index by 21% in Q4. In our view, investors should consider social factors as part of their top-down analysis of emerging markets.
In general, when unrest triggers change, it may slow down market-friendly reforms but speed up populistic ones (such as a higher public spend on welfare). Against this backdrop, investors will have to factor in higher fiscal budgets and inflation as well as a positive outlook for low-income consumers.
To find out more, read our full report here.
