Responsible investors can help mitigate zoonotic disease risks

As COP16 starts on 21 of October the world turns its eyes to Cali, Colombia, and the work that needs to be done to stop biodiversity loss. One important aspect related to increased biodiversity and changes in land-use, is the spread of zoonotic disease. There is growing evidence that human activities, including deforestation, forest fires, the expansion of agricultural land, and increased hunting and trading of wildlife, increases zoonotic disease risks.

"The health of the Amazon ecosystems is directly linked to the health of its people. Urgent action is needed to strengthen health care, protect indigenous rights and mitigate climate change" says Sandra Hacón, member of the Science Panel for the Amazon (SPA).

Link beween investments and zoonotic disease

The COVID-19 pandemic has highlighted the importance of preventive strategies for new pathogens. The IMF estimates that the economic impact of COVID-19 could hit $12.5 trillion by 2024. Investors as well as governments thus have strong economic incentives to address such diseases proactively.

The production of certain types of high deforestation-risk commodities - such as palm oil, maize, rice, sugar cane and soybeans - have been linked to increased zoonotic spill-over through forest and landscape fragmentation, and habitat loss.

This means that financial institutions - including asset managers, pension funds and multilateral development banks – may increase zoonotic disease risks through their investments in such extractive activities. This is illustrated in the figure below.

Active ownership needed

Responsible investors have already contributed in important ways to current discussions about the need to shift investments to address climate change, and increasingly also engaging on biodiversity issues. However, these engagements will not be enough to reduce growing zoonotic disease risks, which require specific policies and engagements aligned with a planetary health agenda.

“Zoonotic diseases can, as the COVID-19 pandemic showed, have devastating effects on human health and societies. Investors such as pension funds and development banks have a responsibility to help mitigate them through their active ownership and through good sustainability practices” says Centre researcher Victor Galaz.

Responsible investors and investor alliances can use their influence as owners, and help mitigate zoonotic disease risks in the following way:

1. Joining global initiatives
   Work through existing international initiatives like Finance for Biodiversity (FfB), Global Canopy’s Forest500 initiative, and the Investors Policy Dialogue on Deforestation (IPDD), and complement ongoing engagement work on deforestation issues, with an explicit focus on mitigating zoonotic disease risks.
   
   
2. Demanding zoonotic risk disclosures
   Advance investor demands on financial disclosure of not only climate-risks, but also zoonotic risks resulting from anthropogenic land-use changes including deforestation, agricultural intensification, and habitatand biodiversity loss.
   
   
3. Creating deforestation policies
   Create and enforce deforestation polices, and engage with a selected number of companies to develop corporate policies that focus on mitigating zoonotic risks explicitly.
   
   
4. Using voting power
   Use oversight and voting power at annual general meetings to pressure corporate managements to adopt and act on zoonotic-risk policies, as well as complement existing sustainability and climate reporting with financial disclosure of zoonotic disease risks.

Read the full policy brief "How investors can help reduce zoonotic disease risks" here. Pdf, 302.2 kB. (Pdf, 302.2 kB)