Investors Must Tackle Vaccine Inequity

by Peter Singer| January 24, 2022

Omicron is a wakeup call — as if we needed another — that to help end the pandemic, we must vaccinate the world.

Vaccine inequity has cost an astonishing number of lives. It is a moral outrage, not least because most such deaths were avoidable. But vaccine inequity is also a breeding ground for variants and in turn a serious ongoing risk to the world’s economic health.

For instance, the International Monetary Fund estimates that the economic costs of the pandemic will be $22 trillion.

Most readers will assume that the key players in ending the pandemic are individuals, communities, and governments. I would argue that biopharmaceutical companies and importantly, their investors, also play an essential role.

The World Health Organization has set a baseline goal of every country vaccinating 70% of its population by July 2022. Unfortunately, 88 countries have not vaccinated 40% of their populations, and 36 countries have not vaccinated 10%, meaning health workers and other high-risk groups are going unvaccinated.

Vaccinating the world requires sharing both vaccines and technology. Sharing vaccines saves lives in the short term. After a slow start due to vaccine nationalism and manufacturers prioritizing rich countries, one billion doses have been delivered through COVAX. More are needed.

According to Amnesty International, the percentage of vaccine doses distributed to low and lower middle income countries (which comprise about half the world’s population), is: AstraZeneca (63%), Johnson & Johnson (15%), Moderna (10%), and Pfizer/BioNTech (4%).

Sharing technology, know-how, and intellectual property provides a sustainable solution, so countries can make their own vaccines and increase their self-reliance. Variants and boosters strengthen the argument for local production.

And yet no major companies have announced voluntary licensing of vaccines through the WHO’s Covid Technology Access Pool, and no major mRNA companies have so far supported the WHO mRNA vaccine technology transfer hub. Analyses by the New York Times and Human Rights Watch have demonstrated the feasibility of technology transfer.

While vaccine supply is the main limitation, especially in the face of variants, distribution bottlenecks also need to be overcome. These surface — to a greater or lesser extent — in every country. But we shouldn’t use distribution bottlenecks as an excuse to shut off the supply. Distribution is also dependent on predictable supply: If I deliver to you a bottle of milk every day, and then one day I deliver 100 bottles of milk expiring at midnight, you wouldn’t be able to drink them.

Moreover, vaccines are necessary but not sufficient to reduce transmission. They need to be accompanied by public-health measures that encourage spending time outdoors, opening windows, physical distancing, wearing masks, rapid testing, limiting gatherings, and staying home when sick. Corporate equity goals could apply just as well to diagnostics and therapeutics.

The boards of directors of the leading vaccine manufacturing companies, which have accountability for the actions of the corporations, have failed in their corporate governance role to meet the spirit of the U.N. Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises.

It is time for shareholders to act. Investors could change the approach of biopharmaceutical companies, and it is in their economic self-interest to do so. Whether passive, active, or impact-oriented, all shareholders need to act.

For universal owners that ride broad market trends — for instance, passive leaders like BlackRock, State Street, and Vanguard — vaccine inequity increases the risk of generating another Covid-19 variant. That risk is immense, as we have seen with Omicron, for it could indiscriminately cost the global economy trillions of dollars and hundreds of thousands of lost lives.

For active equity investors who ride the fortunes of individual companies, they ignore vaccine inequity at the risk to their reputation and their social license to operate. This risk is difficult to price. Consider the asset management firm Baillie Gifford, the largest shareholder of Moderna. If Moderna does not make its vaccines more available to the developing world, what does that say about its shareholders’ view of social justice?

The case is even more straightforward for “impact” investors who proactively embrace ethical issues. All lives have equal worth, so the current situation of global vaccine inequity is clearly immoral. This risk is existential since vaccine inequity is antithetical to their corporate missions.

What can investors do?

First, they could support shareholder resolutions like those filed by Oxfam with Pfizer and Moderna to study the feasibility of transferring vaccine technology and know-how so that production can ramp up around the world.

Second, they could integrate WHO goals into the executive remuneration strategy in a meaningful, material, measurable and transparent way, as recently requested by a group of investors with $3.5 trillion in assets. I recently conducted a broad Twitter poll that showed that 78% agreed that pharmaceutical CEO compensation should be tied to global vaccine equity.

Third, if companies are failing to meet vaccine equity targets, then investors could vote against the reappointment of directors, the chair of the compensation committee, or the chair of the board. Or they could vote in favor of the appointment of directors, perhaps specific civil society leaders, who are clearly focused on vaccine equity.

Assertive stewardship strategies have been used by investors to help address the climate crisis, and the practical lessons, including the risk of greenwashing (or in this case, bluewashing) can be applied to vaccine inequity.

This is capitalism at the crossroads. Will it rise to meet the challenge of vaccine equity, the defining challenge of our times and one on which the world is failing? Or will it show that profit reigns supreme?

Dr. Tedros, the director-general of the World Health Organization, who has been a voice of moral clarity throughout the pandemic, recently said that ending the pandemic is not a matter of chance, but of choice.

It is time for shareholders to make their choice known.




We believe that progress to more just, fair and sustainable outcomes requires open and informed discussion. Jackson Hole Economics offers a global platform for a diverse group of authors to share views in clear, jargon-free terms across a range of important issues.

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