Why an Australian super fund and Texan nuns are lobbying the world’s biggest fast-food company

When it comes to McDonald’s, an $84 billion Australian superannuation fund and a small group of Texan nuns are united in their mission.

Hesta and the Benedictine Sisters of Boerne are part of an investor movement using the stock market to lobby the world’s biggest fast-food chain.

They want the company to make burgers from animal products farmed with fewer antibiotics.

The use of antibiotics in meat production has emerged as a new front of shareholder activism, similar to the lobbying that fossil fuel companies have been facing over climate targets. 

However, the investor group’s push is divisive, with McDonald’s hitting back and scientists raising questions about some of the policies being put forward.

The unlikely antibiotic allies are resolute in their bid to bring about structural change, despite the criticism.

“We intend to stay at the table,” Sister Susan Mika, a representative of Benedictine Sisters of Boerne, told the ABC.

So how did a group of Texan nuns and a major super fund end up in a cross-country battle with an American takeaway staple?

The Catholic nuns taking on McDonald’s

The Benedictine Sisters of Boerne have a 32-year history of lobbying companies on issues such as water access and foreign workers’ rights.

Their activism was spearheaded by Sister Mika and others, quickly growing into a coalition of 26 monasteries across the United States and Mexico. 

However, the sisters didn’t get interested in antibiotics reduction until about 10 years ago, when global attention was turning to antimicrobial resistance (AMR).

AMR occurs when bugs that cause infectious disease can’t be killed by the medicines designed to quash them, such as antibiotics.

It has given rise to so-called “superbugs”, with bacterial AMR contributing to the deaths of about 4.95 million people in 2019, according to data published in the Lancet.

The problem is particularly acute in poorer countries, and it also affects farm animals when they face disease outbreaks. Even plants are facing superbugs.

“It’s really a significant problem,” said Branwen Morgan, the lead at the Antimicrobial Resistance Mission at Australia’s national science body, the CSIRO. 

“And there’s no time to wait. We all have a shared responsibility, trying to work out how we mitigate the impacts of AMR, which affects food security, biosecurity and economic security.”

It is those economic impacts that piqued Hesta’s interest.

“So antimicrobial resistance is a systemic threat to both global health and our ability to deliver strong long-term returns to our members,” the fund’s head of responsible investment, Kim Farrant, told the ABC.

Ms Farrant cites modelling by the World Bank, which previously estimated that AMR – if left unchecked – could wipe out 3.8 per cent of the world’s gross domestic product by 2050.

The bank’s high-impact scenario found global trade would drop, especially in agriculture as animals get sick, and that healthcare costs globally would soar. 

“It’s the same impact as the global financial crisis,” Ms Farrant says of the World Bank’s forecast.

Hesta, which is a specialist superannuation fund for Australian healthcare workers, has also done surveys with its 1 million members about this topic, and found 80 per cent of them were aware of it.

Members told the fund they were seeing diseases that were no longer treatable, and they were having to give patients multiple types of antibiotics and keep them in hospital longer.

“And they had views on what Hesta should be doing as a fund to help address this issue,” Ms Farrant says.

So what can a fund do about AMR?

While AMR is a natural phenomenon, the World Health Organisation (WHO) links the “overuse and misuse” of antibiotics in people, plants and animals to the exacerbation of this trend.

“In Australia, we’re really fortunate that we have quite strong regulation and practices [around antibiotic use in animals and humans]. But this is very much a global issue,” Hesta’s Kim Farrant says. 

And this global approach has turned McDonald’s into a target.

Fairr, which is a global investor alliance working on risks in the world’s food sector, identified the fast-food chain as the top company to lobby over this issue.

That’s due to its sheer size and ability to influence a massive network of agricultural suppliers, Fairr said.

Fairr also highlighted other food companies, including KFC’s parent company Yum! Brands, The Cheesecake Shop, Domino’s Pizza, Starbucks, Wendy’s and the owner of Burger King, Restaurant Brands International.

All of these entities are listed on the world’s biggest stock market on Wall Street, and are beholden to engaging with their shareholders as public companies.

Hesta owns McDonald’s stock — specifically 0.014 per cent of its market value — through an international fund, as well as shares in Yum! Brand’s and US food giants Tyson and Hormel. 

It officially joined Fairr in 2020 to fight AMR before going on to lodge shareholder resolutions two years later.

These are actions that are lodged by entities that own stocks in a company and are voted on by all other shareholders, and are a big part of the shareholder movement that is also fighting climate risks. 

Hesta’s first AMR resolution was against Hormel, the American owner of tinned meat, Spam.

The Hormel Foods resolution urged the company to conduct a study into the public health costs from the use of antibiotics in its supply chain.

The vote received 14 per cent in favour, excluding management’s 47 per cent ownership.

The next year, Hesta lodged more resolutions, this time against three companies: Hormel, Tyson, and McDonald’s.

What do experts say about antibiotics resistance?

The action against McDonald’s was done by Hesta in tandem with an advocacy group that is prominent on AMR, The Shareholder Commons, and another investment fund, Amundi.

Their joint resolution on the NYSE called on McDonald’s to comply with WHO guidelines on the use of antibiotics in food-producing animals.