On Your Behalf - October Report

HIV/AIDS, the Business Community and the Faith-Based Investor

Not all anniversaries are happy. Twenty-five years ago, the first cases of what we now know as Acquired Immunodeficiency Syndrome (AIDS) were documented in the United States. Since then, this modern-day plague has taken more than 25 million lives around the world and surpassed both malaria and tuberculosis as the world's most deadly infectious disease among adults. Today, AIDS is the fourth leading cause of death throughout the world.

A Grim Reality

These statistics are only estimates. Given the stigma attached to AIDS, the true extent of this disease may never be known. We do know, however, that in some parts of the world, AIDS is growing at an alarming rate and that the number of persons living with AIDS and HIV, the virus that causes AIDS, is estimated at an all-time high of more than 40 million. We also know that approximately two-thirds of all those infected with HIV live in sub-Saharan Africa.

Though great advances have been made in the fight against AIDS, AIDS remains incurable, but the good news is that sustained antiretroviral treatment can help those infected with HIV live longer, healthier lives. Unfortunately, many of those needing antiretroviral treatment are not getting it. The Joint United Nations Programme on HIV/AIDS estimates that in Africa, only about 10% of the infected population is receiving any kind of treatment.

More than individuals are affected. Communities experience devastation as well. New-born infants are infected from their mothers, children are orphaned at an early age, communities lose economically productive adults, governments are challenged to pay for expensive health care, businesses struggle to find healthy workers and so on.

The Challenge for Business

HIV/AIDS presents an especially serious challenge to business. In countries where the prevalence of HIV/AIDS is on the rise (in South Africa, it increased from less than 1% to nearly 25% of the population from 1990 to 2000), companies face many daunting issues: a shrinking workforce (most HIV/AIDS sufferers are between the ages of 15 and 49), decreased productivity from workers living with HIV, decreased worker morale and increased health care and treatment costs. Some studies have suggested that countries adversely affected by HIV/AIDS experience reduced foreign investment and noticeable impediments to the flow of goods and capital.

As an investor holding the securities of many companies operating in HIV/AIDS afflicted areas, the General Board of Pension and Health Benefits (General Board) is anxious that businesses understand the risks of this destructive disease. HIV/AIDS can place enormous pressures on a company's ability to operate profitably while disregard of the disease may lead to an eventual erosion of shareholder value. At the same time, businesses are especially well-placed to offer communities life-saving prevention programs, health care options that prolong life and workplace policies that promote non-discrimination, respect and confidentiality. In some corners of the world, the only help AIDS sufferers will ever receive may come from the companies where they work. It is a burden, but also an opportunity.

The General Board Responds

As a faith-based investor, the General Board has encouraged a number of companies to consider the HIV/AIDS crisis and to prepare reports discussing the risks—and the opportunities—involved. Such reports allow companies to formulate policies and procedures that may mean the difference between life and death for those who are infected or are at risk of infection.

An example is Exxon Mobil, whose extensive operations in Africa make it especially vulnerable to AIDS-related work issues. In 2004, the General Board filed a shareholder resolution requesting Exxon Mobil consider the effects HIV/AIDS (and malaria and tuberculosis) could have on its business strategy and global operations. Ensuing discussions revealed that Exxon Mobil had already committed to an ambitious HIV/AIDS program focusing primarily on education and prevention. Components of the StopAIDS program, launched in 2004, include improving access to HIV testing and treatment, the strengthening of local health care capabilities and a strong commitment to non-discrimination and confidentiality in the workplace.

In addition to the preparation of reports, some companies are able to respond directly to the HIV/AIDS crisis. Pharmaceutical companies play a pivotal role in making life-saving HIV/AIDS (and tuberculosis and malaria) drugs affordable and available. The General Board has held numerous discussions with Abbott Laboratories, Merck & Co., Pfizer and Wyeth and in some cases, the cost of HIV/AIDS medicines has been lowered.

The United Methodist Church has said that "all individuals living with HIV and AIDS should be treated with dignity and respect," that it is the "responsibility of the Church to minister to and with these individuals" and that "their rights to employment, appropriate medical care, full participation in public education, and full participation in the Church," must be supported (¶162S, The Book of Discipline 2004). The General Board will continue to advocate for those who suffer from this devastating disease by encouraging companies to embrace activities that offer hope and healing.

For a statistical update on AIDS, please refer to the 2006 Report on the Global AIDS Epidemic, available at http://www.unaids.org/en/HIV_data/2006GlobalReport/default.asp. For a closer look at the business response to AIDS, please refer to Business & HIV/AIDS: A Healthier Partnership?, available at http://www.weforum.org/en/initiatives/globalhealth/Global%20Business%20Surveys%20&%20Reports/index.htm.