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January 20, 2005
World Economic Forum Report Finds Decreasing Corporate Awareness and Response to AIDS
    by William Baue

The report also finds an increase in companies adopting HIV/AIDS policies, a trend confirmed by the Global Business Coalition on HIV/AIDS.


HIV/AIDS is a slow, silent killer, but not just on the individual level--it poses a significant threat to business as well.

"AIDS is spreading as a threat to the business community and to the global economy in a very silent way, in the same way it lives in your body," says Dan Rosan, director of the public health program at the Interfaith Center on Corporate Responsibility (ICCR). "If you look at the epidemiology of HIV/AIDS, the disease is silent in your body for years, spreading very quietly until it emerges suddenly and you become sick very quickly."

"The reason HIV spreads is because people are silent about it, they deny it--that happens in each patient's body, but it also happens across entire communities and societies that don't grapple with the problem," Mr. Rosan told SocialFunds.com. "What business leaders need to do is address the threat of HIV/AIDS now, before it becomes emergent, in the horrible ways now visible in Africa, in places like India and China."

However, business leaders worldwide seem to lack such foresight, according to a report released today by the Global Health Initiative (GHI) of the World Economic Forum (WEF) and UNAIDS, which finds decreasing awareness and response to HIV/AIDS by companies compared to last year's report. The report, entitled Business and HIV/AIDS: Commitment and Action?, is based on the WEF's 2004-2005 Executive Opinion Survey of 8,719 business leaders in 103 countries. The annual survey, which started in 1979, added questions on HIV/AIDS for the first time last year; this year, nine questions addressed HIV/AIDS.

Key findings of the report include a 24 percent decrease in concern among businesses over the last 12 months and an increase from 36 percent to 66 percent in the number of business leaders who could not estimate the prevalence of HIV-positive employees in their workforce. Whereas 21 percent of last year's respondents expected serious business impacts from HIV/AIDS, even less (12 percent) of this year's respondents feel this way.

"While we agree with the overall conclusion that businesses aren't doing enough to address HIV/AIDS, we can't agree with the analysis that interest has decreased by 24 percent," said Trevor Neilson, executive director of Global Business Coalition on HIV/AIDS (GBC). GBC assists over 170 member companies address HIV/AIDS. "We have witnessed just the opposite."

"We've had an explosive growth in the number of companies who have joined GBC--60 companies have joined in the last 12 months, a 40 percent increase in our membership," Mr. Neilson told SocialFunds.com.

Although the report's findings on executive opinion may run contrary to Mr. Neilson's experience, its findings on corporate policy-making may confirm his opinion that more can be done but that some progress is taking place. Almost three-quarters (71 percent) of companies surveyed have no policies (formal written policies or informal ones) in place to address the disease, but the number of companies implementing policies has indeed increased since the last report.

Moreover, GBC deals with a relatively limited number of companies compared to the extremely broad scope of the survey.

"Without diminishing the contributions of some companies in any way, this report gives unprecedented insight into what the 'average' company is doing on country-by-country and industry-by-industry bases and can track it over time," Dr. Kate Taylor, director of the WEF GHI, told SocialFunds.com.

From the investment perspective, corporate response to HIV/AIDS may have a significant influence on shareowner value in the future.

"For investors who want to be in markets such as India and China, where HIV/AIDS is emergent, over the next 5 to 25 year, this is a real fiduciary risk," said Mr. Rosan of ICCR.

ICCR has been addressing this fiduciary risk through shareowner action, such as dialoguing with companies and filing shareowner resolutions, efforts that have resulted in companies such as Coca-Cola (ticker: KO) and Ford (F) to issue reports assessing their HIV/AIDS policies.

"There is no doubt that shareholder action is causing many companies to sit up and take notice" of the risks surrounding HIV/AIDS, said Mr. Neilson. "It gives corporate leaders a reason to officially get involved, as something that could be perceived as purely altruistic instead becomes something that needs to be dealt with in the normal course of business."

 

 
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