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Vaccine equity

January 24, 2022
  • In North America we are well underway to getting our booster shots, while many people in low-income countries are still waiting to receive their first dose.
  • Experts warn that “vaccine hoarding” by wealthier nations may lead to a longer global pandemic, which could have lasting human and economic consequences. If we want to speed up global recovery, we need to tackle vaccine inequity.
  • Investors can do their part by calling upon investee pharmaceutical companies and governments to prioritize advancing global access to vaccines and sharing vaccine manufacturing technology and expertise.

Currently the world is trying to tackle the Omicron variant. The good news: close to 61% of the world’s population has received at least one dose of a COVID-19 vaccine. The bad news: there is a stark global divide. Only about 1% of worldwide vaccine doses have been given to people in low-income countries whereas 72% of worldwide shots have been administered to people in high and upper-middle income countries. The World Health Organization (WHO) graphic below shows that African countries specifically are being left behind.

World covid 19 vaccination status map index

Map showing World Total Vaccination. For more information go to

The risks of unequal access to the vaccine

What are some of the risks of failing to share vaccines equitably?

  • The WHO might be unable to reach its goal of 70% worldwide vaccinations by summer 2022, which is needed to reach high population immunity.
  • The International Monetary Fund (IMF) reports that the massive gap in vaccination rates between advanced and poorer economies could cost the global economy US $5.3 trillion over five years.
  • Vaccine inequity increases the risk of new mutant variants, which could emerge from the virus replicating in unvaccinated populations. This would lead to a prolonged pandemic, further deaths, travel restrictions, supply chain disruptions and border closures around the world.
  • The worst impacts of the pandemic have already been felt by the poorest and most vulnerable people already at risk; a prolonged pandemic will further deepen wealth gaps.
  • What does this mean for investors? The IMF is set to further downgrade its global economic growth projections on January 25, 2022 due to impacts of the Omicron virus. In its October 2021 Global Financial Stability report, it warned new virus mutations could present increased risks to financial stability.

Why are vaccines not shared equally?

Global vaccine inequity is not new, but because of COVID-19, it has gained more spotlight in the public debate than ever before.

For COVID-19 vaccines, low-income countries rely on COVAX, a vaccine-sharing arrangement formed by several UN bodies including the WHO. While 190 countries signed on to donate and receive vaccines, high-income countries did not participate as expected, instead signing large advance contracts with vaccine manufacturers and hoarding doses. This put poorer countries at the back of the waiting line.

The People’s Vaccine Alliance found that only 14% of the pledged 1.8 billion vaccine donations by wealthier countries to COVAX have been delivered due to manufacturing delays, vaccine nationalism and export restrictions. The European Union and United States prohibit exports of certain vaccines and vaccine ingredients, with the EU insisting that pharmaceutical companies fulfill promised vaccine deliveries to the EU before exporting elsewhere.

This has led to a severe lack of vaccine supplies for COVAX countries.

And, there are only a handful of companies creating and manufacturing COVID-19 vaccines, including Pfizer, Moderna, AstraZeneca and Johnson & Johnson. While we have seen incredible innovation and hard work from these companies in developing effective vaccines, there is more that they can do.

Firstly, there is currently limited transparency by the vaccine manufacturers around how vaccine contracts are fulfilled and prioritized for high-income countries versus those for COVAX. Secondly, a significant increase in vaccine supply is required to meet global demands. Global health advocates and governments of low-income countries have called on pharmaceutical companies to share vaccine production know-how, invest in local manufacturing capabilities and temporarily waive intellectual property (IP) protections to make the vaccine more widely and easily accessible. Pharmaceutical companies have pushed back, arguing IP waivers would decrease the incentive for future innovation, particularly for the mRNA vaccines, and that wider distribution and production is too complex because of the relatively new technology involved. While the WHO has set up technology-sharing hubs and tools to scale up global manufacturing, vaccine manufacturers have shared little through this initiative so far.

What investors can do

Investors can play, and have played, a crucial role in advocating that pharmaceutical companies incorporate access to medicine and provision of vaccines to low- and middle-income countries into their commercial business strategies, rather than only through donations or charity work. This includes making medicine available in those markets, creating affordable pricing strategies and considering licensing agreements. However, a global pandemic requires companies to closely align with global health goals as set out by the WHO.

As a long-standing supporter of the Access to Medicine Foundation, BMO Global Asset Management (GAM) supported the Foundation’s call for a fair and equitable response to the COVID-19 crisis early on in the pandemic and has been engaging pharmaceutical companies on their response throughout.

More recently, BMO GAM supported an investor letter to the major pharmaceutical companies to urge them to incorporate WHO goals into their executive and director compensation frameworks, to support the achievement of a fair and equitable global vaccine strategy.

Organized by Dutch institutional investor Achmea, the letter was signed by 65 investors representing $3.5 trillion in AUM and sent to the boards of Pfizer, Moderna, AstraZeneca and Johnson & Johnson.

The letter called for the pharmaceutical companies to align with the WHO’s roadmap by:

  1. Urgent prioritization and fulfilment of COVAX and African Vaccine Acquisition Trust (AVAC) contracts.
  2. Providing full transparency on monthly production of COVID-19 vaccines and schedules for COVAX and low-income countries.
  3. Active engagement and work with countries that have both high vaccination coverage and contracted volumes of vaccines to allow for prioritization of COVAX and AVAC contracts.
  4. Committing to sharing know-how more rapidly, facilitate technology transfer and provide transparent non-exclusive voluntary licenses to ensure reliable, affordable and available vaccines.

The investor group requested that these WHO goals be integrated into the executive remuneration strategy in a meaningful, material, measurable and transparent way.

During 2021’s proxy season, BMO GAM supported shareholder proposals requesting more transparency around COVID-19 vaccine access and pricing from Pfizer and Johnson & Johnson and voted against executive compensation at Moderna, AstraZeneca and Johnson & Johnson’s Annual Shareholder Meetings. Each company’s executive compensation plan will be assessed this coming proxy season by BMO GAM, taking into account whether or not they have integrated the request to incorporate WHO goals into their executive compensation strategies.

If we want to speed up global recovery, we need to tackle vaccine inequity. A prolonged pandemic will not only lead to more devastating loss of life, but also have significant financial ramifications for investors. We hope that other investors join us in engaging vaccine providers on increasing supplies in lower-income countries.

Further reading


This article is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.

Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.

BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc. and BMO Investments Inc.

 ®/™Registered trademarks/trademark of Bank of Montreal, used under licence.


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