Zoetis

A1.1. Zoetis continues to acknowledge increased restrictions on the use of antibacterials in food-producing animals, as well as shifting consumer demand, as risks to the business. It does not explicitly identify AMR as a material financial risk despite the potential for reduced efficacy of the antimicrobials it sells. A1.2. Zoetis continues to highlight that it believes veterinary professionals should be involved in all decisions about how antibiotics are to be used. In 2021, Zoetis launched its board-endorsed ‘Driven to Care’ sustainability strategy. This included an objective to promote a ‘preventative approach to animal health with positive implications on human health’. Within this objective, Zoetis made two commitments: (i) promote responsible use of antibiotics through introducing antibiotic alternatives, and developing diagnostic and digital tools (ii) innovate around AMR to reduce the dependency on antibiotic classes shared with human health. Zoetis continues to report on these commitments in its 2024 Sustainability Progress Update. Zoetis appears to be actively reducing its exposure to livestock antibiotics, reporting a reduction in the percentage of its total revenue derived from livestock antibiotics each year since 2019. Notably, in 2024 Zoetis divested its portfolio of medicated feed additives (MFA), certain water-soluble products and related assets. Zoetis states that this is part of its strategy to focus its investments on vaccines, biologics and genetic programs that drive animal health, productivity and sustainability. The company states that it expects the total revenue attributable to antibacterials for livestock will decrease as a result of this divestment. In 2024, sales of livestock antibiotics contributed 10% of total revenue, and in 2025 this was reduced to 7.5% of total revenue. Notably, the company no longer describes Draxxin®, an injectable anti-infective containing the critically important antibiotic, tulathromycin, as one of its top-selling products. In 2023, the company disclosed that the patent had expired in most markets suggesting the reduced sales were not part of an active strategy to reduce its exposure to antibiotics. It is worth noting that the company is focused on developing new antimicrobials for veterinary use only, which could ultimately increase its exposure to veterinary-only antimicrobials. A1.3. Zoetis reports on its total revenue from antibiotics for livestock in its 2024 Sustainability Progress Update and in the risks section of its annual report. Revenue attributable to antibacterials from livestock decreased by ~45% from $1.3 billion in FY2018 to $713 million in 2025 following the divestment of its medicated feed additive portfolio in 2024. The company does not specifically report on its revenue from antibiotics by (i) intended species, (ii) World Health Organization (WHO) classification, (iii) geography, and (iv) application method.

A.2.1. Zoetis states that it remains committed to ‘the responsible use of antibiotic medicines’ and continues to advocate veterinary professionals should always be involved in decisions on the use of antibiotics. It highlights its commitments to focus on prevention through the tools it offers and educating its customers on responsible use. This has not changed in its 2024 reporting. Zoetis emphasises responsible antibiotic use globally and continues to educate customers on responsible use as well as alternatives and good husbandry practices. It is unclear what it defines as responsible use in this context. As before, the company does not disclose sales incentive structures, nor does it report on internal policy enforcement. Since 2020, Zoetis has voluntarily removed growth promotion indications globally for antibiotics classified as medically important by the US Food and Drug Administration (FDA). A.2.2. Zoetis has publicly announced that it does not sell medically important antibiotics (as classified by the FDA) for growth promotion in animals anywhere in the world. The company implemented this change in European Union (EU) markets in 2006 and its US markets in 2017, in compliance with regulatory changes that banned the sale of medically important antibiotics for growth promotion. Positively, Zoetis voluntarily chose to expand this commitment to cover all geographies in June 2020. Zoetis has not publicaly stated that it has removed indications for routine disease prevention. A.2.3. From public disclosure, it remains unclear who is responsible for the company’s strategy for the sale and marketing of antibiotics. A.2.4. It is unclear if Zoetis has a sales incentive scheme for antibiotics. It, therefore, cannot be ascertained whether Zoetis has decoupled incentives for sales agents from sales volumes of antibiotics.

B.1.1. In its 2022 Sustainability Report (SR), the company stated that it had a Pharmaceuticals in the Environment (PiE) Program, which assessed how active pharmaceutical ingredients (APIs) are managed throughout the manufacturing processes to ensure that wastewater discharges meet safe emissions limits. The company implied that environmentally responsible manufacturing of antibiotics was included in these assessments, however it was unclear if it was actively monitoring its wastewater discharges. Zoetis did not provide details as to whether the safe emission limits it refers to align with predicted no effect concentrations (PNECs) outlined in frameworks such as the AMR Industry Alliance (AMRIA) Antibiotic Manufacturing Standard. In its 2024 SR, the company continues to highlight its PiE program but does not specifically refer to the environmentally responsible manufacturing of antibiotics. It is therefore unclear to investors if the company is currently assessing or monitoring levels of APIs from its antibiotic manufacturing to ensure these are within the PNECs outlined in guidance from either the AMRIA Manufacturing standard or the more recent "Guidance on wastewater and solid waste management for manufacturing of antibiotics" published by the WHO in 2024. B.1.2. As before, the company’s PiE program covers its manufacturing sites and suppliers' facilities. B.1.3. The company does not specifically disclose how it handles non-compliance with its PiE program. B.1.4. The company discloses that it operates 21 manufacturing sites in countries such as Australia, Belgium, Brazil, China, Denmark, Ireland, Italy, New Zealand, Norway, Spain, and the US. However, it does not disclose information about where its 90 CMOs or additional third-party suppliers or manufacturers are located. It is not clear which of these sites manufactures antibiotics.

C.1.1. As part of its ‘Driven to Care’ strategy, Zoetis has a target to ‘Promote responsible use of antibiotics through technical education, introducing antibiotic alternatives, and developing diagnostic and digital tools’. As before, Zoetis does not specifically define alternatives to antibiotics but provides a high-level statement that it is focusing on disease prevention as well as new classes of antibiotics for veterinary use only, non-antibiotic anti-infective solutions, diagnostics, immunomodulators and precision health tools. The last four could be considered alternatives as they may help reduce the need for antibiotics. C.1.2. As Zoetis has not defined its alternative product portfolio, the company does not disclose the percentage of products that could be considered alternatives to antibiotics. Providing effectiveness disclosures is vital for convincing protein producers to switch from antibiotics to alternatives. Zoetis provides limited disclosures on how it assesses the effectiveness of its alternatives to antibiotics. However, it reports that in 2024, a study on its Vetscan™ Rapid Mastigram+ test found that diagnostic testing reduces antimicrobial use and increased profitability. The company does not quantify this. Zoetis also reports that a December 2023 study found that vaccinating broiler chickens using its Poulvac® ST vaccine reduced Salmonella prevalence in chicken meat at processing. Its reporting does not quantify this. In 2020, Zoetis also referred to a trial study conducted by the Zooprophylactic Institute of Rome and Zoetis. It found that Vetscan DC-Q, a diagnostic solution for dairy cattle, reduced the need for antibiotics by 55%, with equal milk quality and performance of the cows. C.1.3. Zoetis does not disclose the percentage of revenue from alternatives to antibiotics. The company divested its medicated feed additive portfolio in 2024, and has stated that this has allowed it to focus its investments on vaccines, biologics and genetic programs. As the revenue from alternatives is not disclosed, however, it is difficult for investors to quantify the extent to which it is focusing on alternatives.

C.2.1. Zoetis disclosed that it spent $698 million on R&D in FY25. As in FY23 and FY24, this is equivalent to approximately 7% of its total revenue. Zoetis does not disclose what percentage of its R&D spend is dedicated to the development of alternatives to antibiotics. The company provides a high-level statement in its 2024 SR which suggests it is focusing on alternatives to antibiotics following the divestment of its medicated feed additive portfolio in 2024. If the company were to quantify the percentage of its spend on R&D into alternatives, this would help investors to better understand the extent to which it is focusing on developing alternatives to antibiotics. C.2.2. Zoetis has been acquiring companies that could help develop products that reduce antibiotic use. In 2018, Zoetis acquired Abaxis, a company specialising in diagnostics. In February 2024, the company entered into a collaboration with Blacksmith Medicines to develop antibiotics for animal health and reduce the need to use shared-class antibiotics. In 2026, after the initial assessment cut off date, Zoetis announced it will acquire the animal genomics business from Neogen which it states will contribute to advancing its precision animal health portfolio. C.2.3. Zoetis provides no disclosure on its marketing spend for antibiotics nor alternatives to antibiotics.

D.1.1. Zoetis continues to disclose its running or participation in initiatives that could help improve antimicrobial stewardship. As in previous reporting, Zoetis highlights two targets in its ‘Driven to Care’ strategy; (i) Promote responsible use of antibiotics through technical education, introducing antibiotic alternatives, and developing diagnostic and digital tools; (ii) Innovate around anti-microbial resistance to reduce the dependency on antibiotic classes shared with human health. Zoetis’ African Livestock Productivity and Health Advancement (A.L.P.H.A.) initiative ran from 2017 to 2022, and aimed to improve livestock health and, in turn, reduce reliance on antibiotics in Sub-Saharan Africa by expanding access to preventative tools and early disease detection. In 2022, Zoetis launched the A.L.P.H.A Plus initiative that expanded the initiative’s scope to include seven new countries across East, West, and Central Sub-Saharan Africa. Zoetis continues to state on its Antibiotic Stewardship webpage that it supports organizations in Latin America that provide training to veterinarians on the responsible use of antibiotics, however, it is unclear when this was last updated. In 2024, Zoetis joined The National Institute on Antimicrobial Resistance Research and Education (NIAMRRE), which states that it helps support and guide research and education conducted on antimicrobials in the United States. Members include academic institutions, biotech firms, protein producers and certification providers. D.1.2. In 1998, Zoetis established an AMR surveillance program, which it reported covered 29 bacterial pathogens from five animal species in the US and Canada by 2022. The program collects samples from farm animals, feed-lots and veterinary clinics. Zoetis has not provided a recent update related to this programme. The company does not disclose evidence of stewardship efforts to reduce antibiotic residues entering the environment from farms but does acknowledge that the primary source of a veterinary pharmaceutical entering the environment from its products occurs after elimination from the treated animal.

D.2.1. On its website, Zoetis states it has a policy on political contributions, which requires the company to report in line with regulations. The company lists its sustainability collaborations and partnerships, including its memberships. Zoetis reports on its annual contributions above $50,000 to trade associations. In 2024, this included $89,091 to the Animal Health Institute (lobbying organisation). There is no mention of its position or approach to lobbying relating to AMR or antibiotics specifically and it is unclear what specifically these organisations have lobbied for related to this topic.