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Top European asset owners back UN’s Tobacco-Free Finance pledge

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AP4, FRR and Church Commissioners for England are among the major asset owners backing Tobacco-Free Finance, a new initiative launched this week by the United Nations.

The initiative’s pledge – which has already been signed by 90 asset owners, managers, banks and advisers overseeing $6.8trn (€5.8trn) – cited previous work by the UN, Principles for Responsible Investment, and the World Health Organisation on raising awareness of the health implications of smoking.

The Tobacco-Free Finance pledge stated: “With 7m deaths worldwide each year and a forecast of 1bn deaths this century due to tobacco-related illnesses, global and multi-stakeholder collaboration is needed to tackle the devastating impact of tobacco on society, as well as on the environment.”

European financial services companies including NN Group, BNP Paribas, Natixis, AXA and Robeco have signed the pledge, as have pension funds such as Denmark’s Laegernes Pension, the UN Joint Staff Pension Fund and 15 Australian superannuation funds.

Citing the UN’s third Sustainable Development Goal – “ensure healthy lives and promote well-being for all at all ages” – Tobacco-Free Finance said its signatories would “collaborate to raise awareness of the issue of lending to, investing in, and insuring tobacco companies”.

A number of European pension funds and asset managers have independently moved to cut tobacco companies from their portfolios this year, including Europe’s biggest pension fund, ABP, and France’s Ircantec.

Kempen, Robeco, Candriam and BNP Paribas Asset Management have also introduced or extended tobacco bans this year. All four are signatories to the Tobacco-Free Finance initiative.

Separately, index provider MSCI has launched five new equity benchmarks excluding tobacco-related investments.

The Global Ex Tobacco Involvement indices do not include any tobacco producers, and also exclude “companies deriving 5% or more aggregate revenue from distribution, retail and supply of tobacco-related products”, MSCI said.

The five new benchmarks are:

  • MSCI ACWI ex Tobacco Involvement index
  • MSCI World ex Tobacco Involvement index
  • MSCI EAFE ex Tobacco Involvement index
  • MSCI Japan ex Tobacco Involvement index
  • MSCI Emerging Markets ex Tobacco Involvement index

“There is growing demand for exclusionary indices globally, including interest among the world’s largest pension and endowment funds for tobacco exclusion benchmarks,” said Deborah Yang, global head of ESG indices at MSCI.

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