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Fighting the long fight against tobacco



The health risks of smoking are well-documented in the western world. It is a potentially deadly habit, dangerous not just to smokers but the people around them. However, in some countries the risks are not so well understood, and the wider tobacco industry has a much larger impact.

As the prevalence of smoking has declined in industrialised countries in northern and western Europe, North America and the western Pacific region, it has increased in countries in Asia, South America and Africa.

The industry sees the developing world as an opportunity. In 1990, an internal document from British American Tobacco (BAT), the second largest tobacco company in the world, assured its employees, “We should not be depressed simply because the total free world market appears to be declining. Within the total market, there are areas of strong growth, particularly in Asian and Africa… It is an exciting prospect.”

BAT – only one sample of an entire industry, remember – sells cigarettes in at least 38 African countries, and holds more than a 90% market share in many.

According to research by the World Health Organisation (WHO), 80% of the world’s 1.3 billion smokers now live in low and middle-income countries. WHO has accused tobacco companies of actively subverting and discrediting efforts to control tobacco use, particularly in these poorer countries, where marketing practices have been particularly aggressive.

This means that the burden of death will likely shift from the developed world to the developing world. It has been estimated that over the next two decades, 70-80% of deaths caused by tobacco smoking will occur in developing countries.

These nations will also have to bear not only the human costs, but also the social, environmental and economic costs of the tobacco industry, with nations and individuals paying for the treatment of smoking-related illnesses. Meanwhile many of the poorest smokers spend much of their income on tobacco, rather than essentials like food, healthcare and education.

Tobacco cultivation in poorer countries also has a negative impact. Of course, the more land that is used for growing tobacco, the less is available for food production. But this is not all.

Farmers are vulnerable to harmful illnesses such as a green tobacco sickness, a type of nicotine poisoning that comes from handling tobacco leaves. Tobacco companies have also been implicated in the use of child labour in the major tobacco producing countries including Argentina, Brazil, China, India, Indonesia, Malawi, and even the US.

Despite all this, tobacco is often lauded as a defensive stock for investors, as its sales are not really influenced by the strength of the economy or macroeconomic situations.

In the UK, local councils and pension funds have come under fire recently for investing in the tobacco sector, while simultaneously promoting public health and providing assistance to help local people quit smoking. Some funds have sought legal advice over this clash of interests.

Disregarding ethical issues for the moment, though, it is hard to see tobacco as a sustainable investment in the long-term. As consumption of cigarettes decreases in the developed world, tobacco companies’ profits have been supported by increasing sales in emerging markets.

However, Amanda Sandford, research manager at the anti-smoking charity ASH, explains that this success is unlikely to last. She says there are “very good signs” that developing nations will follow the example of developed ones in regulating smoking.

“We are seeing a bit of a turnaround, or at least a halt in what was an escalating situation in developing countries”, she says.

“But it does take time, of course, for these to be fully implemented, and at the same time of course the tobacco industry is still trying to fight and undermine these laws, wherever they can.”

With this uncertain future in mind, Simon Clements, sustainable and responsible investment (SRI) fund manager at Alliance Trust Investments, says that tobacco represents not just an unethical investment, but also an untenable one.

“Tobacco can offer good returns, but for long-term investors the question of the sustainability of these returns has to be questioned”, he says. 

This is driven by the fact they have a shrinking market; they can’t invest and they face stricter and stricter regulation.” 

Instead, he argues, investors can seek out companies and sectors that offer a genuine defensive earnings stream with a defensible competitive advantage, while enjoying growth driven by products that actually improve, rather than cut short, people’s lives.

The examples Clements uses are Kroton Educacional, a for-profit education firm that is one of the best performers on the Brazilian stockmarket, and Novo Nordisk, the global leader in the provision of insulin products.

He adds, “Both of these companies have performed as well as tobacco companies over time, and should also perform better in the future, given they do not face the same headwinds.” 

Investing in tobacco means you are profiting from suffering and supporting a damaging and exploitive industry. If it’s a steady financial return you’re after, it’s wise and moral to look at alternative, similarly defensive companies, rather than ones whose prosperity depends on addiction, a lack of education and poor public health, and whose core product leads to serious illness and, ultimately, death.

Further reading:

Describing tobacco as a ‘defensive stock’ is offensive

Council tobacco investments: incongruous and unethical

Tobacco: investing in death

Pension fund drops tobacco investment after poor results

British councils announce £44m investment in tobacco firms


New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
Shutterstock Licensed Photo - By Eviart /

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.


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How Going Green Can Save A Company Money



going green can save company money
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What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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