Leading insurance company, Axa, is to stop investing in the tobacco industry. The French insurer has a staggering €1.7 billion investment in the industry, but it has announced it will sell its shares and let its bonds run off. The move comes just days after mandatory plain packaging for cigarettes was introduced across the UK.
The human cost of tobacco is devastating. The World Health Organisation (WHO) have estimated that eight million people a year will die from smoking-related diseases by 2030.
As a major health insurer, Axa felt the move to pull out of the tobacco industry was only right to reflect their philosophy. A year ago Axa became one of the first big groups to announce it would sell its €500 million of coal investments before the Paris Climate Agreement Summit.
Thomas Buberl, who takes over as Chief Executive of Axa in September, told the Financial Times: “With this divestment from tobacco we are doing our share to support the efforts of governments around the world. This decision has a cost for us but the case for divestment is clear: the human cost of tobacco is tragic, the economic cost is huge.”
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The Norwegian oil fund and US public sector pension groups Calpers and Calstrs, stopped investing in the tobacco industry years ago, but commitment is wavering. After potentially missing out on $3 billion of returns since dropping the tobacco industry in 2000, Calpers is considering reinvesting.