Tobacco: Reviewing the growing financial risks
Tobacco presents an array of health, ethical and social risks that are well-known and long- studied. This report, drawing on new academic analysis from Maastricht University School of Business and Economics*, demonstrates that declining returns and growing business threats present a clear and present financial risk for investors in tobacco.
This risk has become increasingly clear in 2018 with all major tobacco companies experiencing stark share price declines. While a number of stock market indices declined towards the end of 2018, tobacco stocks fell consistently through 2018 even as the broader market hit highs.
In this report we outline the range of pressures bearing down on the tobacco industry, including the implementation of the World Health Organisation Framework Convention on Tobacco Control (the UN Tobacco Control Treaty). We summarise recent research debunking the sin stock outperformance theory, as well as present a new study that analyses tobacco industry trends, future scenarios and tobacco company valuations linked to these scenarios.

*Research carried out by Professor Rob Bauer. Research assistants: Fabian Grohmann, Fabian Süßmann, Filip Dobrzynski, Jeroen Schmitz, Julian Alves and Moritz Dillmann. LINK
The tobacco industry is facing the most concerted, global and unfied effort to reduce and ultimately stamp out consumption of a product seen to date.

Download Our Toolkit
Tobacco Free Portfolios is a not-for-profit organisation with a mission to inform, prioritise and advance tobacco-free finance. We aim to disentangle the global finance sector from tobacco.
Our strategy is to engage with key leaders and influencers across the finance sector. We inform finance leaders about global tobacco control initiatives and the future risks of tobacco investment, and we encourage tobacco-free finance and investment mandates.
Our approach is one of advocacy and education. We pride ourselves on discretion and do not seek to accuse or ‘name and shame’ trustees, investors or the finance industry. Instead, we work collaboratively and professionally, so that the industry and its investors can make well-informed decisions.
Our work, including detailed information on tobacco-free finance, is explained in our Toolkit. Please download a copy here:
Tobacco kills more than 7 million people each year. More than 6 million of those deaths are the result of direct tobacco use while around 890 000 are the result of non-smokers being exposed to second-hand smoke.
How You Can Make A Difference
Through pension schemes, Sovereign Wealth funds, banks and insurers, many are still unknowingly contributing to what the World Health Organisation has described as the ‘global tobacco epidemic’. This means that people are unknowingly contributing to the world’s number one cause of preventable death.
Financial support of the tobacco industry stands in sharp contrast to global tobacco control initiatives, increased community awareness of the dangers of smoking and the on-going decline of tobacco smoking in developed countries.
You can make a difference by ensuring your finances are tobacco-free. You can write to your pension fund, bank or insurer and ask about their approach to tobacco.
Here’s a sample letter to use:


Globally the annual cost of tobacco is estimated at US $ 1 Trillion, global tax revenues are estimated to be US$269 Billion.
Our Progress
By working collaboratively with the world’s largest financial organisations, we have seen a dramatic shift in recent years with more than 80 leading financial organisations from more than 10 countries implementing tobacco-free finance policies – spanning lending, investment and insurance.
Recent tobacco-free decisions are in chronological order below.


Dr Bronwyn King, Dr Vera Louiza da Costa e Silva, Head of the Convention Secretariat of the World Health Organisation Framework Convention on Tobacco Control, Ms Clare Payne and Her Royal Highness Princess Dina Mired of Jordan, Global Ambassador for Tobacco Free Portfolios.
Insurers
- AXA: World’s largest insurer - May 2016 - 1.8B Euro of tobacco industry assets divested
- Medibank: Largest Australian health insurer - September 2016
- SCOR: French reinsurer - May 2017
- AVIVA: Largest UK insurer - June 2017
- Aegon N.V.: Dutch life insurance, pensions and asset management company - March 2018
- NN Group N.V.: Dutch insurance and asset management company - May 2018
Pension funds
- AP4: Swedish pension fund - September 2016
- CalPERS: USA Pension fund - December 2016 (tobacco-free policy extended to external fund managers)
- Australia Post Super Scheme: Australian pension fund - March 2017
- Australian Catholic Super: Australian pension fund - May 2017
- PME: Dutch Pension fund – May 2017
- PGB: Dutch pension fund - October 2017
- Telstra Super: Australian pension fund - October 2017
- OP Trust: Canadian pension fund - October 2017
- BT Super: Australian pension fund - November 2017
- Asgard Super: Australian pension fund - November 2017
- Guild Super: Australian pension fund - November 2017
- Child Care Super: Australian pension fund - November 2017
- Australian Super: Australian pension fund - December 2017
- Teachers Pension Fund (Lærernes): Danish – December 2017
- PenSam: Danish Pension Fund - December 2017
- TNO: Dutch Pension Fund – March 2017
- ABP: Dutch pension fund - January 2018
- Ircantec: French pension fund - January 2018
- Alm Brand Pension: Danish pension fund - January 2018
- Philips Pensioenfonds: Dutch Pension Fund - January 2018
- PWRI: Dutch Pension Fund – January 2018
- Mercer: Australian pension fund and wealth manager - February 2018
- Qantas Super: Australian Pension Fund – March 2018
- Keva: Finnish pension fund - June 2018
- SPOV: Dutch pension fund - June 2018
Sovereign Wealth Funds
- Fonds de Reserve pour les Retraites: France - December 2016
- Irish Sovereign Investment Fund: December 2016 (note that the NZ Superannuation Scheme went tobacco-free in 2006, the Norwegian Oil Fund in 2009 and the Australian Future Fund in 2013)
Banking
- ANZ – NZ branch: ceased investing in tobacco in 2016
- Bank of New Zealand: Ceased lending to and investing in tobacco in March 2017
- ABN-AMRO: Dutch Bank: Ceased lending to tobacco in June 2017
- Westpac Bank: Australian Bank: Ceased lending to tobacco in 2007 and extended tobacco-free policy across wealth management in November 2017
- Natixis: French Bank: Ceased lending to and investing in tobacco in December 2017
- BNP Paribas: French Bank: Ceased lending to, investment in and insurance of tobacco in November 2017. March 2018 announced that BNP Asset Management would implement a tobacco-free policy
- ING: Dutch Bank: Ceased lending to and investing in tobacco in April 2018
- ANZ: Ceased lending to tobacco in 2018
- In addition, Dutch Banks Rabobank and ASN have been tobacco-free for some years
- NB: Rabobank has not offered credit to tobacco companies for some years
Asset Managers
- Actiam
- Achmea
- AMP Capital: March 2017
- Alm Brand (Invest, Asset Management, Pension): Denmark: 2017
- Robeco: March 2018
Fund Managers
- AMP Capital: Australian Fund Manager - March 2017
- Russell Investments: Australia and New Zealand - May 2017
- BNP Paribas Asset Management - French Fund Manager - March 2018
- Robeco: Dutch Fund Manager - March 2018
- Kempen Capital Management: Dutch Asset Manager - July 2018
The Tobacco Free Portfolios team is engaged with Sovereign Wealth Funds, pension funds, large retail and investment institutions, banks, insurers and fund managers across the global finance sector and regularly presents at industry conferences and events.