Tobacco causes an estimated 7 million deaths per year globally, contributing to the early death of two out of three smokers. In terms of human health, there is no safe level of exposure to tobacco.
From an investment perspective, major class actions against tobacco companies pose financial risk. And whereas VicSuper typically has a preference for using company engagement to affect change rather than divesting, in the case of tobacco manufacturers, engagement is very unlikely to be successful.
What are we doing to exclude tobacco from our investments?
A number of years ago, VicSuper’s Board resolved to divest the Fund of tobacco manufacturing stocks. Since then we have worked to have tobacco industry sector exclusions incorporated into contractual agreements with our investment managers. We also monitor the investment portfolio on a quarterly basis for any accidental exposure to tobacco and, if identified, take steps to exclude relevant companies. In recognition of these steps, VicSuper was recently recognised by the Tobacco Free Portfolio Initiatives as “Verified Tobacco Free”.
- In the limited cases where VicSuper invests in pooled trusts, exclusion of tobacco manufacturing is on a best-endeavours basis, due to cost and implementation difficulties.