French insurer AXA has said it plans to stop investing in the tobacco industry.
The decision has been made by the incoming Chief Executive Thomas Buberl who said: “The human cost of tobacco is tragic; its economic cost is huge.”
He admitted the decision would cost AXA but added “the case for divestment is clear”.
AXA said that tobacco kills six million people a year and that the figure is expected to rise to eight million by 2030, mostly in developing countries. The cost to society is greater than that of alcohol or obesity, the company added.
1.8 billion euros worth of assets
The company’s tobacco assets include 200 million euros worth of shares which will be sold immediately.
It plans to stop all new investments in tobacco industry corporate bonds and to run off its existing holdings worth about 1.6 billion euros.
AXA is not the first investor to axe tobacco, but it is believed to be the first global insurer to do so.
The Union for International Cancer Control called this a “milestone step in the right direction”.
#Cancer & #NCD community welcome
AXA</a>'s milestone announcement to divest €1.8B from <a href="https://twitter.com/hashtag/tobacco?src=hash">#tobacco</a> industry: <a href="https://t.co/m3dCXkqwS7">https://t.co/m3dCXkqwS7</a> <a href="https://twitter.com/hashtag/WHA69?src=hash">#WHA69</a></p>— UICC (uicc) May 22, 2016
The move comes as countries around the world are cracking down. Last week, new tobacco packaging laws went into effect in the European Union.
V_Andriukaitis</a>: new <a href="https://twitter.com/hashtag/Tobacco?src=hash">#Tobacco</a> Products Directive: Reducing number of lives lost&lasting legacy for EU public health <a href="https://t.co/4GQdAdeoD4">pic.twitter.com/4GQdAdeoD4</a></p>— European Commission (EU_Commission) 20 de maio de 2016