Axa, which has a large health insurance arm, said it will let its €1.6bn of bonds runoff and sell its €184m of tobacco shares straightaway.
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The Axa spokeswoman declined to say which tobacco companies’ stocks and bonds it owned, but said the holdings were longstanding and a small part of its general accounts.
This announcement coincides with the annual World Health Assembly in Geneva and the introduction of plain cigarette packaging in the UK.
Over the past five years the share prices of Imperial Brands and British American Tobacco (BAT) have risen 69 per cent and 51 per cent respectively, ahead of the FTSE All Share index total return of 28 per cent.
A major United States pension fund, CalPERS, has shunned tobacco investments since 2001, but recent news reports said it is reconsidering this policy after calculating the cost in lost income at some $3.0 billion.
The world’s largest insurer is ditching tobacco assets worth $2 billion, saying it can’t continue to invest in an industry that kills six million people per year.
Axa is not the first investor to ditch tobacco, though a spokeswoman said she believed it was the first global insurer to do so. It also mentioned that portfolio managers have access to a RI search tool, which provides “access to detailed environmental, social and governance analysis allowing them to data mine and to isolate specific “risks” such as tobacco or carbon, as well as aggregated ESG risks”.
Axa, second in Europe only to German giant Allianz, said as a major investor it wanted to be “part of the solution, and our hope is that others in our industry will do the same”.
Nine other institutional investors were asked to comment on whether they plan to dump tobacco investments.
AXA said it would divest its 200 million euros of equity holdings in tobacco companies immediately.
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Tobacco kills around 6 million people each year – more than 5 million smokers and more than 600,000 non-smokers who are exposed to smoke, according to the World Health Organization.
