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ABP under pressure over €1.5bn tobacco investments

Employees of the Netherlands’ university medical centres (UMC) have called for their pension fund, ABP, to stop investing in the tobacco industry.

https://www.ipe.com/countries/netherlands/abp-under-pressure-over-15bn-tobacco-investments/10019240.article

Jos Aartsen, chairman of the academic hospital UMC Groningen, spoke out during a conference entitled ‘Aiming for a smoke free health care sector’, organised by the Royal Dutch Medical Association earlier this week.

Aartsen complained that employees of academic hospitals as participants in ABP were effectively obliged to invest in the tobacco industry.

“I stand here on behalf of 70,000 employees of the eight UMCs. We are ashamed of these investments,” said Aartsen, quoted on the UMC Groningen website. “Investing in tobacco is not what we want.”

The Dutch Federation of University Medical Centers confirmed that all eight Dutch academic hospitals supported Aartsen’s call.

Aartsen acknowledged that tobacco companies can produce yields for investors.

“But every year, 20,000 people die unnecessarily because of smoking,” he added. “The fact these deaths are happening is more important than the return on investment in tobacco.”

Aartsen argued that it was a matter of social and governance responsibility for ABP to exclude tobacco.

Other funds had already excluded tobacco investments, he added, including healthcare pension fund PFZW and sector pension funds for GPs and for medical specialists.

ABP currently invests €1.5bn in tobacco-related assets, a spokesperson for the fund said. She pointed out that tobacco was legal in the Netherlands and regulated by the Dutch government.

The pension fund said it screened tobacco companies for issues involving child labour or unethical marketing practices. It also said it was in dialogue with several stakeholder organisations.

In addition, ABP was working on an “inclusion policy”, the spokesperson said. The next few years will see companies consciously chosen for the portfolio based on the criteria of return, risk, cost, sustainability, and accountability.

University medical centres are currently employer members of ABP, although there have been attempts to transfer this sector to PFZW, which caters for regular hospital staff.

A study by the Dutch Heart Foundation and the Association of Investors in Sustainable Development in March showed that more than two-thirds of pension funds didn’t have a policy in place for tobacco investments, compared to 10% of insurers.

It suggested the difference was attributable to the fact that many insurers also sell healthcare policies and have adjusted their investment policies accordingly.

The metalworkers pension scheme PME has excluded from its portfolio any companies that get more than 75% of their revenues from tobacco sales.

The €22bn multi-sector pension fund PGB is working on a similar policy, following a survey suggesting that just 17% of its participants supported tobacco investments.

PFZW ceased investing in cigarette manufacturers in 2013.

UK councils under pressure over £1bn of tobacco investments

Major investors set example to local authorities with commitment to selling shares in cigarette makers

https://www.theguardian.com/business/2017/may/31/uk-councils-under-pressure-over-1bn-of-tobacco-investments

Some of the world’s largest investment firms have thrown their weight behind efforts to combat smoking, sparking renewed calls for UK local authorities to divest all their shares in the tobacco industry from their pension fund investments.

More than 50 companies managing $3.8tn (£3tn) of money, including pension funds and insurers, declared support for “tobacco control measures being taken around the world” – even though some of them still own shares in tobacco businesses.

In a joint statement, released to coincide with World No Tobacco Day, they said: “We in the investment community are becoming increasingly aware of the important role we can play in helping to address the health and societal impacts of tobacco.”

The firms cited studies suggesting that smoking costs the global economy more than $1tn a year, outstripping global revenues from tobacco taxes.

Signatories of the statement include Axa – the French insurance firm that sold its entire €1.8bn (£1.6bn) tobacco portfolio last year – and Calpers, the giant US fund with nearly $300bn of assets under management. Calpers has also divested itself of all its tobacco investments.

While some large investors have sold tobacco holdings, funds managing the pension investments of UK local authority staff still own at least £1bn of tobacco stocks, according to analysis by the Guardian.

The share register of British American Tobacco (BAT), owner of Benson & Hedges and Lucky Strike, includes 28 local government schemes, which together own a combined £700m stake in the company.

The council with the largest investment in BAT is Hampshire county council, with about £81m of pensioners’ money invested in the firm. BAT has an office in Southampton, but ceased production of cigarettes at the site in 2007.

Nottinghamshire Local Government Pension Fund is second with about £62m worth of shares and is also among the largest investors in Imperial Brands, which makes Embassy and Superkings. Cigarettes were produced in Nottingham until May last year.

Imperial counts 19 local authorities among its shareholders, with their investments adding up to nearly £290m.

In total, share registers disclose that local authorities own close to £1bn of shares in the two companies. Their total tobacco investment is likely to be higher if they are invested in separate funds that also count cigarette companies among their portfolio of shares.

One of the obstacles to council pension funds selling tobacco stocks is a legal argument that trustees are obliged to prioritise the need to maximise investment returns over anything else.

But guidance issued by the Department for Communities and Local Government said trustees did have some room for manoeuvre.

“Although schemes should make the pursuit of a financial return their predominant concern, they may also take purely non-financial considerations into account provided that doing so would not involve significant risk of financial detriment to the scheme and where they have good reason to think that scheme members would support their decision.”

Deborah Arnott, chief executive of the health charity Ash (Action on Smoking and Health), said this left the door open for selling tobacco stocks.

“Historically, investment in tobacco was seen as safe, promising good returns, but increasingly fund managers are realising investing in tobacco is neither acceptable nor sustainable,” she said.

“Local authority pension funds have a legal duty to get the best deal for their pensioners, but if big investment funds like Axa can disinvest then surely local authorities, which have a legal duty to promote the health of local people, can do the same.”

Dr Bronwyn King, an oncologist who was instrumental in persuading Axa to drop its tobacco investments, said local governments should give serious thought to divesting, particularly given the cost to the public purse of smoking-related illness.

“We call on all government-related pension funds and sovereign wealth funds to look again at their policy,” she said.

“The health sector across the world is unified on tobacco but that alone won’t be enough. If the finance sector continues to invest in tobacco and strives to profit from it, we’re working against each other.”

The statement by investors calling for tighter tobacco control was issued at a conference in Paris to mark the annual no-tobacco day, started by the World Health Organization. WHO has estimated that tobacco claims more than 7 million lives each year.

Thomas Buberl, chief executive of Axa, was among the speakers at the event, a year on from the company’s decision to sell all its tobacco stakes.

“As the Axa group strives to be a partner in society, it is clear that action must be taken to combat the enormous human costs of tobacco,” said Buberl.

“I am convinced we must work together if we want to bring about change. Therefore, we are very proud to be working with other major financial actors and key stakeholders in support of governments to take action on tobacco control.”

House panel detains 6 Ilocos employees, orders Imee Marcos to appear in P66-M tobacco fund misuse probe

For refusing to answer questions during a congressional hearing on the alleged misuse of Ilocos Norte tobacco funds, six employees of the province’s Treasurer’s Office were cited in contempt and ordered detained at the House of Representatives on Monday, May 29.

http://www.interaksyon.com/house-panel-detains-6-ilocos-norte-employees-orders-imee-marcos-to-appear-in-p66-m-tobacco-fund-misuse-probe/

Ilocos Norte Governor Imee Marcos, who is being accused by Majority Floor Leader Rodolfo Fariñas of allegedly diverting P66.45 million in tobacco funds to buy motor vehicles, was also subpoenaed by the House Committee on Good Government and Public Accountability chaired by Surigao Del Sur Rep. Johnny Pimentel to appear in the next hearing after skipping two previous hearings.

Pedro Agacaoili, chairman of the office’s Bids and Awards Committee and head of the provincial and planning development office; Josephine Calajate, provincial treasurer; Edna Battulayan, accountant; provincial budget officer Evangeline Tabulog; and two other employees, Genedine Jambaro and Encarnacion Gaor, were brought to the House Sergeant-at-Arms’ office where they would be temporarily held.

During the inquiry on Monday, the six employees repeatedly told the House panel that they could not recall receiving millions in cash advances or authorizing the release of funds for the purchase of various vehicles.

Fariñas grilled the employees on the allegedly anomalous purchase of minicabs, buses, and trucks in 2011 and 2012 using the share of the province from tobacco funds.

The lawmaker chastised the employees for their allegedly “dismissive” answers and also warned that cases against them would pile up if they continue trying to get off the hook.

“Magpapalusot kayo, dadami lalo ang kaso n’yo,” said Fariñas.

According to Fariñas, the vehicles were purchased through cash advances from the province’s share from excise taxes derived from locally produced cigarettes or the special support fund under Republic Act No.7171 or the Act to Promote the Development of the Farmer in the Virgina Tobacco-Producing Provinces.

The lawmaker claimed the purchase of the vehicles had violated provisions of R.A. 7171 because the law mandates Virginia tobacco-producing provinces to use 15 percent of their share of excise taxes from locally produced cigarettes for projects that will help advance tobacco farmers’ self reliance through the establishment of cooperatives and livelihood, agro-industrial, and infrastructure projects.

Also, Fariñas claimed there was no public bidding in the purchase of the vehicles in violation of Republic Act 9814 or the Government Procurement Reform Act.

Marcos’ camp on Monday said the governor was on “medical sick leave.”

Fariñas and Marcos used to be allies under what was being pushed as the One Ilocos Norte bloc, but in 2015, they cut ties due to political differences.

Imee’s mother, Imelda Romualdez-Marcos, the former first lady and wife of the late president Ferdinand Marcos, represents the second district of Ilocos Norte. Fariñas represents the First District. Both officials are in their last terms in the House and will serve only until 2019.

How Trump Ally Myron Ebell Spread Misinformation for Big Tobacco and Big Oil

The former head of President Trump’s EPA transition team played a central role in the corporate-led attack on public perceptions about tobacco and climate change.

http://www.alternet.org/environment/how-trump-ally-myron-ebell-spread-misinformation-big-tobacco-and-big-oil

“Frontiers will [change] the debate from one about teenage smoking and industry practices to one about massive tax increases, bigger government and loss of individual freedom.” — Frontiers of Freedom funding proposal to Philip Morris

When Phillip Morris didn’t like new FDA regulations that targeted cigarette sales to children and teens, Myron Ebell—who recently served as the head of President Trump’s EPA transition team—was there to “change the debate” to fit the tobacco giant’s agenda.

The FDA’s proposed regulations included prohibiting outdoor advertising of any tobacco products near schools or playgrounds, strictly regulating labeling and prohibiting tobacco company sponsorships of public events. To fight the new restrictions, tobacco-industry-funded Frontiers for Freedom started a campaign to cast doubt on the validity of the new regulations.

Frontiers, a conservative “educational foundation,” hired Ebell as policy director to help run the campaign, even using his name to raise money for the project. In a fundraising letter to Philip Morris in 1998, Frontiers highlighted Ebell as an example of why more funding was needed to run an organized push to make regulating the tobacco industry “politically unpalatable.”

The Frontiers campaign was pure spin. The tobacco companies’ First Amendment rights were being trampled on, it claimed—more Big Government overreach. From pushing the dubious claim that rules infringed on smokers’ and tobacco companies’ rights to blaming smokers themselves, Ebell oversaw Frontier’s tobacco-industry-funded drive to fight regulation. It took a fourteen-year battle for Congress to pass the regulations and make them stick. In the end, the tobacco advertising regulations made significant progress in curbing teen smoking. No thanks to Ebell and Frontiers for Freedom.

In April of 1998, Ebell and a handful of other marketing experts sat around a table with some of the largest U.S. fossil fuel companies to discuss a plan for a similar attack on climate science. Representatives from Exxon, Chevron, utility giant Southern Company and the American Petroleum Institute worked with operatives from established conservative think tanks and public relations wonks to draft a program designed to attack public and political perceptions about climate change. They dubbed it “The Global Climate Science Communications Plan.”

The plan’s strategy was similar to Frontier’s anti-regulation tobacco campaign. This time the goal was to make climate-change-related regulation politically unpalatable.

The foundation of the plan was to sow doubt about the scientific validity of action on climate change, even though in 1998 the science was already solid. Of the ninety-six papers published on global warming that year, just one disagreed about man’s activities driving warming. That truth about the state of the science was replaced with a push to convince “a majority of the American public” that “significant uncertainties exist in climate science.”

The seven-page directive boldly stated that “victory will be achieved when” the uncertainties about climate science are part of “common knowledge,” when media recognizes and covers those uncertainties and when those promoting action on climate science appear out of touch.

Strategies and tactics of the plan included:

• Recruit and train a team of scientists for media outreach
• Produce a steady stream of op-eds written by these scientists
• Organize and teach conservative grassroots groups
• Become a one-stop-shop for members of Congress, state leaders and teachers looking for information about climate change
• Distribute materials directly to schools and convince a national TV journalist to produce a TV program outlining the supposed uncertainties

It worked.

In 2007, television journalist John Stossel did a bang-up job promoting climate confusion with his special, “Myths, Lies and Downright Stupidity,” for a special edition of “20/20.” By 2016, a Pew poll found only 9 percent of conservative Republicans believed that climate research reflects the best available evidence, while 57 percent of that same group felt that climate research is influenced not by valid science, but by scientists’ desire to advance their careers.

In 1999, Ebell moved to Competitive Enterprise Institute, a libertarian think tank funded by many of the same oil companies he’d sat around the table with the year before to hatch the plan to misinform the American public. From 1998 to 2005, ExxonMobil provided CEI with over $2 million dollars of funding. As director of CEI’s Center for Energy and Environment, Ebell put the plan to work.

Impacting the voice of elected officials was another key aspect of “victory” named in the 1998 disinformation plan. By that measure success was swift in coming. Just two years after the plan was hatched, CEI joined with conservative Senator James Inhofe as co-plaintiff in a lawsuit over the National Assessment, a federal report on climate change’s impacts on the United State.

The lawsuit was designed to suppress publication and distribution of recent climate science findings. In 2003, CEI sued the U.S. government directly, demanding the National Assessment not be disseminated. In 2005, Senator Inhofe joined with Ebell and other climate science deniers on a speaker’s panel for a CEI panel to discuss the Future of International and U.S. Climate Policy. By 2012, Ebell was bragging on his blog about Inhofe’s legislation to block EPA regulations. It was a victory: Climate-change-related regulation had become politically unpalatable.

Opposition to the validity of climate science skyrocketed among conservative politicians after 1998. Fighting all government action on global warming is now a bullet point on the GOP’s purity test. Over that same period, oil industry financial support for political campaigns and lobbying efforts have overwhelmingly gone to Republicans.

The election of Donald Trump was icing on the climate science denial cake. Ebell was tapped to head Trump’s EPA transition team. Eighteen years of work deceiving the public finally paid off for Ebell. His dream of drastically reducing the power of the EPA is being realized. Ebell headed Trump’s EPA transition team. He oversaw the writing of a policy paper—not available to the public—that will steer fellow climate science denier and EPA antagonist-turned-EPA head Scott Pruitt. Under Pruitt’s leadership, climate-change-related regulations will be rolled back and the EPA’s budget will be cut by 24percent.

Ebell has no background in science. He studied philosophy and has a master’s degree in political theory. His understanding of modern climate science sounds like this:

The models say that much of the warming will occur in the upper latitudes and in the winter. At the risk of further ridicule in kooky blogs in England, where global warming alarmism is now a religion, that sounds pretty good to me. Fewer people will die from the cold.

Fossil fuel industries got what they wanted. Conservative politicians got what they wanted. CEI got what it wanted. Ebell got what he wanted. All at the expense of the environment, public health and the stability of future generations.

Hope Forpeace is a short film producer with AK Productions. She spoke before the EPA’s Scientific Advisory in 2015 and coordinated the effort to have EPA’s fracking study include known cases of water contamination. She has traveled across the country for several years investigating cases of fracking-related pollution.

$127 Billion Australian Manager Dumps Tobacco, Weapons Investing

Australia’s largest publicly traded wealth manager is ditching stock and debt investments in companies with ties to tobacco, cluster munitions and land mines, in the latest push for ethical investing in the nation.

AMP Capital Investors, the investment management arm of AMP Ltd., is dumping about A$440 million ($338 million) worth of investments in tobacco manufacturing-related companies and about A$130 million in land mine and cluster munition manufacturers. The moves come as AMP Capital rolls out a new decision- making framework across its A$165 billion investment portfolio, the wealth manager said in a March 16 statement.

“We are not prepared to deliver investment returns to customers at any cost to society,” AMP Capital Chief Executive Officer Adam Tindall said in the statement. “AMP Capital has a long-term focus on responsible investing supported by an integrated approach to considering ESG factors across all asset classes.”

Growing Demand

The money manager’s decision comes amid burgeoning demand for ethical investments in Australia’s A$2.2 trillion retirement savings pool. Assets at funds that screen out investments that don’t meet ethical investing criteria grew by 16 percent to A$24.7 billion in 2015-16, according to the Responsible Investment Association Australasia.

AMP, which also controls insurance and banking businesses Down Under, will implement a new framework that considers harm as well as “denial of humanity” when determining investment decisions. Tobacco manufacturers were culled under the framework because their products were addictive, while cluster munitions and biological weapons would “indiscriminately kill through normal use,” the company said.

The sales of the stakes will occur progressively throughout 2017, AMP said in the statement. The company engaged the help of consulting group, The Ethics Centre, to create its ethical investing framework, according to the statement.

“AMP Capital still firmly believes in company engagement in order to effect meaningful change,” Tindall said. “In the case of tobacco, cluster munitions, land mines, biological and chemical weapons manufacturers, however, no engagement can override the inherent dangers involved with their products.”

Can we trust Big Tobacco to promote public health?

There’s a new catchcry in public health: people working in tobacco control should join with Big Tobacco to promote “safer” tobacco products.

http://www.econotimes.com/Can-we-trust-Big-Tobacco-to-promote-public-health-588041

It runs like this: before starting work each morning, tobacco company employees sing with gusto the company song “Thank you, thank you, addictive nicotine”. But they really hate the small problem that smoking kills around two in three of its long-term users early. Just think of all the lost revenue from those collective millions of smokers who die an early death.

So for decades tobacco companies have been busy trying to get their chemists and engineers to develop “safer” (ie less dangerous) products, e-cigarettes being the latest kid on the block.

The public health community has always seen the tobacco industry as the largest vector for lung cancer and all the other diseases caused and exacerbated by smoking. This is why the World Health Organization’s Framework Convention on Tobacco Control – now ratified by every country in the world except Cuba, Haiti, Argentina, Mozambique, Switzerland (headquarters to Philip Morris International) and the US – has a whole section (Article 5.3) detailing how governments should work to combat tobacco industry interference in tobacco control. I contributed a background document on the many ways the tobacco industry tries to gut tobacco control at every turn.

Shifting the focus

The new catchcry proposes Big Tobacco really, really wants to stop selling its deadly products and have all its smokers, in time, switch over to its we-are-not-yet-sure-how-much-but-probably-less-deadly products.

It emphasises the only real goal tobacco control should have is to reduce disease caused by using tobacco products. And guess what? This now turns out to be a shared goal: Big Tobacco and public health both want the same thing so they should forget all the mistrust and animosity of the past, welcome the industry to the table, invite them to conferences, share data and embrace them as partners.

Unfortunately, the catchcry is profoundly myopic. No, let’s not muck around. It displays weapons-grade naivety and ignorance in those promoting it, as this opinion piece shows.

Has Big Tobacco really changed?

Here is why the “they’ve changed” argument about Big Tobacco hits the rocks.

Can anyone name a single example of any Big Tobacco company taking its foot off the accelerator of aggressive opposition to any policy that promises to effectively reduce its core mission: selling more cigarettes?

Philip Morris tried and failed recently in a legal case to gut Uruguay’s tough, comprehensive tobacco control program. The company was doubtless attempting to bully a minnow nation into submission, to send a loud message to any other small nation silly enough to get ahead of itself with such policies.

All tobacco companies fight with all they have to stop tax rises. Just go to British American Tobacco (BAT) Australia’s twitter feed, where tweets about illicit tobacco feature heavily. Here’s an example:

Capture

But why is BAT so obsessed with illicit tobacco? The company is trying to get public brownie points by showing it’s concerned about tax lost to illicit trade. Its main agenda is it wants the government to stop raising tobacco tax. It knows that a tax-reduced lower prices will increase tobacco sales like nothing else, particularly to low income groups like the poor and kids. Tax is the single most effective policy in reducing use, which is why Big Tobacco gives such priority in its lobbying to trying to defeat tax rises.

All the main transnationals poured millions into trying (and failing) to stop Australia’s pioneering plain packaging legislation. Go figure why they tried that.

And as recently as December 2016, BAT wrote this appalling letter to the Hong Kong administration trying to stop graphic health warnings going ahead. This was from a company which, published in its 2016 financial results statement a call to “champion informed consumer choice”.

Informed, yes, but please we don’t want smokers to see pictures of what smoking does to you and be THAT informed.

Big Tobacco would love its new generation products to sell well. But down the corridor from its harm reduction division are its cigarettes, financial and executive divisions that know which side the corporate butter is spread thickest. The only possible conclusion is Big Tobacco’s goal with reduced risk products is not to cannibalise its own core product, but to try and promote dual use (cigarettes and e-cigarettes): “smoke when you can, and vape when you can’t”.

Cigarettes still core business

Three of the world’s biggest tobacco transnational companies have very recently affirmed that cigarettes will remain their “core” business.

Philip Morris says:

…cigarettes, our core product.

Imperial says:

Our core business is built around a tobacco portfolio…

BAT says:

Tobacco will be a core part of our business for many years.

BAT chief executive officer, Nicandro Durante said recently the company expects to continue to boost sales of traditional cigarettes in several key markets, pointing to (paywall) the fastest growing areas:

Places like Vietnam, the Philippines, and Indonesia — there are many opportunities out there.

He added that BAT derives more than half of its total revenues from emerging markets.

No firewall between ‘good’ and ‘bad’

The Royal College of Physicians of London wrote recently (p188):

There is no firewall between a “good” tobacco industry that is marketing harm-reduction products in the UK and a “bad” one that promotes smoking, or undermines tobacco control activities, in low- and middle-income countries.

It’s report continued:

Tobacco companies make their money by selling tobacco, and the industry’s recent programme of investment and acquisitions in e-cigarettes perhaps indicates recognition that these products represent a disruptive technology that should be harnessed to protect the core business of selling tobacco, exploited to expand tobacco markets or developed as an opportunity to make nicotine products attractive to non-smokers. There is little likelihood that the industry sees e-cigarettes as a route out of the tobacco business, but it is highly likely that e-cigarettes will be exploited to enhance claims of corporate social responsibility, and to undermine implementation of Article 5.3 of the World Health Organization Framework Convention on Tobacco Control.

Those who believe the tobacco companies are born-again public health angels with the advent of e-cigarettes have little to say about Big Tobacco’s business as usual with cigarettes. It’s a bit like arguing that we should pat a mafia boss on the back for donating a few hundred thousand dollars to a drug rehabilitation clinic while it’s business as usual during the rest of his week.

ILO urged to cut links with tobacco industry

THE Southeast Asia Tobacco Control Alliance (SEATCA) has called upon the International Labour Organisation (ILO) to end its ties with the tobacco industry.

http://www.nationmultimedia.com/news/breakingnews/30308555

For many years the ILO has had a close working relationship with the global tobacco industry through its public-private partnership programme, the anti-tobacco group says. The ILO’s policy on collaboration with the tobacco industry has been on the agenda of the 328th session of the governing body this week.

The ILO is a member of the UN Interagency Task Force (UNIATF) on Prevention and Control of NCDs, which adopted a draft model policy last year for preventing tobacco industry interference among UN agencies.

SEATCA said this policy states: “UNIATF should reject partnerships, joint programmes, non-binding or non-enforceable agreements and any other voluntary relationships with the tobacco industry.”

Mary Assunta, senior policy adviser of SEATCA, said: “The time has come for the ILO to end its ties with the tobacco industry. ILO’s reference document for its governing body is skewed with songs of praise for the work with the tobacco industry.”

“This is not surprising because transnational tobacco companies have been financially supporting some of the work of the ILO particularly in addressing child labour in tobacco growing.

“About 80 per cent of the 1.2 billion smokers live in poor and middle-income countries. The global tobacco industry is focused on increasing its profits from these parts of the world since smoking is declining in the high-income countries.”

The ILO estimates there are about 60 million people involved in tobacco growing and leaf processing worldwide. However, it offers no data on the number of children working in this industry. In fact the ILO says shifts in tobacco production to the developing world may have resulted in increased child labour.

The ILO has $15 million from Japan Tobacco International and another tobacco industry-funded NGO, the Eliminating Child Labour in Tobacco Growing Foundation.

Assunta said it appears the ILO has completely missed the point on how the tobacco industry benefits from child labour.

“It should be clear to the ILO the many years of collaboration with the industry have not eliminated child labour,” Assunta said.

“The ILO should not allow their decision to be coloured by the paltry $15 million. The governing body must put itself above tainted funds and choose the policy to end ties with the tobacco industry as recommended in the model policy of the UNIATF.”

MPs investing in cigarette companies, oil giants and ‘tax avoiders’ through their pension scheme

Exclusive: The Parliamentary Contributory Pension Fund also invests in several US tech giants accused by MPs themselves of avoiding tax

http://www.independent.co.uk/news/uk/politics/mps-pension-scheme-investment-tobacco-cigarette-bat-fossil-fuels-tax-avoidance-a7607901.html

Pensions paid to British MPs are funded by the profits of cigarette companies, international oil giants and companies who MPs themselves have accused of avoiding tax, The Independent can reveal.

The Parliamentary Contributory Pension Fund (PCPF), whose investments have never been made public before, ploughed more money into British American Tobacco (BAT) and oil giant BP and than any other two companies over the past year. Millions of pounds were also put into oil company Shell and controversial mining firm Rio Tinto, the list of investments shows.

The figures show BAT and BP received roughly £5.59m in investment each from MPs in 2016.

Pension funds, which channel billions of pounds to all corners of the economy, have come under pressure from campaigners to stop profiting from industries that contribute towards environmental disaster, ill health and conflict.

The £621m MP pension fund’s top 20 holdings also includes three US tech companies – Amazon, Google and Apple – that have been accused by MPs themselves of avoiding tax. Another top 20 investment is WPP, the advertising giant at the centre of a 2012 shareholder revolt on the £12.93m pay packet for its CEO Martin Sorrell.

Green MP and party co-leader Caroline Lucas, who has been pressuring the fund to reveal what it invests in for years, said the investment strategy was “deeply questionable” and that that in the case of tobacco investments there was “no excuse” for profiting from “one of the greatest public health crises of our time”.

“After years of resistance, the Parliamentary Contributory Pension Fund has finally come clean and made public their top 20 holdings. This is a good first step but, as expected, the fund has a deeply questionable investment strategy investing in dirty energy and tobacco,” she told The Independent.

“The long-term financial risks associated with oil, coal and gas assets are well known, yet the trustees of the PCPF are refusing to even meet with fund members to discuss this issue.

“If we are to prevent the worst of climate change, then we must rapidly transition away from an economy run on fossil fuels by investing in the renewable energy that we have in abundance. It’s right that the MPs should lead the way on this transition.

“It is well within the scope of the fiduciary duty of pension fund trustees to account for non-financial factors – there is therefore no excuse for profiting from tobacco, an industry that is responsible for one of the greatest public health crises of our time.”

In 2014, former MP Brian Donohoe, chair of the fund’s trustee board, said tobacco investments would be “amoral” but that he did not think the fund should withdraw from investments in fossil fuels.

Health charity Ash told The Independent the revelations about tobacco investments were disturbing because they were fuelling “so much preventable illness and misery”.

“A large majority of MPs and peers understand the terrible damage that smoking does and support strong action to cut smoking rates,” said Deborah Arnott, the charity’s chief executive.

“I think they will be disturbed to see that the parliamentary pension fund is investing in an industry whose products still kill more than 100,000 people across the UK every year.

“I understand that fund trustees have a duty to get a good return from their investments, but this can be achieved without supporting an industry that causes so much preventable illness and misery.”

A number of local councils, which manage more than £230bn in pension fund investments, have led the way in divesting from fossil fuels and in imposing ethical investment policies. Authorities including Oxford City Council, Waltham Forest, and South Yorkshire have been among the first to move to divest from fossil fuels. The PCPF’s trustees, however, say it would not be lawful for them to make sweeping judgments about whether certain investments were ethical or not.

The Church of England has previously come under fire for investing in Google and said it would limit investments in fossil fuel producers.

The MP fund’s top investments as of March 2016 were £55m in UK government bonds; £5.9m in British American Tobacco; £5.9m in BP; and £4.9m apiece in Diageo, Vodafone, HSBC, Royal Dutch Shell and Reckitt Benckiser.

It also invests £3.7m in pharmaceutical company GSK; £3.1m apiece in US Treasury bonds, Lloyds Bank, and Nestle; and £2.5m in BT, JP Morgan Chase, and Google. Rio Tinto, Apple, Amazon, Hartford Financial Services and WPP net around £1.9m each from the fund. The remaining 80 per cent of the fund is invested in other smaller holdings.

ShareAction, which campaigns for responsible investments, told The Independent that the new information showed MPs like Ms Lucas were “fully justified” in their campaign to challenge the fund.

“It’s positive to see greater disclosure from the PCPF following a year of vigorous efforts by MPs to demand a more transparent approach from their scheme,” said Catherine Howarth, the group’s chief executive.

“Many MPs will be dispirited to learn that the scheme’s largest holdings are tobacco giant, BAT, and troubled oil giant, BP. In the week NEST revealed plans for a low-carbon global equities strategy, having outperformed the PCPF’s investment returns in the year gone, it would seem MPs are fully justified in challenging their trustees for answers on carbon and climate risk.”

It is understood that a group of MPs opposed to such investments are considering legal action against the pension fund if policies are not changed.

When approached for comment, the pension fund’s secretariat referred The Independent to the House of Commons media office. The media office provided a copy of the fund’s policy statement on ethical investing, which has been signed off by the board of trustees.

It says that “trustees [of the fund] are legally unable to exclude certain investments on ethical grounds” because “the rage of views” among its members means it would be “almost impossible for the trustees to conclude that scheme members would share a moral viewpoint on any one ethical issue”.

“This means that the trustees could not lawfully take a decision to exclude a certain type of investment from the PCPF’s investment portfolio on ethical grounds,” the policy statement continues.

“However, it is important to mention that the trustees do believe that environmental, social and corporate governance issues can have a material impact on the long-term performance of its investments.

“As such the fund is a signatory to the Financial Reporting Council’s Stewardship Code and as such expects its investment managers to take account of ESG considerations as part of their investment analysis and decision making process. Furthermore, the Trustees, and all of the Fund’s managers are also signatories to the FRC Stewardship Code.”

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Of Course Trump’s Health Secretary Is a Friend of Big Tobacco

Tom Price has taken tobacco money and voted against rules on cigarettes.

http://www.motherjones.com/politics/2017/02/tom-price-hhs-tobacco

The man Donald Trump has chosen to direct health policy for the federal government has close ties to the tobacco industry he will soon be charged with regulating. Rep. Tom Price (R-Ga.), who will likely be confirmed as health and human services secretary by the end of the week, has repeatedly voted against bills that could harm big tobacco. At the same time, he’s received thousands of dollars in political contributions from the industry and held investments in tobacco companies—investments he says he didn’t know about.

Early in Barack Obama’s presidency, Congress renewed the State Children’s Health Insurance Program. In order to pay for the program, lawmakers raised cigarette taxes by 62 cents per pack and cigar taxes by 40 cents per cigar. Price blasted the new fees. “Today’s tax hike serves as a useful reminder that the president is comfortable raising taxes on hard-working Americans to feed his reckless agenda,” Price said in an April 2009 statement. “President Obama has done nothing to demonstrate that he is a responsible steward of taxpayer money. Yet, he is forcing the American people to burn through even more of their income in the name of more government.”

A few months later, Congress passed the Family Smoking Prevention and Tobacco Control Act, which empowered the Food and Drug Administration regulate tobacco products. (The Supreme Court had ruled in 2000 that the FDA did not have that authority under existing law.) The legislation has enabled the agency to ban certain flavored cigarettes that might entice young people to begin smoking. It also allows the FDA to require additional warnings on packages.

“How do you square reaping personal financial gain from the sales of an addictive product that kills millions of Americans every decade with also voting against measures to reduce the death toll inflicted by tobacco?”

Price joined most Republicans in voting against the FDA legislation. But thanks to that bill, as health secretary, he will now have immense influence over how the tobacco industry operates. (The FDA is part of the Department of Health and Human Services.) In 2011, the Obama administration proposed adding graphic warning labels—including images of diseased mouths and lungs—to the top half of cigarette packs. That regulation was tied up in legal challenges but was ultimately upheld by the Supreme Court in 2013. After several years of inaction by the administration, a collection of medical and public health groups, including the American Cancer Society, sued the government last fall in an attempt to force it to finalize the new label requirements. Once he’s in place at HHS, Price can ask the FDA to move forward with the new rules, weaken them, or abandon them altogether.

The conservative website Hot Air celebrated the latter possibility when Price’s nomination was announced in November. “Fortunately for all of us, most of the sore spots on the HHS and FDA regulatory front don’t require cooperation from Congress or the courts,” the site said, pointing to regulations on cigars and electronic cigarettes. “These are things which can essentially be tidied up with a stroke of the pen once Trump and Price are in office.”

Price has benefited from numerous tobacco industry donations during his political career. Back when he was a state legislator in Georgia in 1998, Philip Morris gave Price’s campaign $300. More recently, the PAC for Altria Group, parent company to Philip Morris, donated $18,000 to Price’s congressional campaigns. From 2008 to 2012, Price also received $19,000 from the PAC of RJ Reynolds, the company behind Camel and other cigarette brands.

Price’s office did not respond to a request for comment.

Sen. Al Franken (D-Minn) raised concerns about Price’s personal investments in tobacco companies during his confirmation hearing last month. According to Price’s financial disclosure forms, he sold off 768 shares in Altria and Philip Morris International for $37,000 in 2012. (Altria owns the American Phillip Morris brand. Phillip Morris International has been a separate company since 2008.) Franken started by asking Price to identify the “leading cause of preventable death” and then informed him that it was smoking.

“That hits home,” Price replied. “I lost my dad, who was a Lucky Strike smoker from World War II, to emphysema. He prided himself on the fact that he never smoked a cigarette with a filter for years and years.”

Franken expressed surprise that Price, a physician, would invest in products that lead to the deaths of about 480,000 people in the country each year. “Congressman Price, you’re a physician, which means you took the Hippocratic oath, a pledge to do no harm,” Franken said. “How do you square reaping personal financial gain from the sales of an addictive product that kills millions of Americans every decade with also voting against measures to reduce the death toll inflicted by tobacco?”

“It’s a curious observation,” Price responded, claiming that he had “no idea” about the stocks he owned; he suggested that they were purchased by a mutual fund or pension plan he had invested in. The tobacco investments were publicly disclosed in his financial report, and at other points in his hearing he acknowledged that he had the ability to direct his stock broker on other investments he held.

“I find it very hard to believe that you did not know that you had tobacco stocks,” Franken responded.