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April 4th, 2013:

ASH Australia invest* tobacco compan* tobacco industry government super fund*

Ending government and super fund
investment in tobacco

ASH, ACOSH and partners are working to end investments in tobacco companies by Federal, State and Territory government investment funds and by major superannuation and other funds.

THE CASE FOR TOBACCO DIVESTMENT … and counter-arguments

including ASH factsheet        TAKE ACTION

Why we should end investment in tobacco
2p factsheet


Global noose tightens on big tobacco
March 2013:  Laws and regulations tighten on the tobacco industry worldwide, not just in wealthier countries. Wall St analyst weighs the industry’s shaky future. Tobacco Unfiltered 15/3/13

SunSuper divests from tobacco
March 2013: Another superannuation fund, SunSuper, will divest its $54m tobacco stocks after a regular investment review. ASH comment in  Ethical Investor 26/3/13 – and see who else has divested


Why shouldn’t Australian governments and funds
invest in tobacco companies?

1.    Investing in tobacco is contrary to the National Tobacco Strategy 2012-18.
This strategy, agreed to by all nine Australian Federal, State and Territory governments, commits them to implement the FCTC treaty article on preventing tobacco industry interference – including not investing in tobacco. NTS 2012-18 pp. 14-15; FCTC Art. 5.3 guidelines

  1. 2. Investing in tobacco is against the public interest.
    World Health Organization points to “irreconcilable conflict of interest” between the tobacco industry and public health. Tobacco is a uniquely harmful, addictive product, world’s No.1 single preventable cause of disease – annual death toll 5m+ including 15,000+ Australians.

    1. Investing in tobacco is socially irresponsible.
      The tobacco industry has aggressively undermined tobacco control strategies for decades worldwide, with a history of illegal activities and using deceptive and misleading conduct and targeting children. It contributes significantly to poverty and disease worldwide, undermining health policies, aid efforts.
  2. Investing in tobacco undermines Australian treaty commitments.
    Australia as one of 170+ Parties to WHO Framework Convention on Tobacco Control has legal obligations to protect health policies from tobacco industry interference. Article 5.3 Guidelines state “Government institutions and their bodies should not have any financial interest in the tobacco industry, unless they are responsible for managing a Party’s ownership interest in a State-owned tobacco industry” (4.7).  FCTC Article 5.3 guidelines
  3. Responsible investment is good business.
    Morningstar reports Australian share funds investing ethically produced 4.65% average annual return in 5 years to July 31, 2010, against 4.21% for mainstream share options. Superannuation researcher SuperRatings says super funds’ ”sustainable” Australian share options have outperformed mainstream Australian share options over past five years. Responsible Investment Association Australasia reports: “Responsible investment is now commonly considered to be ‘best practice’ as consideration of ESG [Environmental, Social, Governance] factors is seen to assist in the management of investment risks.”
    Ethical investment performance discussed further in Morningstar video 15/10/12
  4. Divesting in tobacco has community and investor support.
    2007 Australian survey of  800+ current pension fund members showed two-thirds objected to their funds being invested in an industry seen as unethical, promoting ill health.  Survey

7.  It’s part of a worldwide trend.
Government funds in Norway, NZ, five US states and several Australian superannuation and other funds have already screened out tobacco investment – citing concerns about treaty commitments and tobacco’s litigation risks and uncertain regulatory future.

8.  Investing in tobacco undermines Environmental, Social and Governance principles. TOBACCO INDUSTRY’S RECORD on ESG

Common arguments for investing in tobacco

1. “It’s a legal product.”
Although promoted by the industry as a “legal” product (and therefore investment), it’s a unique product in killing half its long-term users when used as intended. Tobacco and other legal products have been excluded from investment options because of treaty conflict or social irresponsibility. The tobacco industry has a long history of illegal, deceitful conduct.

2. “A fund’s duty is to its investors”
The duty of an investment fund is to maximise returns for its members/investors – subject to their directions and in line with best practice. Long-term best interests may not be consistent with short-term return. Funds are right to consider concerns about investing in tobacco – conflicts with treaty obligations, conflicts of interest, litigation liabilities, and the industry’s uncertain regulatory future.

3. “Funds should be independent, free of political interference.”
Funds properly follow guidance from their investors (government or members) as to best practice, including complying with ESG principles and/or treaty obligations. Tobacco should not be singled out for exemption from such guidance.

4. “Tobacco is a good investment”
The tobacco industry has been described as “a sunset industry”, its long-term future in doubt. UniSuper has screened tobacco out of its its investment options because “long tail litigation liabilities and uncertain regulatory future…. presented investment risks which warranted the exclusion of tobacco stocks.” UniSuper FAQs


SunSuper divests from tobacco
March 2013: Another superannuation fund, SunSuper, will divest its $54m tobacco stocks after a regular investment review. ASH comment in  Ethical Investor 26/3/13 – and see who else has divested

Move for Vic and Tas governments to dump tobacco stocks
February-March 2013: Greens will move for the Victorian and Tasmanian governments to exclude tobacco from all its investments, following the decision by the federal government’s Future Fund to divest from tobacco. Greens Vic release 28/2/13 and  Greens Tas release 4/3/13

Future Fund goes tobacco-free!
February 2013: Australia’s Future Fund announces it is excluding primary tobacco producers from its investments. Health groups welcome the end of the $230m+ investment as restoring consistency with Australia’s health and aid policies. ASH Aust release 28/2/13 ABC News 28/2/13

Future Fund buys into tobacco company that sees death as a plus
February 2013: Australian government’s Future Fund has bought more tobacco shares, now holds over $230m in tobacco – adding stake in Philip Morris (Czech). CEO Mark Burgess questioned by Greens Senator Richard Di Natale in  Senate Estimates Committee after it’s revealed a Philip Morris-commissioned report told the Czech government in 2001 it was saving them money by causing deaths. Age 13/2/13 ABC news 12/2/13

Tasmania embarrassed over tobacco investment
February 2013: Tasmanian government faces criticism over $27m invested by the state’s Retirement Benefits Fund in tobacco companies Philip Morris, BAT, Imperial, Japan Tobacco, Swedish Match. Labor-Green government accused of hypocrisy by Liberal opposition – but Libs make clear their support for the tobacco investment as “legal”. Health groups says investment inconsistent with health policy, treaty commitments and community attitudes. Mercury 10/2/13

SA excludes investment in tobacco
January 2013: South Australian government fund manager excludes tobacco companies from all investment portfolios – slashing $20m of $29m of total tobacco investment, including by public sector super funds. Health Minister Jack Snelling says Funds SA decision in line with government public health aims, community attitudes.  Minister’s release 25/1/13 SkyNews 25/1/13

HESTA super fund dumps tobacco investment
January 2013: Health and community service employees’ super fund HESTA will drop all of its nearly $35m investments in tobacco by around April. The 750,000 member fund responds to members’ and health groups’ view that the investments conflict with health aims. HESTA joins other super funds and government investment funds opting to divest from tobacco as unethical. Report with ASH comment in  SMH 10/1/13 HESTA tobacco-free investment factsheet

NSW drops $224m tobacco investment – ASH urges Fed and Vic funds to follow
2012: ASH welcomes “great leadership” by the NSW government in excluding tobacco from all government investments, direct and indirect. ASH urges the Federal Future Fund and Victorian government to follow. NSW government release 26/11/12 ASH release 26/11/12

Future Fund says treaty clash is a ground for excluding investment
2012: Future Fund answers Question on Notice in Senate Finance and Public Administration Legislation Committee: The Board’s…. framework provides for exclusion from the portfolio where an activity may…. contravene a convention or treaty ratified by Australia…  (Hansard, F&PA question F112, asked 29/10/12) ASH and allies are urging the Fund to end its $210m investment in tobacco partly because Australia has ratified WHO Framework Convention on Tobacco Control – Art. 5.3 Guidelines say “Government institutions and their bodies should not have any financial interest in the tobacco industry, unless they are responsible for managing a Party’s ownership interest in a State-owned tobacco industry”. FCTC Art. 5.3 guidelines

Victoria urged to drop $100m tobacco investment
2012:  Victorian government urged to drop $100m+ investment in tobacco companies via Vic Funds Management Corporation. Health/medical groups including ASH point out that investors via VFMC include Vic Health Department, Transport Accident Commission, Managed Insurance Authority, WorkSafe, Royal Children’s Hospital, Uni of Melbourne. Age 8/11/12 with ASH comment

Future Fund considers its tobacco investment
2012: Future Fund Chair David Gonski faces questions in Senate Estimates hearing. Fund reviews its $210m tobacco investment under revised Environmental, Social and Governance (ESG) policy after strong public concern.  SMH 25/10/12 Widespread calls to end the socially irresponsible and growing investment were led by health groups ASH, AMA, ACOSH, Heart Foundation, Lung Foundation. Tobacco industry’s appalling ESG record and CASE FOR DIVESTMENT

Call for urgent review of growing Future Fund tobacco investment
2012: AMA, Heart Foundation and ASH urge new Future Fund Chair David Gonski to seek urgent review of the fund’s growing unhealthy investment in tobacco – after Senate questioning revealed almost 250m Aussie dollars are now funding tobacco companies via the government fund. AMA, ASH and Heart Foundation release 16/10/12 ABC News 16/10/12 Anne Jones of ASH comments on  ABC Radio National 17/10/12

Health leaders call for end to Future Fund tobacco investment
2012: ASH and partners urge Australian parliament to end tobacco investment by Australia’s Future Fund. Senate debates bill to ban tobacco investments by the Fund. Health groups ask government to end the $210b investment by legislation or ministerial direction.  ASH Aust – Heart Foundation – Aust Lung Foundation release 13/9/12 Call for rethink on tobacco investment in Australian Financial Review 12/9/12 Lib Senator Scott Ryan defends tobacco investment in  ABC Drum opinion 12/9/12
No future in tobacco investment:  ANU Law Professor Matthew Rimmer comments in  The Conversation 13/9/12

Senate Committee doesn’t back ethical investment bill
2012:  Senate Standing Committee recommends against Greens bill to set socially responsible investment guidelines for government’s Future Fund, excluding tobacco. Majority report says bill risks “significant adverse consequences” for the Fund, pointing to existing mechanisms that “ensure that the Future Fund adheres to best practice and acts responsibly.” Majority & dissenting reports 23/8/12, submissions/hearings including ASH input

NSW urged to catch up on responsible investment
2012: NSW government urged by health leaders to divest from tobacco stocks as ACT has done (below). ASH comments in  SMH 21/8/12

ACT leads the way in dropping tobacco investment
2012: ACT government becomes Australia’s first to specifically exclude tobacco from government investment under new responsible investment guidelines. Health leaders  welcome the move, call on Federal and other states and territories to follow. Canberra Times 20/8/12 ASH and partners release 20/8/12 ACT responsible investment policy NSW urged to catch up:  SMH 21/8/12

Local Government Super excludes tobacco
2012:  Australia’s Local Government Super Fund excludes tobacco from its investment options under new socially responsible investment guidelines. It joins First State and Uni Super (below) in screening out tobacco.  Ethical Investor 18/8/12

Tobacco investment bad for Australia, inquiry told
2012: ASH tells Senate Standing Committee Australia’s Future Fund should not invest in tobacco. ASH supports bill to set socially responsible investment guidelines for the Fund, excluding tobacco. ASH CEO Anne Jones tells the Committee barring tobacco investment is consistent with Australia’s treaty commitments, health and aid policies; Future Fund Act; and worldwide best practice. Also addressing the Committee: Future Fund, Finance Dept, Responsible Investment Assoc, Quit Victoria, more. Senate Standing Committee Inquiry
Transcript 8/8/12 hearing
including ASH, Quit Vic, Future Fund
ASH written submission and  All submissions Comment in Business Spectator 10/8/12

Future Fund details$200m+ investment in death and disease
2012: Future Fund provides  details of its investments in tobacco companies – up 40% in a year to $210m and including low-middle income nations like Indonesia, India, Malaysia and Brazil, where the industry uses aggressive tactics and targets children. Examples

Super move: First State Super drops tobacco stocks
2012: Australia’s First State Super fund removes tobacco companies from its investment portfolio – a move welcomed by health leaders.  First State Super release 19/7/12 and Factsheet

Future Fund defends growing tobacco investment
2012:  Future Fund Managing Director Mark Burgess, along with Finance Minister Wong, questioned by Greens in Senate estimates committee about tobacco investment. Burgess admits the investment now worth $200m+, resists suggestions of ending it as “quasi-political”. Senate Estimates Hansard 23/5/12 pp. 47-50

States, territories urged to stop investing in tobacco
2012: ASH and partner ACOSH write to all state and territory governments urging an end to tobacco investment. ASH is advised Tasmania has no direct investments and ACT is reviewing its policy.   ASH Australia, March-June 2012

Federal Government under pressure over Future Fund tobacco investment
January 2012: Gillard Government reported to be under pressure to stop its Future Fund investing in an industry that undermines the government’s health policies. Melbourne Age 9/1/12 Report also mentions that in October 2011 the Canadian state Alberta divested tobacco shares because it was suing the tobacco industry for health costs caused by smoking

Australian health groups seek government tobacco divestment
2011:  Health groups write to Australia’s Prime Minister, Ministers and government’s Future Fund, expressing concerns at over $140m investment in tobacco companies via the Fund, and calling on the investment to end. Responses are inconclusive. Greens introduce bill to end government investment in tobacco.  ASH Australia, 2011

UniSuper excludes tobacco investment
2011: UniSuper tells members it has screened tobacco out of its investment options because “long tail litigation liabilities and uncertain regulatory future…. presented investment risks which warranted the exclusion of tobacco stocks.” UniSuper FAQs – Responsible Investing – tobacco

NSW government under pressure over tobacco investment
2006: NSW government accused of “hypocrisy” for investing in tobacco companies. Then Shadow Health Minister Jillian Skinner says: “I find it hard to… defend a government owning shares in a tobacco company…. one of its primary responsibilities is looking after the health of the population of New South Wales…. I think the Premier…. must sell these shares today.”  ABC Radio “World Today” 26/6/06 Mrs Skinner became Health Minister in 2011; but despite written requests for review, NSW government-related entities may still have indirect investment in tobacco companies.

ASH starts ball rolling for super fund divestment
2002:  ASH Australia begins to approach superannuation funds seeking their support for ending investment in tobacco companies.  ASH Australia, October 2002


Global noose tightens on big tobacco
March 2013:  Laws and regulations tighten on the tobacco industry worldwide, not just in wealthier countries. Wall St analyst weighs the industry’s shaky future. Tobacco Unfiltered 15/3/13

US state Alberta divests tobacco stocks
2011: Government of US state of Alberta directs its fund managers to sell off direct investment in tobacco companies.  Physicians for Smokefree Canada 20/10/11

Norway: Government pension fund bars investment in tobacco
2010: Norway’s government pension fund can no longer be invested in tobacco companies under new guidelines introduced by the country’s Ministry of Finance. Government follows its Council on Ethics’ recommendations to sell tobacco holdings. Finance Markets 5/3/10

NZ: National super fund divests in tobacco
2007: Guardians of New Zealand Superannuation Fund decides to divest tobacco stocks from its investment portfolios. The Board’s assessment and divestment decision was that the Fund’s investments in tobacco companies is “inconsistent with its responsible investment standards.”  NZ Super release 23/10/07

USA: Five state employee super funds have divested in tobacco
2000: California Public Employees’ Retirement System decision to exclude tobacco investment means five US state employee super funds have divested or restricted tobacco holdings.  New York Times 29/10/2000

Details under  RESOURCES

  • Australian jurisdictions: Federal (Future Fund, 2013), ACT (2012), NSW (2012), SA (2013).
  • Sovereign wealth funds in Norway, New Zealand and five US states.
  • Australian super funds: HESTA, First State, Local Government Super, UniSuper, Christian Super, SunSuper.
  • Other funds:
    – AMP Capital
    – Australian Ethical Investments
    – Hunter Hall
    – UCA Funds

THE TOBACCO INDUSTRY’S RECORD History of tobacco industry misdeeds

Tobacco companies claim to be “socially responsible” corporations. They reinvent themselves by giving generously to political parties and worthy causes like disaster relief, aid and homelessness. They set up front groups and sponsor ineffective campaigns to reduce tobacco litter, youth smoking and child labour. They run efficient office programs for reducing carbon and waste, and give staff time off to volunteer for charities.

But not only are their products deadly, addictive and marketed to children, the tobacco-growing business has been accused of relying on slave labour, child and human rights abuses and causing  large scale deforestation, soil depletion and green tobacco sickness; adding to climate change, hazardous litter, toxic waste and encouraging many poor countries to swap sustainable food production for growing a product that kills people when used as intended.

Investment policies are often framed to meet Environmental, Social and Governance (“ESG”) principles. How does the tobacco industry measure up?
ENVIRONMENTAL More about  Tobacco pollution

Tobacco litter trashes land and waterways, tobacco farming eats up farmland and forests.
2011 review of tobacco farming environmental health impact shows the full global impact.

ASH UK factsheet 2009 examines tobacco growing and pesticides, green tobacco sickness, deforestation, food production impact, pollution, fire risk, climate change… and industry response.

5.5 trillion cigarettes are consumed globally every year. Of these, 4.95 trillion are filters, dumped somewhere in the environment. Cigarette Butt Pollution Project has the staggering worldwide figures. In Australia, cigarette butts are one of the biggest causes of litter, trashing our bushland, parks, beaches and waterways. Up to 20 billion ugly, toxic filters are discarded each year, with ratepayers footing the bill for the cleanup.


The industry’s violations of human rights assessed by  Tobacco Control report 2012, and ethical and legal issues in  Tobacco Control 2005

Tobacco Control report 2006 looks at a British American Tobacco corporate responsibility project to sidestep tobacco child labour exploitation issues.

Social responsibility in tobacco production? Tobacco Control report 2011 looks at tobacco companies’ use of green supply chains to obscure real costs of tobacco farming – using tobacco industry documents, industry websites, interviews with tobacco farmers in Africa, farm authorities, trade unionists, government officials and transnational tobacco executives.

More at  Human Rights Tobacco Control Network and at – a resource on Tobacco Industry agriculture exploitation with case studies from India, Malaysia, Kenya, Turkey, Brazil, Bulgaria and more.


Ethical behaviour is a fundamental cornerstone of good governance. See long history of tobacco industry misdeeds.

WHO report 2008 documents decades of tobacco industry tactics worldwide to block and undermine effective health policies and monitoring of tobacco industry behaviour.

INGCAT report 2001 examines flaws in the tobacco industry’s own International Tobacco Product Marketing Standards, the purpose of tobacco advertising, the fallacy of tobacco industry arguments on advertising and the case for comprehensive advertising bans.

RESOURCES see also above under Environmental, Social, Governance

From ASH:

Why we should end investment in tobacco factsheet
ASH, ACOSH, Heart Foundation factsheet (2013, one page, 2-sided pdf) makes the case for Australian federal, state and territory governments to exclude tobacco from investment under socially responsible policies. Arguments and counter-arguments; the tobacco industry’s record; who has already divested; next steps.

Briefing paper for super funds
4p briefing (2013) suitable for sending to your super fund. Outlines the risks of funds investing in tobacco and why they should divest on ESG and best business practice grounds.
For a copy, contact ASH.

Positive message in Future Fund butting out tobacco investment
ASH opinion in Financial Review (March 2013)

Other resources (in alphabetical order):

ACT Government’s responsible investment policy
Adopted August 2012, specifically excluding tobacco investment.

AMP Capital
Socially responsible investment policy says:  Based on our assessment, the tobacco industry, or any company within it, has social costs that significantly outweigh any social or economic benefit and therefore, we have an absolute negative screen on companies with a material interest industries (10% as measured by a relevant indicator such as investment or sales) in the tobacco industry.

Australian Ethical Investment Ltd
Ethical fund manager that excludes tobacco under its  charter because it avoids investments which “extract, create, produce, manufacture, or market materials, products, goods or services which have a harmful effect on humans”.

Butt out of pensioners’ lives
Persuasive comment in Hobart Mercury 16/3/13 from veteran Tasmanian health advocate Kathryn Barnsley, urging her state’s Retirement Benefits Fund to divest from tobacco.
Christian Super
Australian super fund excludes investment in tobacco under its Ethical Investments Charter.
Ethical Investor
Industry magazine that reports on trends and news for investors and fund managers – including ASH comment on latest wins (at March 2013) in tobacco divestment.
FCTC Article 5.3 toolkit
Factsheets for governments, with step-by-step guidance on legislative and policy elements of preventing tobacco industry interference in health policies under Article 5.3 of WHO Framework Convention on Tobacco Control. From International Union Against Tuberculosis and Lung Disease (IUATLD).
First State Super
Factsheet on Australian super fund’s decision to end tobacco investment from 1 July 2012.

Government Investment Funds Amendment (Ethical Investments) Bill 2011
Australian amendment bill moved 2011. Senate Committee report did not support it. Majority report 23/8/12, dissenting report, submissions and hearings Bill ASH submission All submissions Transcript 8/8/12 public hearing including testimony by ASH, Quit Vic, Future Fund
HESTA Super tobacco-free investment factsheet
From the health industry super fund that divested in 2013.
Implementing ESG principles in investment decisions
Financial Services Institute of Australasia webpage with link (go there and click on above title) to practical guidelines for superannuation professionals. Includes significance of UN Principles for Responsible Investment and step-by-step guide to implementation.
Leave the Future Fund alone
Liberal Senator Scott Ryan defends investing Australian money in tobacco companies.
ABC The Drum opinion 12/9/12

No future in tobacco investment
ANU Law Professor Matthew Rimmer comments. The Conversation 13/9/12
NZ Super
23/10/07 release: Considering Crown action internationally, and at the domestic level, the unusual characteristics of the tobacco industry, particularly with regard to product safety and ethics, and the effectiveness of different shareholder responses, … divestment and exclusion of the Fund’s tobacco holdings would be the most effective response.
Responsible Investment Association Australasia
Peak body of professionals in ethical investment in Australia and New Zealand. RIAA points out that Australia is a world investment leader and that responsible investment is commonly considered “best practice”.

Smokes But No Cigar for Gonski’s Fund
August 2012 comment in Business Spectator says the Future Fund could disinvest as other national funds have, with no significant downside for its investors.

SunSuper the latest to kick the tobacco habit
March 2013 update in Ethical Investor with ASH Australia comment. 
More on socially responsible investment: Ethical Investor
Tobacco Free Pensions 
UK blog reports on British and other international developments.

Tobacco in Australia: Facts and Issues
Comprehensive Australian resource includes questions about the tobacco industry’s future.

Tobacco Industry Interference with Tobacco Control
WHO report 2009 on what the industry is doing to block, delay, weaken and undermine public health policy – and how it can be stopped, including by ending investment by government and its agencies in tobacco companies.

Tricky path forwards for funds
Comment by Financial Review calls on Future Fund to rethink its tobacco investment.  Australian Financial Review 12/9/12

UCA Funds
Ethical guidelines exclude tobacco.

Australian super fund screened tobacco out of its investment options because “long tail litigation liabilities and uncertain regulatory future…. presented investment risks which warranted the exclusion of tobacco stocks.”

UN Principles for Responsible Investment
Collaborative project backed by the United Nations for fostering responsible investments. Some super funds have endorsed and implemented responsible investment principles – those that have not should be urged to follow.


1.  Write to your own super fund
Anyone can write to their own super fund asking it to adopt responsible investment guidelines that exclude tobacco. |
– First, find out what your fund’s existing investment policy is and whether it excludes tobacco investment. Ask whether they have funds invested in the tobacco industry; if they have a policy on ethical or socially responsible investment or “ESG” guidelines, and if so, have they decided that tobacco is allowed or excluded under their policy.
– If the fund is investing in tobacco or their policy is unclear, you could use the reasons under “Why shouldn’t…?” above as the basis for your request that the fund adopt socially responsible investment strategies that exclude tobacco.

ASH has a 4p briefing paper you can send to your super fund. For a copy, contact us.

2. Send letters/emails to political leaders calling for an end to tobacco investment
Most Australian governments still invest in tobacco companies and should be urged to end these unethical, socially irresponsible investments. Consider reasons under “Why shouldn’t…?” above as a basis for calling for an end to governments’ direct and indirect investment in an industry that harms public interest, government health policies and the economy.

So far, Australia’s national Future Fund as well as the ACT, NSW and SA have specifically excluded tobacco companies from their investments. Tasmania and WA say they have no direct investment in the tobacco industry but have no apparent specific written policy ensuring this. Other jurisdictions may have tobacco investments, have no policy against this or stay at arm’s distance from their investment funds’ decisions.