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Another super fund drops its investment in tobacco

Dan Harrison
Published: January 10, 2013 – 3:00AM

THE superannuation fund for health and community services workers has become the latest fund to dump its investments in tobacco.

HESTA chief executive Anne-Marie Corboy confirmed the fund had started removing tobacco investments from its portfolios this year, following a decision by the fund’s board late last year.

Ms Corboy said she expected the fund, which has more than 750,000 members, to have sold all its tobacco investments by about April.

She said for more than a decade the fund had allowed members to put together tobacco-free portfolios, and had excluded tobacco from its ethical investment option since early 2012. She said less than $35 million of the $20 billion managed by the fund was invested in tobacco.

Anne Jones, the chief executive of Action on Smoking and Health Australia, welcomed the move.

”If a health fund invests in the tobacco industry, they are part of the tobacco industry,” she said. ”It’s clearly unethical.”

HESTA’s decision comes as the Future Fund weighs what to do with its tobacco investments, worth more than $200 million. Fund chairman David Gonski told a Senate hearing in October the fund had not set out to invest in cigarette makers, but acquired its tobacco shares through investments in fund managers, which often had a mandate to own top-performing stocks.

Ms Jones called on the Future Fund to dump its stake, arguing it was hypocritical for Australia to try to stamp out smoking domestically while profiting from it abroad.

”You can’t have Australia being a leader in tobacco control driving down smoking rates at home but saying it’s OK for us to be investing in getting poor people addicted in other countries,” she said.

In November, the New South Wales government said it would dump more than $200 million in tobacco investments and ban them in future.

First State Super, which has more than 770,000 members and more than $32 billion in funds under management, said in July it had disposed of all its tobacco investments.

The Victorian government’s investment management organisation, the Victorian Funds Management Corporation, has more than $100 million invested in tobacco and has said it has no intention of getting rid of them.

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