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Sydney MH: Public servants’ super fund scraps tobacco investments

by Dan Harrison, reporting for the Sydney Morning Herald:

The superannuation fund for federal public servants and military personnel is the latest to ditch its investments in tobacco.

News that the Commonwealth Superannuation Corporation had sold off its tobacco holdings – valued at about $100 million – emerged in response to questions from Greens Senator Richard Di Natale in a Senate hearing on Tuesday.

The corporation’s chief executive, Peter Carrigy-Ryan, told the hearing it made the decision to divest on October 22 and was in the process of selling its tobacco investments.

The tobacco holdings represent about 0.33 per cent of the approximately $30 billion managed by the corporation.

Mr Carrigy-Ryan said increased regulation of tobacco, such as plain packaging and tougher restrictions on where smoking is permitted, and the risk of further controls, had influenced the corporation’s decision to divest.

Mr Carrigy-Ryan said while the corporation had a policy of trying to engage with companies on environmental, social and governance concerns, this approach would not work with tobacco because of the harmful nature of the product and because tobacco products were generally the only products produced by tobacco companies.

‘‘In other words, we did not think that our engagement process was going to have any level of success in relation to that particular product,’’ he told the hearing.

Senator Di Natale congratulated the corporation on the move.

‘‘I think it is an important decision, and the fact that we have now in the ballpark of $100 million of your members’ money out of companies like Philip Morris and British American Tobacco is something that you should rightly feel proud of,’’ he said.

In February, the Future Fund announced it would sell its tobacco investments – valued then at about $222 million – citing the damaging health effects and addictive properties of tobacco.

Superannuation funds including HESTA, UniSuper and First State Super have previously dumped their investments in tobacco.

20 Nov 2013

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