World No Tobacco Day on 31st May reminds us of the health and other risks associated with tobacco use. We are a tobacco-free fund and are proud to support an initiative that tackles this global health issue.
At First State Super we take responsible investing seriously and believe it’s central to creating long-term value for our members.
Driven by our members first approach and our desire to use our influence as a large investor to improve the world we live in, we were one of the first of the large funds that decided not to invest in companies involved in the manufacture of tobacco or cigarettes. We are now proud to announce that we are officially recognised as a Tobacco-Free fund by Tobacco Free Portfolios, a not-for-profit organisation with a mission to eliminate tobacco from investment portfolios across the globe.
Our Tobacco-Free status aligns with our Responsible Investment approach. We are continuously looking for unique investment opportunities that offer competitive returns. However, webelieve that managing ESG risks is a material investment issue that has a meaningful impact in our long-term investments.
What does it mean to be Tobacco-free?
As a Tobacco-Free fund:
- less than 0.1% of all our investments are in companies involved in the manufacture of cigarettes and other tobacco related products.^1
Why we are so committed
are startling. With an estimated 15,000 tobacco-related deaths per year, smoking remains the leading preventable cause of death in Australia.^2 Globally, it is estimated there will be in the 21st century, a 900% rise from 100 million in the 20th century.^3
Does divestment impact my investment returns?
We made the decision to divest tobacco after careful assessment of the potential financial impact on the overall portfolio.
“Our analysis showed there would be inconsequential financial impact from this decision for members’ investment returns. It adds to the decision that the exclusion of direct tobacco investments was unquestionably the right thing to do,” Michael Dwyer, our CEO confirms.
Clearing the air - how we became Tobacco-Free
For a fund our size, becoming tobacco-free took time. Many of our members, particularly those working in the health sector, expressed legitimate concerns regarding the inclusion of tobacco products in their investment portfolios.
We felt we couldn’t dismiss them.
One member, Dr Bronwyn King, a radiation oncologist at Melbourne’s Peter MacCallum Cancer Centre, had fire in her belly. A chance discovery that her super was invested in the very product that was the cause of death and suffering for her patients, changed the course of her life and initiated our journey to becoming tobacco free.
Since 2012, we have worked closely with Dr King, CEO of Tobacco Free Portfolios. Although our decision to divest from tobacco has set a precedent in the industry, it has also made us look harder at what our social responsibility as a company is. Tobacco was one of the first - but we are continuously assessing our overall involvement with those we choose to partner with to ensure we are creating better practices and better responsibility from businesses to consumers.
Due to the complexity of financial markets it is acknowledged that as a matter of practicality that some organisations will have a residual tobacco holding. ↩
Australian Institute of Health and Welfare. ↩
Howard V. Koh from the Harvey V. Fineberg Professor of the Practice of Public Health Leadership at Harvard T.H. Chan School of Public Health and Harvard Kennedy School. ↩