Axa stubs out €1.7bn tobacco industry investment

It said investing in the sector made no sense given that smoking killed some six million people a year, reports The BBC.

The move by Axa is an attempt to support government efforts to reduce the number of people who smoke.

Tobacco companies last week lost a High Court challenge to plain packaging for cigarettes sold in the UK.

A major health insurer, Axa said its role was increasingly about prevention rather than cure.

Its announcement coincides with the annual World Health Assembly in Geneva, where World Health Organization member nations meet to discuss global public health policy.

The Axa Group, which manages assets worth €1.36 trillion, will sell its €184m of shares in tobacco companies, and tobacco industry bond holdings that are valued at almost €1.6bn.

However, that accounts for just 0.6% of its corporate bond holdings.

Incoming chief executive Thomas Buberl said that although the decision would cost Axa money, it would generate savings by resulting in fewer claims for tobacco-related diseases.

“The business case is positive,” he said. “It makes no sense for us to continue our investments within the tobacco industry. The human cost of tobacco is tragic – its economic cost is huge.”

Mr Buberl said Axa wanted to send a signal to other institutional investors and encourage others to follow suit.