Investors told to put heat on tobacco
New Zealanders are being urged to pressure their financial service providers to drop investments in tobacco companies.
It was revealed this week that AMP Capital is giving up its investments in tobacco companies. That follows moves by KiwiSaver providers such as ANZ and Westpac.
But other providers, including ASB, still have investments in tobacco, estimated at more than $20 million.
AMP Capital said tobacco products were being excluded because they were highly addictive, could not be consumed safely and would affect non-users through secondhand smoke.
The move means about $471m of tobacco equity and fixedincome holdings will be sold out of AMP Capital’s portfolios over this year.
‘‘AMP Capital still firmly believes in company engagement in order to effect meaningful change,’’ chief executive Adam Tindall said.
‘‘In the case of tobacco, however, no engagement can override the inherent dangers involved with these products.’’
In a statement, ASB said it provided full transparency of holdings.
‘‘With our index-tracking style of investment management, we track the index and have benchmark exposure to tobacco.
‘‘As at the end of February 2017, ASB’s average exposure to tobacco across all KiwiSaver funds was 0.31 per cent.
‘‘More broadly, we are continuing to look at whether there is another way we can provide investors with an alternative low-cost, indextracking investment option that focuses on socially responsible investments.’’
Bank of New Zealand announced yesterday that it was dropping investments in companies involved in the production of cluster munitions, anti-personnel mines, nuclear weapons and tobacco or tobacco products.
BNZ head of wealth Donna Nicolof said the size of the bank’s fund management business, including KiwiSaver, now gave it the power to establish its own investment mandates.
‘‘We have been developing our approach to responsible investing over the past six months to ensure we have a robust framework where investment decisions align with both our investment beliefs and the changing attitudes of our investors and society,’’ she said.
Bronwyn King, of the Tobacco Free Portfolios campaign, said fund managers could have a strong voice on social issues, which would be heard overseas.
‘‘I often suggest to people that they imagine if a brand new industry was invested today and in 12 months had made a product responsible for 6 million deaths.
‘‘Would any of us say ‘Let’s invest in that industry in our pension funds, or have our banks lend them money’? It’s incomprehensible that we would tolerate that yet that is what we are doing. We are asking people to reflect on that.’’
She said individuals could take action by contacting their financial services providers to ask for details of their support for the tobacco industry. ‘‘You can ask, are they investing money in the tobacco industry, in products that kill people? That’s a reasonable request.’’
The New Zealand Superannuation Fund dropped investments in tobacco in 2007, making it the first sovereign wealth fund in the world to do so.
A spokeswoman for the fund said it was not clear what impact on returns that had.
‘‘Overall, we estimate the impact of exclusions on the performance of the fund as -0.04 per cent per annum. This is not a material figure – it is very small.’’
Malcolm Rands, founder of Ecostore and a proponent of responsible investing, said people should not underestimate the influence they could have.
Companies were increasingly worried about their reputations as the world became more commoditised, he said.
‘‘It’s all about trust and reputation. The last thing people want is their reputation tainted … The secret is to not shut up.
‘‘Get out and do something. If you can, go to the AGM, or if you know someone on the board, talk straight to them.’’