Institutional investors and tobacco

The use of tobacco is unhealthy and this has been known for a long time. Half of its users will die of the consequences. For the Netherlands this means that every year 20,000 people die due to smoking. The World Health Organization estimates that tobacco kills 6 million people worldwide per year.1
Still investments in the tobacco sector are common in the investment portfolios of institutional investors. In this report we provide an overview of how Dutch institutional investors cope with tobacco investments and provide institutional investors with recommendations on how to for- mulate their own policy concerning tobacco. The findings are based on a questionnaire and in-depth interviews with institutional investors and experts.

Key findings include that of the responding institutional investors, 53% do not have a policy on tobacco. However, there are large differences between the types of institutional investors. For example, in the insurance sector, only 9% of the respondents have not created a policy. This is in sharp contrast to the responding pension funds of which 73% do not have a policy on tobacco.

When performing the literature study, four important ‘myths’ were discovered about investing in tobacco. Throughout this study we aim to disprove these ideas.