(May 23rd, 2016, Geneva, Switzerland and New York, USA) – Global public health experts Vital Strategies today applauded AXA Group on its decision to become the first global financial services organization to adopt a strategy of divesting its interests in the tobacco industry. AXA Group currently holds equity stakes totalling around 184 million euros in a number of publicly-traded tobacco stocks, it provides insurance policies to tobacco businesses, and it holds just under 1.6 billion euros in tobacco industry corporate bonds.
José Luis Castro, President and Chief Executive Officer, Vital Strategies, said: “AXA Group’s action is a landmark for the global financial services sector and we applaud them for their leadership and innovation. It also sends a strong message: an organization that has a vested interest in global development and wealth, that also wishes to be an ethical partner and service provider to its customers, has decided that the tobacco industry – which is a net cost to society – is bad for business.
“This is the exact opposite of the tobacco industry’s much-touted claim to be economically critical. Instead, it is a recognition that tobacco is responsible for environmental damage, human disease and disability, and the deaths of six million people every year, all of which result in an increasingly unsustainable economic burden.
“We also recognize the leadership of Dr Bronwyn King and Tobacco Free Portfolios in seeking to address the financial power of the tobacco industry by engaging with the global financial services industry.
“The fact that AXA Group has made this announcement here, at the World Health Assembly, once again underlines the truth at the heart of the 2030 Agenda for Sustainable Development: health is inextricably linked to global development and global wealth. Reducing tobacco use is critical, so today we call on other financial services businesses to follow AXA Group’s visionary leadership and embrace a tobacco-free future.”
About AXA Group’s divestment strategy
Under its tobacco divestment strategy, announced at the World Health Assembly in Geneva, AXA Group will divest its equity holding and stop new investment in tobacco industry corporate bonds, with immediate effect. It will also decline to renew or provide new insurance policies for tobacco businesses. Current fixed income holdings – predominantly in the form of senior corporate bonds – will be allowed to come to maturity. With a combination of immediate and planned activity it is anticipated that AXA Group will be predominantly tobacco-free within the next decade.
This divestment strategy perfectly complements AXA Group’s health business and its growing interest in health prevention. This decision is also consistent with AXA Group’s philanthropic activities, which includes funding scientific research on threats to human health, society and the environment. It follows AXA Group’s decision last year to divest from coal businesses that refuse to transition to cleaner energies, which followed a similar ethical, business and economic rationale.
To date, few financial services organizations have made the decision to be tobacco-free. Only the Norwegian Pension Fund and around half of Australian pension funds have adopted similar strategies. Engagement from Tobacco Free Portfolios spurred more than 36 Australian funds to divest tobacco stocks, to the value of almost 2 billion Australian dollars (1.2 billion euros). AXA Group is by far the biggest and most diverse global financial services business to divest its tobacco industry interests.
About Vital Strategies
Vital Strategies envisions a world where every person is protected by a strong public health system. Our team combines evidence-based strategies with innovation to help develop sound public health policies, manage programs efficiently, strengthen data systems, conduct research, and design strategic communication campaigns for policy and behavior change. Vital Strategies was formed when The Union North America and World Lung Foundation joined forces. It is an affiliate of The International Union Against Tuberculosis and Lung Disease (The Union).
To find out more, please visit vitalstrategies.org or Twitter @VitalStrat
For further information or to arrange an interview with a Vital Strategies public health expert, please contact Tracey Johnston, Vital Strategies, at +44.7889.081.170 or tjohnston@vitalstrategies.org