The boardroom agendas of businesses across the globe are strikingly similar, despite each believing in their own distinct market proposition. Like much else, what’s on the agenda is subject to fads, the influence of others and external forces, sometimes unexpected and sometimes entirely predictable.
Attempts to influence the agenda range from the overt (protestors with placards) to the public (a metric ton of coal delivered to the front door of a bank, for example) to the illegal (hacking internal email systems to deliver blunt messages to staff).
Others take a less confrontational route: they write letters, speak to their local member or advocate patiently for change. On occasion, change happens. Some issues are dealt with swiftly, others are not so easy. Boards might choose to wait and see – or lead.
One issue that has made a surprising entry as a priority on boardroom agendas is tobacco. Even public health officials, with a lifetime of tobacco control experience, have marveled at the attention the issue of tobacco, and more specifically financial investment in tobacco, is receiving across the finance sector globally.
Tobacco has long been considered a health problem. It’s now more than 50 years since the US Surgeon General announced the unequivocal link between poor health outcomes and tobacco use – and even then it was considered late. We know that tobacco use results in devastating health impacts from lung cancer and heart disease to the loss of limbs and eyesight, even to respiratory problems in our children.
Despite this knowledge the facts might still startle: 7 million people will die this year and 1 billion this century – because of tobacco. In Australia alone, 15,000 people die each year. This, despite the persistent and gallant efforts of doctors, public health experts and governments across the globe.
The fight against tobacco companies has been relentless, the wins both big and small – but mostly just costly. An ally that has long been missing in global tobacco control is that of the business community, namely the finance sector.
Tobacco is, after all, a business and the health implications are an outcome of a business model that has allowed the privatization of profits with the outsourcing of costs. These companies have thrived through continued financial investment allowing expansion and influence.
Unwittingly for many, they’ve found themselves as ‘owners’ of tobacco companies through investments like superannuation. A ‘best of sector’ methodology means that even ‘sustainable’ and ‘responsible’ investment options routinely include tobacco companies. We’ve certainly created complex financial systems, and untangling not just the average worker but also the biggest financial institutions can take time, but it can be done.
Finance players are recognizing that positive influence of the industry through professional engagement is futile, as the core product is the problem with the only acceptable outcome being to cease the primary business.
Momentum around tobacco-free investment has grown steadily. The announcement in January by ABP, the world’s fifth-largest pension fund, of a new policy excluding investment in tobacco was a signal of the year to come. Now we have the Tobacco-Free Finance Pledge, to be launched at the UN in New York during today’s General Assembly, sponsored by the French and Australian governments. This is set to be a very public demonstration of the finance sector’s willingness to play its part in ensuring a tobacco-free future.
The pledge is founded by Tobacco Free Portfolios, led by Dr Bronwyn King and further developed in collaboration with finance-oriented UN agencies and globally recognized financial institutions such as AMP Capital, AXA, BNP Paribas and Natixis. The list of signatories to the pledge is steadily growing and remains open to more.
Tobacco already stands as the most commonly requested exclusion in the market. In turn, tobacco-free financial products are coming to market to meet demand. As ESG practices become a criterion for which investment might be received or withheld, leaders across the finance sector are using their power to do what they can to address some of the most pressing issues of our time – and tobacco is undoubtedly one of them.
The words of educator and writer Anna Lappé remind us that ‘every time you spend money, you’re casting a vote for the world you want.’ In finance, tobacco control has a new ally and its force is set to grow – that, it would seem, you can bank on.
Clare Payne is chief of global strategy with Tobacco Free Portfolios and the author of A matter of trust – The practice of ethics in finance
