Surrey County Council will continue to invest in tobacco companies | This is Surrey
Surrey County Council will continue to invest in tobacco companies | This is Surrey.
Surrey has decided to continue with tobacco investments. The report is in the public domain here on the SCC website and is fairly typical of those reports I have seen in the public domain. What do I mean by this? Well,
- It fails to mention, let alone consider in any depth the requirements of the Framework Convention on Tobacco Control, and does not mention at all the Guideline to Compliance which states that councils should not invest in tobacco companies.
- It repeats hoary old chestnuts, such as where do you draw the line, trotting out the whole tobacco supply chain such as major retailers, and suppliers of services to tobacco companies, as well as the slippery slope argument re alcohol, gambling.
- Fails to mention that funds in many other jurisdictions with similar fiduciary duties have divested from tobacco companies.
- Fails to seek the views of the Director of Public Health, even though the report has been produced precisely because public health has transferred to the council.
The pension fund committee may well have reached this decision even if it had been given a more rounded picture, but the public health case for divestment was barely made. Surely Councils must consult their Director of Public Health in future when considering this issue, and committees be at least made aware of UK obligations under the FCTC. Otherwise these committees are taking decisions without a full picture which potentially leaves them open to challenge.
Public Health England calls on councils to disinvest from tobacco
Local authorities, pensions and the FCTC
The UK is a signatory to the Framework Convention on Tobacco Control, as I have mentioned many times. The obligations thus entered into are binding on all parts of UK Government including local government. This is a fact that many councils are in blissful ignorance about, judging by the absence of any consideration of the implications of the FCTC for their tobacco investments.
So, it is worth taking a moment to just read a few key sections from the Convention, and then reflect on the implications for tobacco investments in the medium to long term.
Article 3 sets out the objective of the Convention
Norway Excludes Schweitzer-Maudit and Huabao From Wealth Fund – Bloomberg
Norway Excludes Schweitzer-Maudit and Huabao From Wealth Fund – Bloomberg.
Two companies that produce tobacco products have been excluded from the Norwegian state pension fund. One of them produces RTL, reconstituted tobacco leaf. Smokers might be interested to read what goes into their cigs as RTL!
Imperial profits go up in smoke
Imperial profits go up in smoke – Independent.ie.
Imperial Tobacco, based in Bristol, has reported a drop in profits for the first time since listing on the stock market. Sales are markedly down in many first world markets such as Europe.
The pace of tobacco control efforts around the world is accelerating as governments realise the huge harms to their populations from smoking and implement the framework convention on tobacco control. Recently we saw the first actual worldwide fall in sales volumes.
Tobacco stocks are not necessarily the safe haven for pension fund managers that they might think, certainly in the medium to longer term.