Sustainability concerns add to pressure on tobacco stocks

Fund manager Robeco is the latest investment organisation to shun tobacco stocks, as part of a sustainability approach.

Robeco already excludes tobacco from its sustainable fund range and it will extend this exclusion to all its mainstream funds. The exclusion does not apply to client-specific funds and mandates. The tobacco industry is increasingly seen as negative on social and governance grounds by investors. In a statement, Robeco said: “Although Robeco takes its responsibility as a shareholder seriously and actively engages with companies it invests in, engagement with the tobacco industry will not lead to fundamental change. Therefore, for Robeco, investing in tobacco is no longer compatible with the company’s commitment to sustainable investing (SI).” The manager’s head of investments, Peter Ferket, added: “Robeco has been at the forefront of SI since the 1990s and sees sustainability as a long-time force for change in markets, countries and companies. Given the significant international concerns about the risks posed by tobacco and in view of recent developments, such as the UN Global Compact’s decision, we think the time is ripe for excluding tobacco.”

The exclusion will apply to all listed companies that are involved in the production of tobacco or significant components of cigarettes. The process of excluding tobacco stocks will be completed by the end of the third quarter of 2018.