The extension of the tobacco exclusion across its fund range includes sub-advised funds, but does not extend to client-specific mandates. The exclusion was already in place in its responsible investment funds.
The divestment will include all listed companies involved in the production of tobacco or “significant components” of cigarettes.
Divestment will be completed by Q3 2018.
No retail funds at Robeco or BNP Paribas AM hold tobacco in their top-10 holdings, according to FE. The £1bn Morgan Stanley Global Brands fund, managed by Peter Wright and William Lock, is the Investment Association fund with the largest allocation to tobacco, holding 15.3%, more than double the allocation in the next most exposed, the PUTM UK Stock Market fund, which holds 7%.
IA funds with the highest allocation to tobacco
| Morgan Stanley – Global Brands | 15.3% |
| PUTM – UK Stock Market | 7% |
| Schroder – Prime UK Equity | 5.9% |
| Charles Stanley Equity | 5.8% |
| Miton Income | 4.6% |
Source: FE Analytics
Robeco said in a statement that investing in the carcinogenic product is socially disadvantageous and does not align with its commitment to responsible investing.
Seven million people die annually from tobacco-related causes and the economic cost of the industry is estimated to cost $1trn annually, according to the World Health Organisation (WHO).
The statement said although Robeco actively engages with companies it invests in “engagement with the tobacco industry will not lead to fundamental change”.
BNP Paribas AM announced last Thursday it would divest from tobacco in all funds over which it has full discretion by the end of 2018, extending the ban it implemented in sustainable portfolios in 2002.
The WHO’s framework on tobacco control, which is signed by 180 countries, aims to reduce tobacco use by 30% by 2025 through regulation and tax increases.
BNP Paribas AM chief executive Frederic Janbon said it was one of the first global asset managers to commit to tobacco divestment.
“We recognise the important role that long-term capital plays in tackling major global issues and with an increasing number of asset owners, insurers and pension funds excluding tobacco from their investments, we are taking into account growing international concerns about the risks posed by tobacco,” Janbon said.
BNP Paribas AM said it did not have figures on the number funds that must divest from tobacco due to the divestment, but said the exclusion applied to products representing €228bn.
Robeco said it had 0.22% in tobacco at 16 February representing €129m.
