“What might have a more lasting impact is Friday’s Federal Drug Administration announcement that it would seek to lower nicotine levels in cigarettes to “non addictive” levels,” he continued.
“However, as in all things FDA, this is not going to be a fast process. I would be very surprised to see meaningful proposals implemented this decade.”
But BAT will have to be “absolutely squeaky clean” in its emerging market dealings, which it still has 60% exposure to, he noted.
Conversely Matt Crossman, stewardship director at Rathbone Greenbank Investments, thinks tobacco has no place in the more responsible investment industry of the future.
He said: “It’s no exaggeration to say that the industry has only ever moved in more responsible directions when it has been forced to do so by regulation; at the same time, the industry has become more and more adept at shifting its growth efforts to areas where regulation is weaker.”
“As more countries take up the WHO recommendations and begin to implement stricter control, we expect growth opportunities to stall for the industry,” he continued.
“Responsible investment is about investing in companies making useful goods and services which benefit society, pursued in a responsible manner. Tobacco does not pass this test.”
