Business

AXA Shows Smokers How To Quit Smoking

AXA, the largest French insurance company, has announced on its website that it will cease any investments in the tobacco industry and look to divest those currently within its portfolio.

AXA Shows Smokers How To Quit Smoking

AXA – Impact of Smoking

The company has stated that the detrimental effect of smoking on the public heath means it will no longer invest in tobacco companies and will begin to offload 1.8 billion euros ($2.02 billion) worth of stocks and bonds it owns within the sector. 200 million euros will be sold at once and the rest will managed off the books in the future.

A spokesperson declined to identify individual stock names that the company owns, (but Bloomberg analysts suggest the company owns stocks in Philip Morris, British American Tobacco and Altria,) but was happy to confirm they were longstanding investments that that comprised only small part of the general accounts.

Newly appointed Chief Executive Thomas Buberl said, “With this divestment from tobacco, we are doing our share to support the efforts of governments around the world.”

Altruistic or financial motivation?

Despite declining smoking rates in the Western world and following on from a decision this week in the United Kingdom that all cigarette packaging must come in plain green packaging with graphic warning pictures, tobacco companies continue to make huge profits.  Buberl, who is currently deputy chief executive officer but appointed the new CEO and will commence the role in September said this was not part of the consideration; “This decision has a cost for us, but the case for divestment is clear: the human cost of tobacco is tragic; its economic cost is huge,”

AXA also contains a health insurance division, which was said to provide about one quarter of the companies earnings, so trying to square the circle between providing health cover while investing in cigarettes was too difficult. Buberl commented, “We need to invest more into prevention in order to prevent chronic diseases and we want to really support that, not invest in tobacco which creates more chronic diseases.” He added, “It makes no sense for us to continue our investments within the tobacco industry.  The human cost of tobacco is tragic – its economic cost is huge.”