Axa Quits Investing In Tobacco Companies

One of the world's largest insurance companies, Axa (Paris: FR0000120628 - news) , has announced it will stop investing in the tobacco industry.

The international firm pledge to sell investments worth more than €1.8bn (£1.4bn).

It (Other OTC: ITGL - news) said holding stocks and corporate bonds from tobacco companies conflicts with its position as a health insurer.

The insurance giant, which has more than 10 million customers in the UK, says it wants to work with governments around the world to reduce the number of smokers.

It said its role was increasingly about prevention, rather than curing smoking-related diseases, given smoking kills some six million people a year, and the figure is expected to rise to eight million by 2030.

"Smoking poses the biggest threat to public health in the world today," AXA said.

"Its cost, estimated at €2.1tr per year, equals the combined expenses of war and terrorism."

Axa will sell off its shareholdings in tobacco companies, €200m (£155m), immediately.

Axa has €1.4tn of assets under management, so these tobacco-related investments account for just 0.1%.

Thomas Buberl, the deputy chief executive of Axa, and head of its health business, said: "It makes no sense for us to continue our investments within the tobacco industry.

"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.

"As a major investor and a leading health insurer, the AXA Group (LSE: 0HAR.L - news) wants to be part of the solution, and our hope is that others in our industry will do the same.”

Last year Axa announced it was divesting all its coal investments, worth £355m, ahead of the UN talks on limiting climate change . It also pledged to triple its investments in green technology.