Australia’s €27bn First State Super excludes tobacco from all portfolios

First State Super, at $32bn (€27.2bn) in funds under management one of Australia’s largest superannuation funds, has excluded all tobacco investments.
The 770,000-member fund, which is a signatory to the United Nations-backed Principles for Responsible Investment (UN PRI), announced it has excluded investments in all companies involved in the manufacture of cigarettes and other tobacco products from its entire 12-option investment range.
The decision builds on an existing tobacco exclusion that has been a socially responsible option for the past eight years for members of Health Super, the health and community fund that merged with First State last year.

First State was initially established in 1992 to provide superannuation benefits to New South Wales government employees, but is now open to anyone.

“The Trustee Board decided to extend the exclusion of tobacco investments across all our portfolios following strong feedback from health employers and those working in health services who represent 40% of our total membership,” said Chief Executive Michael Dwyer.The board was “cognizant” of Australia’s national and state policies aimed at cutting tobacco use. Dwyer said: “Our decision reflects both the strong views expressed by our employers and members and our support for government initiatives to minimise tobacco consumption.”

The decision was welcomed by the fund’s health care sector members.

“Inconsequential financial impact”

“On behalf of my colleagues and our patients, I applaud First State Super for breaking the mould with this decision,” said Dr Bronwyn King, Radiation Oncologist at the Peter MacCallum Cancer Centre in Melbourne.

Dwyer said that the exclusion would not compromise returns: “Our analysis shows there will be inconsequential financial impact from this decision for members’ investment returns.” The exclusion was “unquestionably the right thing to do”.

First State’s SRI options will continue to be available to members.