Canada’s OPTrust the latest to divest from tobacco after Global Compact exclusion decision

A wave of divestments follow UN body’s move to exclude tobacco makers

Canada’s C$19bn (€12.8bn) OPTrust has announced it is divesting from the tobacco industry – saying there is no safe consumption of tobacco and that engagement with producers is not enough.

It’s the latest in a wave of tobacco divestments from investors including BT Financial Group BT, the wealth management arm of Australia’s Westpac, and TelstraSuper, the super fund for the telecoms firm.

OPTrust said that, by the start of next year, it would be divested from all equity and fixed income investments in public companies that derive a majority of their revenue from production or manufacture of tobacco products.

OPTrust invests and manages one of Canada’s largest pension funds and administers the OPSEU Pension Plan, a defined benefit plan with almost 90,000 members and retirees

“At OPTrust, we prefer to use corporate engagement – the promotion of better business practices – in our investment and ownership practices,” said Hugh O’Reilly, OPTrust President and CEO.

“However, there is no such thing as a safe level of consumption of tobacco products. They cause only harm. As a result, investments in tobacco do not align with our responsible investing principles.”

It follows a new exclusion for tobacco companies at the UN Global Compact, the UN’s corporate sustainability body, in which it said tobacco is in “direct conflict” with UN goals, particularly with the right to public health, and undermines Sustainable Development Goal 3 (healthy living/well-being).Tobacco has been removed as an industry category and companies such as Philip Morris International are no longer listed as members. The Global Compact move puts tobacco on the same level as cluster munitions or landmines.

“Investments in tobacco do not align with our responsible investing principles”

Campaigners welcomed the OPTrust move, with Tobacco Free Portfolios’ CEO Bronwyn King saying she was “thrilled” at the news.

“This sets a new standard amongst Canadian financial institutions and will inspire others to follow suit. As an oncologist, I’m fully aware of the devastating impact of tobacco.”

Earlier this month, BT Financial Group announced it would dump investments in tobacco and “controversial” weapons – including cluster munitions, anti-personnel mines and biological and chemical weapons – from its flagship superannuation products as part of a revised responsible investment position statement.

And TelstraSuper said recently: “We take sustainability issues very seriously when investing your money and we regularly review our policy to ensure it reflects changing circumstances. For example, in a recent review of our Sustainable Investment Policy, we decided to divest from shares in tobacco producers.”