Financial services company Robeco, which manages hundreds of billions in assets, is excluding tobacco industry investments from its mainstream Robeco funds as well as sub-advised funds, the company announced in March.
The company previously limited the exclusion of such investments to its Sustainable fund range, but as the tobacco industry is, by Robeco’s account, “increasingly seen as socially disadvantageous,” the company has decided that it’s time to extend the exclusion to their mainstream and sub-advised funds.
Client-specific funds and mandates are currently exempt from the exclusion.
This exclusion is applicable to companies that are involved in the production of components deemed significant to the manufacturing of cigarettes, which, of course, includes tobacco production companies.
According to Robeco, their exclusion of tobacco stocks should be finished by the end of August of this year (Q3 2018).
The move to exclude tobacco stocks from the company’s mainstream and sub-advised funds comes as a result of the company’s stated commitment to Sustainability Investing (SI). As such, the company has concluded that “engagement with the tobacco industry will not lead to fundamental change,” which is why it has deemed tobacco industry investments as “no longer compatible” with their commitment to SI.
“The tobacco industry is increasingly seen as socially disadvantageous. In 2017, the UN Global Compact excluded tobacco companies from participating in the initiative. Although Robeco takes its responsibility as a shareholder seriously and actively engages with companies it invests in, engagement with the tobacco industry will not lead to fundamental change. Therefore, for Robeco, investing in tobacco is no longer compatible with the company’s commitment to SI.”
By Robeco Head of Investments Peter Ferket’s account, the company thinks that “the time is ripe for excluding tobacco.”
“Robeco has been at the forefront of SI since the 1990s and sees sustainability as a long-term force for change in markets, countries and companies. Given the significant international concerns about the risks posed by tobacco and in view of recent developments, such as the UN Global Compact’s decision, we think the time is ripe for excluding tobacco.”
What do you think of Robeco’s decision to expand the range of their tobacco stock exclusion as far as their investment funds are concerned?
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