AP4 supports UN-initiative that calls on finance industry to tackle 'tobacco epidemic'

During 2016 AP4 made a business decision not to invest in tobacco companies, since we anticipate that rising long-term risks will have a negative effect on tobacco company valuations in the future. Now, AP4 joins the initiative Tobacco-Free Finance Pledge that aims to highlight financial institutions that have implemented tobacco-free finance polices and encourage others to do the same.

The initiative is launched by the UN together with Tobacco Free Portfolios, an organization lead by the Australian physician Bronwyn King. The initiative is supported by more than 130 investors representing more than $5 trillion in assets under management. Founding signatories include AP4, together with ABN-Amro, Ontario Teachers’ Pension Plan, Aegon, AustralianSuper, BNP Paribas and ING.

AP4 is a supporter of the UN’s long-term global sustainability goals. AP4's view is that the long-term risks associated with tobacco consumption counteracts the UN's long-term goal of ensuring health and well-being - a view AP4 expects more and more investors will share in future.

- We have made the business decision not to invest in tobacco companies because we believe that rising long-term risks posed by greater regulation, among other things, will have a negative effect on tobacco company valuations in the future. These are risks that are determined to be incorrectly factored in today, and shares in tobacco companies are considered to be overvalued. Over time, tobacco companies therefore risk performing below the index, says Niklas Ekvall, CEO at AP4.

- Thus far, AP4’s business decision to not own shares in tobacco companies has made a positive return contribution. By joining this initiative, we hope that we can inspire others that it is profitable to integrate sustainability aspects into the investments, concludes Niklas Ekvall. 

 

For more information, please contact:

Tobias Fransson, Head of Strategy & Sustainability
+468-787 75 28
tobias.fransson@ap4.se

Published Friday, November 9, 2018