Divesting from tobacco has had a negligible impact on returns, the Fund Executives Association Limited annual conference heard in a speech from a leading anti-smoking campaigner.
Dr Bronwyn King, radiation oncologist at the Peter MacCallum Cancer Centre and Epworth Healthcare, said the analysis carried out by some of the 10 large superannuation funds that had already divested showed there was little or no fiduciary conflict for trustees.
She estimated the amount invested by super funds in 59 tobacco companies worldwide as $7 billion, though she pointed out that this had stood at $8 billion before the 10 super funds divested.
She added that unlike other industries in which engagement over unethical business practices had been successful, there was no such option for tobacco companies.
“It is not possible to engage with an industry whose product will kill half of all users.”
Other reasons King, pictured right, gave for divesting were the rising risk of legislation and litigation, especially in the developing world.
A further point in her presentation was that many members were unaware that their super was invested in tobacco companies. Furthermore, less than half of socially responsible investment-choice options excluded tobacco.
King, who treats cancer patients in Melbourne, started her campaign to encourage super funds to divest after discovering her own super fund was investing in tobacco companies.