The world’s largest insurer, AXA, is ditching tobacco assets worth $2 billion. The company says it can no longer invest in an industry that kills six million people per year.
The company is selling 224 million euros ($250 million) worth of stocks in tobacco companies immediately. The French insurer, the world’s largest by non-banking assets, will also stop buying bonds issued by tobacco companies.
The company said in a statement that tobacco use is a major cause of long-term non-infectious diseases including cancer, heart disease, and chronic respiratory illnesses which account for 68% of all deaths worldwide.
AXA IM, the company’s investment business, won’t ban its customers from putting their money into tobacco.
Tobacco is responsible for approximately 6 million deaths per year, according to the World Health Organization. Those deaths include nearly 600,000 people who are exposed to second-hand smoke.
AXA warned that the situation is getting worse, with tobacco expected to kill 8 million people a year by 2030, mostly in developing countries.
“As a major investor and a leading health insurer, the AXA Group wants to be part of the solution, and our hope is that others in our industry will do the same,” said Thomas Buberl, Axa’s deputy CEO.
Tobacco in recent years has been ditched by many investment firms, mostly at the state pension fund level.
The MSCI World Tobacco Index, which tracks the biggest companies in the sector, gained 10% between January and the April, after rising by 18.6% in 2015.
Tobacco companies are often buoyed by the promise of large dividend payments that are attractive to investors.