Axa, a French insurance company with total assets exceeding $616 billion, announced it will stop investing in the tobacco industry. The company also said it will sell its nearly $1.9 billion in tobacco investments.
Axa’s relationship with tobacco companies, an industry worth an estimated half a trillion dollars according to the Tobacco Atlas, is ending because the insurer said “it makes no sense” to invest in an industry that takes just short of 500,000 Americans’ lives annually — a figure that includes deaths related to secondhand smoke.
The insurance company is also responding to a High Court challenge in the U.K. where tobacco companies suffered a blow involving cigarette packaging. The case against four of the largest tobacco firms — Philip Morris, British American Tobacco, Imperial Tobacco and Japan Tobacco — went in favor of the British government, which is pursuing a generation where children would “grow up smoke-free,” the BBC reports.
Following the court decision, tobacco companies have one year to change all of their cigarette packaging to an unattractive olive green color. The packages must have large, unappealing images covering at least 65 percent of the box to serve as health warnings for potential consumers. Promotional labels downplaying the impacts of cigarette smoke will also be disallowed.
“The business case is positive,” said Axa’s soon-to-be CEO Thomas Buberl. “It makes no sense for us to continue our investments within the tobacco industry. The human cost of tobacco is tragic — its economic cost is huge.”
Buberl told the Guardian that, as a large provider of health insurance, investing in an industry that causes chronic disease and illness is rather counterproductive.
The court’s decision to up tobacco advertising standards is the latest in a U.K. government that has proven to prioritize smoking legislation. The Children and Families Act 2014 was implemented to prevent adults from smoking with children in the car. On a significantly more strict level, the Health Act 2006 banned smoking from areas found to be “substantially enclosed” and public places throughout the United Kingdom.
Image courtesy of ASH