The toolkit comprises 12 sections ranging from case studies to human rights. The documents are accompanied by tools and resources to help finance leaders navigate various issues.

Tobacco-free finance pledge

The Tobacco-Free Finance Pledge was established in 2018 by a group of global finance leaders united in their efforts to combat smoking prevalence in society. The Pledge is aimed at committing finance professionals to the creation of tobacco-free investment portfolios. Signatories of the Pledge undertake to refuse investments in tobacco companies, support tobacco control legislation, and promote awareness of tobacco-related harm.

Tobacco-free finance framework

The toolkit offers finance professionals a framework for researching and addressing the various environment, social and governance (ESG) issues arising from investing in tobacco. The framework covers a range of tools and resources available to investors to influence companies in which they invest. The tools include integration of ESG factors, engagement with companies, best of sector investing and exclusion policies. Other important notes on this framework include:

• ESG integration is different from an exclusion policy
• Ratings Agencies use a ‘best of sector’ approach which sees tobacco companies rated only against themselves, potentially distorting ratings.

Prospective investment risks

The toolkit cautions on the potential financial risks resulting from investing in tobacco. Implementation of ESG factors, exclusionary policies and engagement with companies can help mitigate potential risks. Key concerns include legal liability of trustees of pension funds and stranded assets.

Case studies

The toolkit analyses case studies of tobacco-free portfolios to illuminate issues such as investor motivations, implementation, and potential impacts. A case study of AMP Capita documents the reactions of stakeholders to divestment from tobacco, citing changing attitudes, demand for responsible investments, and improved returns.

Common questions answered

The toolkit provides answers to various questions that finance professionals may ask when considering development of a tobacco-free investment portfolio. The answers cover topics ranging from tobacco ESG integration, fiduciary duties, to the challenge of divestment from tobacco companies.

It provides a meticulous list of sources that finance professionals may find useful when researching tobacco-free investment portfolios. The sources range from academic journals, financial news outlets, and tobacco news portals.

Overall, the Tobacco-Free Portfolios toolkit serves as an important resource for finance professionals and investors aiming to contribute to the fight against smoking prevalence in society. Its robust framework provides finance professionals with tools and resources to invest in tobacco-free portfolios. By committing to tobacco-free investment portfolios, finance professionals can significantly contribute to the ultimate goal of reducing smoking prevalence in society.