The groups vowed to divest from a raft of major tobacco firms by the end of this year.

First State Investments and Colonial First State Global Asset Management – in the process of being sold by its Australian parent to one of Japan’s main financial groups - has pledged to cease investing in tobacco companies. Any existing holdings will be sold by the end of this year.

The group, which oversaw $143.8 billion as at the end of December last year, said it will not invest money in debt or stock issued by tobacco firms. The move is similar to the position taken last year by BNP Paribas Asset Management. 

FSI/CFSGAM – being sold by Commonwealth Bank of Australia to Japan’s Mitsubishi UFJ Trust and Banking Corp – said they support the World Health Organisation Framework on Tobacco Control adopted by the World Health Assembly and signed by 180 countries.

The following firms will be affected by the change:  Philip Morris International; Altria Group; British American Tobacco; Imperial Brands; Japan Tobacco; ITC; KT&G Corp (Korea Tobacco); Swedish Match; Gudang Garam; HM Sampoerna; British American Tobacco MY; Eastern Company; Al Eqbal For Investment; Ceylon Tobacco Co.

This move is an example of the trend of Socially Responsible Investment, aka SRI, which has become an increasingly visible topic in the wealth management world in recent years. SRI takes a number of forms, such as screening out activity deemed unacceptable, such as tobacco, firearms, gambling and those involving fossil fuels, or actively seeking to pressure firms to change their products and services to suit SRI ideas.

Public policy on tobacco in many countries, such as the US and European Union, has seen widespread bans on smoking in public places, requirements on tobacco firms to clearly label health warnings on merchandise, as well as heavy taxes and bans on advertising. (Objections from campaigners who say these rules treat adult citizens like children have been largely brushed aside.) Australia, for example, recently forced suppliers to put cigarettes in plain packages without brands. This week, a research study found that 59 per cent of Australians (eight out of 10) don’t think plain packaging is effective in curbing use. The survey of 2,097 Australian citizens was conducted by Japan Tobacco International.