Caisse des Dépôts excludes the tobacco industry from its socially responsible investments

Like Axa, Crédit Agricole and CNP Assurances, the Caisse des Dépôts group has excluded the tobacco sector from its socially responsible investments (SRI). Initiated in Australia by Tobacco Free Portfolios, this awareness is gradually spreading to the financial sector but is struggling to establish itself in the French SRI benchmark.

Socially responsible investment (SRI) is a label that applies the precepts of sustainable development to financial investments.[1]. It is awarded to companies with a good rating for their ESG criteria, which precisely measure the consideration of environmental, social and good governance issues. Companies with a high ESG rating have indeed established themselves as those that display the best long-term financial performance and are not solely guided by short-term profits.

A fundamental trend among major financial players

Since 2015, the Caisse des Dépôts group has been committed to an SRI policy and has immediately excluded the tobacco industry in order to respect France's commitments to the Framework Convention on Tobacco Control (FCTC). The 2021 report on this activity, which has just been published[2], reaffirms the exclusion of the tobacco industry from its investments, in the same way as companies in fossil fuels (oil, gas, coal), anti-personnel mines and cluster bombs.

Other large financial groups have made similar choicesIn 2016, insurer Axa formed a coalition of investors in a movement to divest from the tobacco industry.[3]. The subsidiaries of Crédit Agricole and Société Générale dedicated to wealth management are associated in the Amundi group for the management of their SRI assets and also exclude the tobacco sector. BNP Paribas adopted this position in 2017 and sold its assets in the tobacco sector[4]By taking control of CNP Assurances in June 2022, La Banque Postale is now participating in this movement.[5]. Crédit Coopératif stands out for having also included the gambling industry in the list of sectors where investment would be inappropriate. SFIL, a public refinancing bank, has for its part added the fur and pornography industries to those of tobacco, fossil fuels and unconventional weapons, in the list of sectors excluded from investments.

Call to institute the exclusion of the tobacco industry from the SRI label

The non-governmental organization Tobacco Free Portfolios (TFP), which initiated this financial accountability on the issue of tobacco in Australia, signed a partnership in May 2020 with the Alliance Against Tobacco (ACT), as part of the DETAF project (Denormalization of Tobacco in France). The ACT subsequently conducted, from September 29 to October 7, 2022, on the occasion of Responsible Finance Week, an awareness campaign aimed at the general public and decision-makers to alert them to the SRI label[6]For its part, in 2021, the National Committee against Smoking (CNCT) awarded the 5.3 transparency prize to the consulting firm Axylia, specializing in responsible finance, for its contribution to the denormalization of tobacco.[7].

The CNCT and ACT have repeatedly pleaded with the government that the exclusion of the tobacco sector be expressly integrated in the next update of the SRI framework, scheduled for the end of March 2023, without having been heard for the moment. Awarded by the Ministry of the Economy, this label does not yet systematically exclude investments in the tobacco industry, the most aware companies having voluntarily initiated this approach. The real application of the Framework Convention on Tobacco Control (FCTC) and the desire to achieve a Tobacco-Free Generation by 2032 should nevertheless impose this type of measure.

These initiatives are likely to worry the tobacco industry, which is constantly seeking to reassure its shareholders in the face of the uncertainty of the tobacco market and its diversification strategy. Despite the tobacco companies' speeches about their non-smoked products (electronic cigarettes, heated tobacco, oral forms of nicotine), their financial reports discreetly specify that smoked tobacco remains by far their primary source of dividends.[8]Tobacco manufacturers are also increasing their corporate social responsibility (CSR) actions, hoping to make people forget that smoking is the cause of 8 million deaths worldwide each year, and of an even greater number of people suffering from all types of illnesses.

Keywords: SRI, Caisse des Dépôts, Tobacco Free Portfolios

©Generation Without Tobacco

MF

[1] What is SRI?, Ministry of Economy, Finance and Recovery.

[2] Responsible investment report 2021, Caisse des Dépôts Group, November 2022, 82 p.

[3] Alvarez C, Smoking can seriously harm your investment, Novethic, published June 21, 2017, consulted February 7, 2023.

[4] AFP-Novethic, BNP Paribas gives up financing tobacco companies, Novethic, published on November 27, 2017, consulted on February 7, 2023.

[5] Guegneau R, After the success of the takeover bid for CNP, La Banque Postale is ready to accelerate, Les Echos, published June 3, 2022, consulted February 7, 2023.

[6] ACT-Alliance against tobacco, Let's stop funding the tobacco industry, accessed February 7, 2023.

[7] CNCT, The 5.3 Awards, For public policies without tobacco and without lobbying, accessed February 7, 2023.

[8] Philip Morris International, 2021 annual report, 152 p.

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