Insurer and investment company, AXA, has taken the decision to stop investing in tobacco companies, due to the public health risks of smoking.

AXA said that as a responsible investor and health insurer it had considered that increasingly healthcare was about prevention rather than cure and with smoking being the greatest risk to public health in the world today it made sense to divest its tobacco industry assets valued at €1.8bn. The company said it would sell its shares, worth €0.2bn immediately and stop all new investments in tobacco industry corporate bonds and run off its existing tobacco industry bond holdings, currently valued at just under €1.6bn.

Thomas Buberl, deputy chief executive and incoming chief executive of AXA, said "We strongly believe in the positive role insurance can play in society, and that insurers are part of the solution when it comes to health prevention to protect our clients. Hence, it makes no sense for us to continue our investments within the tobacco industry. With this divestment from tobacco, we are doing our share to support the efforts of governments around the world. This decision has a cost for us, but the case for divestment is clear: the human cost of tobacco is tragic; its economic cost is huge. 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."

AXA has developed a responsible investment (RI) policy, which covers the company's €552bn general accounts, sets out its position and beliefs on RI, and defines the corporate governance practices that its asset managers are expected to encourage, including via engagement and voting as an investor. In 2015, AXA decided to reduce its exposure to companies with a high involvement in coal-related activities including coal mining and electricity production. This represented a divestment of almost €500m euros and helped, AXA said, to reduce its portfolio risk and to develop an approach more consistent with AXA’s corporate responsibility strategy towards climate change. At the same time AXA has pledged to triple its “green” investments in its general account assets to more than €3bn by 2020.