Tobacco is the largest cause of preventable death in the UK, claiming over 100,000 lives every year. It is responsible for at least 90% of deaths from lung cancer, chronic bronchitis and emphysema, and it is a factor in over 20% of all deaths from heart disease. A decline in adult smoking and fears about the effects of ‘passive’ smoking in particular, have encouraged smoking to be banned in many public areas such as pubs, restaurants, offices and on public transport.
The tobacco market is still a significant size and is open enough for further product proliferation. Tobacco companies have come under criticism for promoting their highly addictive products to vulnerable people in developing countries. Although cigarette prices have risen following government attempts to reduce smoking by increasing duty on tobacco products, new brands have continued to appear on the market, and cheaper ‘own-brand’ cigarette sales are on the increase.
It is possible to use negative screens to avoid investing in companies that produce or sell tobacco. It is possible to focus only on tobacco producers, or apply materiality thresholds to exclude only those companies that derive a particular proportion of their turnover from tobacco. Tobacco is the most common negative screen used by common investment funds and other pooled investment funds.