France’s ERAFP Completes Tobacco Divestment

$36.1 billion pension complies with Tobacco-Free Finance Pledge.

ERAFP, France’s €33 billion ($36.1 billion) pension fund for civil servants reported that it has completed its withdrawal from tobacco investments.

ERAFP signed the Tobacco-Free Finance Pledge, which was launched in 2018 by the United Nations, and created by Bronwyn King, an oncologist and CEO of Tobacco Free Portfolios.

“The absence of tobacco companies in ERAFP’s portfolios results from the rigorous implementation of the criterion … to evaluate the societal consequences and the cost of the production of tobacco for the public health,” Laurent Galzy, CEO of ERAFP, said in a statement. 

The Tobacco-Free Finance Pledge has 93 founding signatories, and 36 supporters representing more than $5 trillion in assets under management. Founding signatories include ABN-Amro, Ontario Teachers’ Pension Plan, Aegon, Swedish pension fund AP4, AustralianSuper, BNP Paribas, and ING, among other institutional investors.

The goal of pledge is to persuade the finance sector to be proactive in addressing and de-normalizing financial and corporate associations with tobacco companies. The UN pledge defines tobacco companies as any company that manufactures complete tobacco products, regardless of how much of a company’s overall operations it accounts for.

According to the World Health Organization, the United Nations’ international health arm, tobacco is the leading cause of avoidable death in the world, and Tobacco Free Portfolios says tobacco kills 8 million people a year.

“Global public health improves dramatically with the participation by the finance sector in the withdrawal of credit and investment from tobacco companies,” said King in a statement. “As governments continue to roll out the UN Tobacco Control Treaty, the finance sector’s participation is accelerating the achievement of the sustainable development goals to reduce the death toll from tobacco related illness.”

Since ERAFP’s inception in 2005, the fund has focused on socially responsible investing (SRI) principles. ERAFP’s SRI Charter is based on five values: respect for the rule of law and human rights; social progress; social democracy; environment; and standards of governance and transparency.

ERAFP has more than 4.5 million beneficiaries, and approximately 44,000 employers and nearly €2 billion in annual contributions. As a mandatory points-based pension scheme, it has been managing supplementary pension benefits for French civil servants in state-run bodies, local authorities and public hospitals since 1 January 2005.


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