Advancing Tobacco-Free Finance Policies in the USA
In 2022, Tobacco Free Portfolios (“TFP”) committed to expanding their global work to galvanize the U.S. marketplace in championing tobacco-free finance through an entirely new approach. By establishing a presence in key locations across the United States TFP will 1) develop an advocacy campaign, (2) increase the committed assets under management to the Tobacco-Free Finance Pledge by at least $3 Trillion, and (3) engage with at least 20% of the leading U.S. financial institutions and endowments as part of their ESG efforts to address health equity.
Tobacco Free Portfolios (“TFP”) offers an entirely new approach to combat Big Tobacco – by systematically eradicating sources of capital and eroding social license to operate. TFP’s strategy for doing so now focuses on capacity building in the U.S
which is by far the largest and most important financial market. By establishing a presence in key locations across the United States with fully staffed teams, the primary goals to be accomplished by December 2023 are to (1) increase the committed assets under management to the Tobacco-Free Finance Pledge by at least $3 Trillion, and (2) engage with at least 20% of the leading U.S. financial institutions and endowments.
Both objectives can be achieved by leveraging TFP’s already extensive network of healthcare, tobacco control, and financial sector contacts to create broad reaching awareness of the importance of tobacco-free finance. TFP staff members will participate in key financial conferences as speakers and panelists. Additionally, the TFP team will host a series of high-level, private roundtables engaging with key financial leaders and institutional investors on the rationale, common challenges and practical solutions that should be considered when contemplating tobacco-free finance.
As TFP continues to educate the financial sector on the overwhelming financial, regulatory, and sustainability risks inherent in doing business with Big Tobacco, the organization repeats the cycle of recruiting new leaders to become advocates and supporters of the TFP mission by committing to move capital and social license to operate away from Big Tobacco.
Implementation for this commitment includes monthly, quarterly, and annual engagements. Monthly engagements consist of 1:1 meetings with supporters who facilitate introductions as well as high-level appointments, both virtual and in person, with executives of financial institutions. The TFP U.S. team members collectively average at least 100 meetings per quarter.
Quarterly engagement consists of invitations to speak and attend financial, health and tobacco control conferences. The TFP U.S. team members typically average six conferences per quarter.
Annual engagement consists of TFP hosted events and private roundtables at least twice per year. These independent events are typically coordinated with other major conferences or events in the United States, such as the World Bank Annual Meetings in Spring and Fall.
Tobacco-related illnesses are the world’s number one cause of preventable death, killing an estimated 8 million people per year – including 1.2 million non-smokers. This is a cross-cutting issue that negatively impacts the health of children and families, poses a threat to labor and human rights, and causes harmful environmental outcomes.
Unless we change course, it is estimated 5.6 million children alive today in the U.S. will experience a premature death from tobacco use. 1.3 million children under 14 years old are engaged in tobacco farming worldwide, thus reducing access to education, a major social determinant of health. Further, the lack of policies around child labor in tobacco farming leaves children exposed to both nicotine poisoning and hazardous worker conditions. Children as young as 12 are legally allowed to work in tobacco fields in the U.S. This along with other smoking-related illness costs an estimated $320 billion each year in the U.S.—of which, $170 billion goes towards direct medical care.
Not only does tobacco create a barrier to health for children and families, it also disproportionately impacts black and low-income communities. Health and wellness disparities, such as African Americans being more likely to die from tobacco related diseases than any other group, makes the financing of tobacco products a racial and social justice concern.
Regarding environmental damage, cigarette filters have become the most littered item on the planet and the most abundant form of ocean plastic. Indeed, 5% of deforestation in low- and middle-income countries is attributed to tobacco farming and is globally responsible for approximately 20% of annual increases in greenhouse gas emissions.
Tobacco Free Portfolios advocates for and supports the efforts of the world’s leading financial institutions as they transition away from tobacco in their lines of business and investments, ultimately bringing an end to Big Tobacco.
Since making the commitment in September 2022, Tobacco Free Portfolios (“TFP”) has engaged with dozens of financial institutions and allocators across the U.S. to advance the Tobacco-Free Finance Pledge and advocate for its implementation. TFP has further developed its advocacy work by increasing awareness of tobacco’s financial and environmental risks along with its more well-known public health risks by speaking at key financial conferences and webinars across the U.S. TFP has also collaborated with environmental organizations such as The Sierra Club and earthday.org to bring attention to tobacco product waste and the plastic pollution the tobacco product lifecycle causes.
TFP welcomed two new Board members since making its commitment: Gary Reedy, former CEO of American Cancer Society and Barry McInerney, former President and CEO of Mackenzie Investments. TFP believes their expertise in public health, finance, and philanthropy will provide strong support in achieving the ongoing commitment.
An unanticipated shift has occurred in the U.S. since TFP’s initial commitment. That is, the politization of sustainable or “ESG” finance, which tobacco-free is often associated with. What had previously been a tailwind – massive interest in sustainability across the U.S. – has become a temporary headwind. While organizations remain committed to becoming Pledge Signatories and embracing tobacco-free finance, some implementation timelines have been extended.
To scale the organization’s impact in the United States, the funding request is $1.5 million per year in year one and $1 million per year thereafter, granted over a period of five years. While grateful for the support and guidance from Truth Initiative, Campaign for Tobacco Free Kids, American Lung Association, and American Cancer Society, TFP would benefit immensely from engaging with additional organizations and philanthropists whose missions align with health equity, racial/social justice, and climate change. In the interest of seeing many lives saved from the impacts of tobacco, TFP would like to seek resources and/or services from the CVS Health Foundation, The Sierra Club, Bloomberg Philanthropies, The Bill and Melinda Gates Foundation, and MacKenzie Scott.
Funding will be allocated towards capacity building, including staffing and personnel contracts, event travel, project expenses, and administrative and operational support. TFP is also seeking media support to mainstream efforts and gain high level introductions within the financial community
Tobacco Free Portfolios has developed bespoke resources for outreach in the United States, particularly through its Pledge Stamp Membership Program. These resources include the TFP Toolkit, access to Research Reports, co-hosted webinars with supporting organizations, YouTube videos to highlight tobacco’s impact on the UN sustainable development goals, informative newsletters, participation in podcasts and draft letters for financial institutions to utilize.