The insurance and asset management firm has pledged to sell its equity holdings in tobacco companies immediately – the current estimated value stands at €0.2 billion.

It will also stop all new investments in tobacco industry corporate bonds and is set to run off its existing tobacco industry bond holdings, currently valued at just under €1.6 billion.

The move comes as Axa said smoking posed the biggest threat to public health in the world today and because its role as a health insurer is changing so it’s placing more importance on prevention than cure.

It used statistics from the World Health Organisation to support its decision as data revealed that tobacco consumption kills six million people a year and this figure is expected to rise to eight million by 2030, mostly in developing countries.

Its cost, estimated at €2.1 trillion per year, equals the combined expenses of war and terrorism and is more costly to society than alcohol or obesity.

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‘The human cost of tobacco is tragic’

Thomas Buberl, deputy CEO and incoming CEO 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.

“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.”

UK retail funds

Today’s announcement will not affect funds run by the group’s UK asset management arm.

An Axa Investment Managers (Axa IM) spokesperson said: “At AXA IM our activity reflects the demands of our clients including divestment from tobacco if this is requested by a client for their mandate.

“Our Responsible Investment specific funds already exclude tobacco stocks and we manage a number of segregated mandates where the client has asked us to not invest in companies that derive profit from tobacco.”