Smoke & Mirrors
Healthcare Company Retirement Plans are Addicted to Tobacco
EXECUTIVE SUMMARY
According to the World Health Organization (WHO), “The tobacco epidemic is one of the biggest public health threats the world has ever faced, killing more than 8 million people a year around the world. More than 7 million of those deaths are the result of direct tobacco use while around 1.2 million are the result of non-smokers being exposed to second-hand smoke.”¹ Globally, 181 nations and other parties have ratified the WHO Framework Convention on Tobacco Control, which commits them to reduce tobacco’s toll worldwide and specifically recognizes the tobacco industry as a threat to global health.²
Yet, U.S. retirement plans are still heavily invested in this deadly industry. This report analyzes the high exposure of tobacco investments in popular mutual funds that are offered as part of 401(k) retirement plans at many major U.S. corporations— specifically, tobacco exposure in the biggest U.S. healthcare and health-centric companies’ retirement plans.
The results of this study show that retirement plans are still addicted to investing in tobacco. 55% of the 100 most common mutual funds in retirement plans invest in tobacco producers and 72% invest in media companies promoting tobacco use. As of August 31, 2020, these funds invested more than $109 billion in tobacco producers like Altria Group, Inc., and Philip Morris International Inc., as well as tobacco-promoting media companies, such as Comcast Corporation and AT&T Inc.—providing capital to an industry that causes 480,000 deaths every year in the U.S. and eight million deaths worldwide.
Tobacco still thrives in America’s retirement funds. Tobacco investments are even common at companies whose mission is to improve health and healthcare. For example, 10 of the 18 funds offered in CVS Health’s retirement plan have direct investments in tobacco producers, and 11 of these funds also invest in tobacco- promoting media companies. All the top 10 largest healthcare employers, including CVS Health, Pfizer, Abbott Laboratories, UnitedHealth Group, and others, have investments in both tobacco producers and tobacco promoters. These pro-tobacco holdings put their health-protection missions and investment practices in conflict. It is time to align investing with stated values and to be transparent about retirement plan offerings. We ask companies—and specifically the healthcare industry—to become more transparent about their tobacco investments and provide clear options for their retirement plan participants to choose tobacco free investment options.
“Tobacco Fact Sheet,” World Health Organization, accessed May 27, 2020, https://www.who.int/news-room/fact-sheets/detail/tobacco.
“Parties to the WHO Framework Convention on Tobacco Control,” WHO Framework Convention on Tobacco Control, accessed August 10, 2020, https://www.who.int/fctc/en/.