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Divestment of tobacco industry funds

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Who undertook action: Various groups and individuals including Northeastern University Law School's Tobacco Divestment Project, Harvard's Advisory Committee on Shareholder Responsibility, CUNY Trustee Edith Everett, Public Interest Investment Advisory Committee at Johns Hopkins , et. al.

Type: Academic organizations, tobacco control advocates

Size: small number of groups

Years: 1989-2001

Scope: Medical schools in U.S.

Targeted companies: All

Focus of action: Getting tobacco stocks out of medical school portfolios

Concurrent events: American Medical Association divested tobacco holdings in 1986 and urged others to follow; responsible investment shareholder movement gathered momentum; state attorneys general lawsuit identified industry as responsible for disease; South Africa apartheid divestment movement was a model for this action

Industry behavior change sought: None, medical schools pressured not to profit from tobacco

Smokers / smoking a focus? No

Main strategy: Presenting ethical arguments to decision makers

Supporting strategies: Publicizing successful divestment outcomes

Well-funded? No

Breadth of campaign: Advocates attempted to get university trustees to divest, mainly relying on moral arguments

Evidence of effectiveness: Mixed, 6 of 12 leading medical schools divested between 1989-2001

Industry response: Used personal networks to attempt to influence decision makers at universities; used implied threat of withholding grants; when divestment became reality, used influence to minimize publicity about it; industry very concerned that divestments by medical schools would amount to a censure of the industry and further isolation.

Resolution: Divestment movement waxed and waned.

Industry gains/losses: Industry was concerned about being delegitimated by divestment, but most often was able to minimize public awareness of successful divestment policies.

Community gains/losses: When public was aware of divestment, dialogue about dangers of tobacco was promoted and industry was further delegitimated; when institution was silent about having divested, opportunity for dialogue and ethical leadership was squandered.

Good for tobacco control? Yes, isolates industry as vector of tobacco disease and death

Observations: Divestment is an important tobacco control tool, and most often requires sympathetic allies in high places; medical schools are sensitive to charges from advocates about health concerns and hypocrisy; divestment must be publicly visible to have an impact

Links: Selling off or selling out? Medical schools and ethical leadership in tobacco stock divestment


Who undertook action: Various individuals including Calif. Health and Human Services Director Kenneth Kizer, Calif. State Treasurer Phil Angelides, North Dakota's Preventive Health Section Director Stephen McDonough, et. al.

Type: Elected or appointed office holders and health officials

Size: Small, mostly individuals in different venues

Years: Beginning in 1990

Scope: States and municipalities in U.S.

Targeted companies: All

Focus of action: Getting tobacco stocks out of government portfolios

Concurrent events: Rise of socially responsible invester movement; increasing litigation against tobacco companies; increasing emphasis on tobacco industry delegitimization as tobacco control strategy

Industry behavior change sought: None, government funds pressured not to profit from holding tobacco stocks

Smokers / smoking a focus? No

Main strategy: Emphasizing ethical disconnect in profitting from a health-destroying product

Supporting strategies: Arguing that tobacco stocks are also fiscally risky in a climate of lawsuits against the industry

Well-funded? Yes, government officials advocated policy changes

Breadth of campaign: Advocates sparked dialogues about inappropriateness of tobacco holdings; some public officials took action

Evidence of effectiveness: Mixed, 7 states divested between 1996-2000; attempts in at least 18 other states failed

Industry response: Argued that fiscal responsibility trumped social concerns; devoted many resources to influencing divestment movement including gathering intelligence, organizing resources and shaping external environment including promoting laws banning the consideration of social concerns in managing government funds

Resolution: Mixed, most jurisdictions did not divest; some states passed laws making it difficult to ban tobacco stocks in government portfolios; some states currently reconsidering divestment decisions

Industry gains/losses: Industry held off divestment in most areas; divestment threatened share values and portrayed industry as illegitimate

Community gains/losses: Industry was further delegitimated when divestment achieved; media coverage fueled dialogue about tobacco-caused disease

Good for tobacco control? Yes, successful divestment policies isolated and delegitimized industry

Observations: Divestment of government funds is an important tobacco control tool and most often requires sympathetic allies in high places; grass roots advocates are limited in influencing this strategy; industry very concerned about being harmed by divestment

Links: Fiscal versus social responsibility: How Philip Morris shaped the public funds divestment debate