Dutch bank ABN Amro is closing its door to the tobacco industry. As of now the bank will no longer invest in tobacco firms, nor will it accept new clients from the sector.
According to a statement by the bank reported in Trouw, ‘the core activity of the tocacco industry is not compatible with the core values of the bank.’ ‘Current contracts will be honoured but there will be no extensions or new contracts,’ a spokesman said.
The bank is the first systemic bank in the country to turn its back on the tobacco industry. Although the bank’s tobacco investment portfolio is not a large one – its business partners include none of the big tobacco firms – it is thought the decision may force other banks and investment funds to follow suit.
On Tuesday the bank signed an agreement with the Dutch Heart Foundation, which campaigns against the use of tobacco. The foundation is moving half of its capital, some €35m, to the bank which has pledged to help it raise funds and participate in health care projects.
Smoking is the main avoidable cause of illness and death in the Netherlands. Every year some 20,000 people die from the effects of smoking. The bank’s economic research unit has calculated that smoking is costing society €2,000 per head of the population.
The Heart Foundation still has business relations with other banks investing in tobacco, such as Rabobank, ING and Van Lanschot but are currently discussing the matter with them as well.
Heart foundation director Floor Italianer, who praised the bank’s ‘commitment’, told the paper it is ‘sadly ironic and short-sighted’ that civil service pension fund ABP, which is currently investing over €1 billion in the tobacco industry, will not follow in the bank’s footsteps.
The ABP, however, said it will not terminate its investments because it is one of many industries that are perceived as socially undesirable. But according to Italianer the ABP has not understood what the discussion is about.
‘Tobacco is on a par with the arms industry’s cluster bombs which pension funds have stopped investing in a long time ago. This industry knowingly makes a product which kills people prematurely on a big scale. A sector which continues to do that deserves to be banned,’ he told Trouw.
The news comes at the same time as the government clamps down on the sector by minimising the visibility of cigarettes. On Wednesday the health ministry announced that cigarettes must be kept out of sight by 2020, with a ban on cigarette machines two years from then.
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