In 2001, I was a brand new, shiny doctor, planning to save the world. My first job was working for three months on a lung cancer unit. Nearly all of my patients were smokers or ex-smokers, and most of them had started smoking when they were children or in their early teens. And despite living in a beautiful, wealthy country, with access to the most sophisticated medicines, nearly every single one of my patients died. Everyone knows tobacco is bad, but when you see the impact firsthand, day-by-day, it leaves a very deep impression.
Ten years later, I'm a radiation oncologist, fully aware of the suffering caused by tobacco. I'm sitting at the hospital cafeteria, having my first ever meeting with a representative from my superannuation fund. It was thrilling, I'm sure you can imagine.
(Laughter)
He tells me I'm in the default option. And I said, "Option? Does that mean there are other options?"
He looked at me, rolled his eyes, and said, "Well, there is this one greenie option for people who have a problem with investing in mining, alcohol or tobacco."
I said, "Did you just say tobacco?"
He said, "Yes."
I said, "So, are you telling me I'm currently investing in tobacco?"
And he said, "Oh, yes, everyone is."
When you invest in a company, you own part of that company. You want that company to grow and succeed and thrive. You want that company to attract new customers, you want that company to sell more of its products. And when it comes to tobacco, I couldn't think of anything that I wanted less. Now, I know you can only see one person standing here on this big red dot, on this enormous stage. But instead, I would like you to imagine that you're looking at seven million people crammed up here beside me today. Seven million people across the world have died as a result of tobacco in the past year alone.
Just imagine, if a brand new industry were launched today, and by the end of next June, that industry's products had killed seven million people. Would any of us invest in that new, deadly industry? Tobacco is one of the most pressing global issues of our time, and most of us are far more complicit in the problem than we may realize.
So, the super fund representative explained to me that tobacco companies would be found in the international shares portion of my portfolio. So I asked him, "Well, which international shares do I have?" He got back to me two weeks later with this list: my number one holding in international shares was British American Tobacco. Number two, Imperial Tobacco. Number four, Philip Morris. And number five, the Swedish Match company. Four of the top five companies were tobacco companies, my investments, an oncologist.
And then I realized it wasn't just me. It was all members of my super fund. And then I realized it wasn't just my super fund, it was all of them. And then I realized, it wasn't just superannuation funds, it was banks, insurers and fund managers. And then I realized it wasn't just Australia. It was the entire global finance sector, completely tangled up with the tobacco industry. The industry that makes products that kill seven million people every year. So I started discussing the issue with my superannuation fund, and I've been discussing it ever since.
Finance leaders have many challenging issues to deal with, these days. So I suggest they adopt a framework that clearly articulates why it is reasonable to take a strong position on tobacco. I suggest finance leaders ask a suite of three questions of any company in which they might invest our money.
Question one: Can the product made by the company be used safely? "No" is the answer for tobacco companies. Zero is the only safe number of cigarettes for a human being. It could not be more black and white.
Question two: Is the problem caused by the company so significant on a global level that it is subject to a UN treaty or convention? "Yes" is the answer for tobacco. Indeed there is a UN tobacco treaty that has been ratified by 180 countries. The treaty was created because of the catastrophic global impact of tobacco. The current forecast is that the world is on track for one billion tobacco-related deaths this century. One billion deaths. There's only seven billion of us.
Question three relates to the concept of engagement. Many financial organizations genuinely want to be good corporate citizens. They want to use their shareholder power to sit down with companies, engage with them, and encourage them to do better things. So the question is: Can engagement with the company be an effective lever for change? "No" is the answer for tobacco companies. Engagement with the tobacco industry is futile. The only acceptable outcome would be if tobacco companies ceased their primary business. In fact, engagement with the tobacco industry has never led to less human death.
When we consider that framework, three simple questions, we can see that is reasonable and defensible to take a strong position and exclude investment in the tobacco industry.
In addition to the UN tobacco treaty, there is, in fact, another global treaty that demands that we act on tobacco. In 2015, the UN adopted the Sustainable Development Goals. Now, we're talking about tobacco, and I know you're going to jump straight to number three: good health and well-being. And indeed, ramping up tobacco control regulation is essential if we're going to achieve that goal. However, look a bit more deeply, and you will find that 13 of the 17 goals cannot be achieved unless there is a major shake-up of the tobacco industry. Personally, my favorite goal is number 17: partnerships for the goals. At present, we have the entire global health sector doing everything it can to help the tidal wave of patients suffering as a result of tobacco. But that said, in the past year alone, seven million people have died, so clearly, that is not enough. We also have governments aligned on tobacco, 180 of them, busily trying to implement the provisions of the UN tobacco treaty. But that, too, is not enough. If the global finance sector continues to lend money to tobacco companies, to invest in tobacco companies, and to strive to profit from tobacco companies, we are working against each other.
Now, if we are going to disrupt what doctors call "the global tobacco epidemic," we need every sector of society to stand side by side and be part of the solution. So I call on finance leaders to implement a framework to deal with sensitive issues. And I call on them to uphold global conventions. But in addition, there are business risks. Pure financial risks, associated with being invested in the tobacco industry over the long term, and I ask finance leaders to consider them. The first risk is that fewer and fewer people will smoke, as a result of increasing tobacco regulation.
When these warnings were put on cigarette packets in Canada,
[Tobacco can make you impotent]
the first response of smokers was to give them right back to the salespeople and say, "Could you please just give me the ones that say they'll kill me?"
(Laughter)
Regulation gets noticed, regulation reduces consumption, and we have 180 countries committed to more regulation. Let's talk about litigation and the risk that presents. At present, it's the business model of the tobacco industry that is being challenged.
Currently, the tobacco industry externalizes all of the health costs associated with tobacco. Governments pay, communities pay, you pay, I pay. The tobacco industry externalizes all those costs, with an estimated one trillion US dollars per year. Yet they internalize and privatize the profits. In 2015, in Quebec province, the courts determined that the tobacco industry was indeed responsible for those health costs, and ordered them to pay 15 billion US dollars. That case is under appeal. But it begs the question, why should any of us, in any country, be paying for the costs of the tobacco industry?
Let's move on to supply chain and the risk there. It is not well known that the tobacco industry significantly relies on child labor. In March 2017, the International Labour Organization issued a report which stated: "In tobacco-growing communities, child labor is rampant." The US Department of Labor currently lists 16 countries that use children to produce tobacco leaf. Scrutiny of supply chains is intensifying, and that cannot continue to escape public attention.
Finally, there is also reputation risk to consider for individuals and organizations that continue to maintain an affiliation with the tobacco industry. In countless surveys, the tobacco industry ranks as the world's least reputable industry.
Let's just look at the impact on children. Globally, every single day, it is estimated that 100,000 children start smoking. That's enough children to fit inside the Melbourne Cricket Ground. And most of those children are from the poorest communities on earth. Here in Australia, the average age that people start smoking is 16 years and two months. They look pretty young to me, but the worst thing here is that while we don't have data from every country on earth, we believe that is the oldest age. Everywhere else is younger.
Now for the good news. Things are changing. The finance sector is coming to the party. After around 2,000 meetings with finance leaders, primarily in the cafés of Melbourne and Sydney and London and Paris and New York and all across the globe, momentum, moving away from investment in the tobacco industry, is starting to snowball. Finance leaders are alarmed when they're presented with the facts, and overwhelmingly, they want to be part of the solution.
Here, in Australia, we now have 10,636,101 superannuation accounts that are tobacco-free. That one is mine, by the way.
(Applause)
There is still a lot of work to be done, but I've watched the conversation go from "Should we go tobacco-free?" to "Why haven't we done it yet?" In the past year alone, major tobacco-free moves have been made by leading financial organizations in eight different countries. In Australia, New Zealand, the Netherlands, Sweden, Denmark, France, Ireland and the USA. By sovereign wealth funds, fund managers, pension funds, banks, insurers and reinsurers. Since tobacco-free portfolios began, more than six billion dollars has been redirected away from investment in the tobacco industry. The case study is well and truly proven.
When making the tobacco-free announcement in March this year, the CEO of AMP Capital said, "We are not prepared to deliver investment returns at any cost to society." And that is the question we need to ask ourselves. Is there no baseline standard below which we will not sink to make profit?
Along the way, I've had a lot of help and incredible support. Now, if you're trying to do something, I highly recommend that you have a princess on your team. Her Royal Highness, Princess Dina Mired, is the global ambassador for this work. We also have a lord, a knight, a former premier, a former federal minister and a stack of CEOs.
But the capacity to change things does not rest exclusively with these highly influential people. The power to do that is with all of us. Everyone here can be part of the solution. In fact, everyone here must be part of the solution. Most people in this room own companies via their superannuation funds, their banks and their insurers. And it is time for us to ask them: Are they investing our money in companies that make products that kill seven million people every year? It's your money. It's my money, it's our money. And that is a very reasonable question.
Pretty cramped up here, with seven million people beside me today. But if we don't act now, and act together, we'll need to make way for one billion people before the end of this century. And this is a very big stage. But there is no more room.
Thank you.
(Applause)
