Religious challenge by shareholder actions: changing the behaviour of tobacco companies and their allies

Abstract

Many religious groups refuse to own so-called “sin” stocks in companies associated with alcohol, gambling, or tobacco because they believe they are harmful and can be addictive. A coalition of religious institutions without such portfolio exclusions (“screens”) has developed a strategy for dealing with the tobacco industry and its allies by using their stock to challenge issues through shareholder resolutions. In 1972 the Interfaith Center on Corporate Responsibility was established in New York. It now comprises a coalition of around 300 Protestant, Jewish, and Catholic institutional investors who use their investments to challenge companies on various social issues. Since 1980, members of the coalition have tried to persuade tobacco companies to limit the yields of tar and nicotine in cigarettes sold in developing countries and to add health warnings on their packaging. In the past 10 years, however, the coalition has addressed other issues associated with tobacco, including spinning off a company's tobacco related business, cigarette smuggling, carcinogens, and advertising (for example, the campaign to promote cigarettes with a cartoon character called “Joe Camel”). The coalition has also challenged companies contributing filters or glue for tobacco products, media companies with cigarette advertisements in magazines with a high youth readership, restaurant chains that are not yet smoke free, and health institutions giving preferential rates to non-smokers but which hold tobacco in their portfolios. Although the coalition has had slight success among tobacco companies, it has had most impact on the behaviour of corporations involved discreetly in tobacco. Until challenged, these corporations were quietly benefitting from their part in the tobacco industry. This article discusses the efforts of the Interfaith Center on Corporate Responsibility in the United States. It also briefly reviews the various positions on tobacco by religious denominations and shows how they have used stocks to try to bring about …