Tobacco use is the single greatest cause of preventable death in the world. According to the World Health Organization, more than six million people die from smoking every year and another 890,000 die from exposure to second-hand smoke.
In the United States alone, over 480,000 people die annually from smoking-related illnesses. As Vox recently pointed out, “Cigarettes still kill nearly half a million people in the US each year — 15 times the death toll from the opioid crisis. That’s also more than alcohol, car accidents, AIDS, illegal drugs, murders, and suicides combined.”
Given the enormous human and societal costs, I was surprised to learn that the New York State Teachers Retirement System (NYSTRS), the pension system for nearly 265,000 of the state’s public school teachers outside New York City, has been profiting off the misery caused by cigarettes. According to investment documents posted on its website, NYSTRS had almost $665 million invested in tobacco companies as of September 30, 2017.
Here’s a quick breakdown of the retirement system’s tobacco holdings in the third quarter of 2017…
Philip Morris International
Philip Morris International is the largest cigarette company in the world as measured by market share. PMI was a subsidiary of the Altria Group until 2008, when the company was spun-off to focus on cigarette sales outside the United States.
As of September 30th, NYSTRS owned 2,724,698 domestic shares of Philip Morris International stock with a combined market value of $302,468,725, as well as 11,310 international shares of PMI with a value of $1,255,523. In addition, the retirement system’s investment portfolio included PMI corporate bonds worth an additional $22,488,334.
Previously known as Philip Morris Companies, Inc. until a corporate rebranding in 2003, the Altria Group is the largest tobacco company in the United States. Altria’s three subsidiaries – Philip Morris USA, U.S. Smokeless Tobacco Co., and John Middleton – dominate the U.S. tobacco market and are behind such brands as Marlboro cigarettes, Skoal, and Black & Milds.
As of September 30th, NYSTRS owned 3,524,516 shares of Altria stock with a market value of $223,524,805, as well as Altria corporate bonds worth $12,430,592.
British American Tobacco
British American Tobacco is the largest publicly-traded tobacco company in the world. In July, it spent $49.4 billion to purchase Reynolds American, the maker of Newport, Camel, and Natural American Spirit cigarettes.
As of September 30th, NYSTRS owned 1,341,758 shares of BAT stock with a market value of $81,419,262.
UK-based Imperial Brands is the world’s fourth-largest cigarette company and is behind such brands as Davidoff and Gauloises cigarettes and Cohiba cigars.
As of September 30th, NYSTRS owned 441,552 shares of Imperial Brands stock with a market value of $18,862,275, as well as Imperial Brands bonds worth $2,439,999.
It’s safe to say that most NYSTRS members are only vaguely aware of how the system invests their money. I’m also sure most would be shocked (if not horrified) to learn that the pension system has significant positions in companies whose products bring addiction, disease, and death to people around the globe.
With the start of a new year, teachers in the Empire State should resolve to get the New York State Teachers Retirement System to divest from Big Tobacco in 2018.