BNP Paribas will stop financing and providing advisory services to all those industries that derive the majority of their revenues from tobacco. The bank announced the decision at the end of November, through a statement in which it clarified that it will honour existing contractual agreements, but will from now on block transactions and investments in the sector and gradually sever its ties with Big Tobacco. BNP Paribas – Bloomberg notes – has not disclosed its current exposure, nor the expected impact of this decision on its revenues. In the past, several sources who prefer to remain anonymous revealed to Bloomberg, the credit institution is said to have worked with British American Tobacco, Imperial Brands and Philip Morris.

All the banks that have said goodbye to tobacco

BNP Paribas's decision will make waves, but fortunately the French banking giant is not the first to have said goodbye to a sector that has such a dramatic and severe impact on our health. Over the past year, according to the Financial Times, Big Tobacco has already "lost" investments worth $4 billion. The insurance company Axa had been the first in Europe, in May 2016, to join the appeal of the Global Taskforce for Tobacco Free Portfolios, pledging to divest from shares (worth around €200 million) and bonds (worth around €1.6 billion, which will be wound down over the coming years). Bank of New Zealand also made the same decision in spring 2017: in addition to tobacco, it will no longer invest in cluster munitions, anti-personnel mines or nuclear weapons.

Of course, one could argue that it is still far too little. That it is inexplicable how, with the exception of these few cases, many major names in global finance continue to do business with such a controversial sector. But there is an explanation, and it is all too straightforward. Despite all ethical considerations, and despite its future being far from certain, tobacco for now remains a profitable business.

A year of change for BNP Paribas

BNP Paribas made its mark in the world of responsible finance when, in October 2017, it announced it would stop all financing of shale oil and gas and tar sands, pipelines and Arctic drilling. At the same time, it committed to supporting renewables and startups specialising in energy efficiency, as well as to being more ambitious on green bonds. For the future, the bank has promised to withdraw financing from coal mines and coal-fired power plants. BNP Paribas, Bloomberg points out, currently remains exposed to ethically sensitive sectors, such as defence, nuclear and palm oil, which are governed by specific internal policies.