National Employment Savings Trust, London, is divesting from all tobacco investments, a spokesman said.
The defined contribution multiemployer trust currently has £40 million ($50.8 million) invested in tobacco across its portfolio. It has set a target of two years for the portfolio to go tobacco-free but anticipates full divestment will occur before the deadline.
This decision was made after NEST concluded that tobacco would generate poor long-term returns due to stricter global regulations against tobacco products, increasingly aggressive legal action by governments against the tobacco industry and declining smoking rates globally.
"In our opinion, tobacco is a struggling industry (that) is being regulated out of existence," CIO Mark Fawcett said in a news release.
NEST had £6 billion in assets as of June 1.
