Sunsuper has made the decision to follow the likes of the Future Fund and First State Super and divest its holdings in any company producing tobacco products.

Tony Lally, chief executive of the $22 billion fund, said the decision to cut their investment was made for a number of reasons and no one reason was given any more weighting than another.

“We don’t think it’s in members’ best interests [to invest in tobacco],” he said.

“We don’t think the outlook for the industry is very good.”

Paraphrasing a fund manager, Lally said they didn’t believe in investing in companies that sell products that kill people.

The allocation to tobacco-related stocks in the portfolio was very low and much less than 1 per cent of total funds under management, he said.

“It won’t be noticeable,” he said of the expected overall impact on the fund.

There were some months of discussion by the board before the final decision was made, Lally says, as all participants wanted to make sure the decision was the right one for members.

It was partly made on advice by new ESG consultant, Stewart Wilson, who was appointed to the fund 12 months ago.

Wilson was initially tasked with bedding down regulatory and proxy voting issues within the fund. Now that task has been completed, Lally said there might be other ESG issues that come before the board.

Michael Dwyer, chief executive office of First State Super, said that their decision to divest tobacco stocks mid last year was partly due to heavy lobbying by members at newly merged Health Super but also an issue that the First State board had been considering for a while.

The Future Fund was not available for further comment on the impact of it’s decision to sell out of $222 million in tobacco producing companies, but Dwyer said First State’s decision to do so had been met largely with positive feedback from members and related parties.