RT Journal Article SR Electronic T1 Practical Applications of Do Tobacco Share Owners Finance the Tobacco Business? JF Practical Applications FD Institutional Investor Journals SP 1 OP 6 DO 10.3905/pa.9.3.460 VO 9 IS 3 A1 David Blitz A1 Laurens Swinkels YR 2022 UL https://pm-research.com/content/9/3/1.8.abstract AB In Do Tobacco Share Owners Finance the Tobacco Business?, from the Winter 2020 issue of The Journal of Impact and ESG Investing, authors David Blitz and Laurens Swinkels of Robeco evaluate the role of investors in financing the tobacco industry. Motivated by a sense of moral obligation, many investors are choosing to exclude tobacco stocks from their portfolios. However, it is unclear whether tobacco companies rely on such funds to finance expansion or other business activities. Using a case analysis, the authors determine that tobacco firms typically do not raise capital though incremental equity issuances. Instead, it is cheaper for them to use existing capital or seek funds through the bond market. Therefore, tobacco shareholders are not truly financing tobacco companies or their activities. Additionally, those who divest from tobacco stocks lose the opportunity to vote at shareholder meetings, preventing them from pushing the company toward more sustainable initiatives.