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As smoking dwindles and anti-smoking laws grow, what happens to investor choices? SBE undergraduates Filip Dobrzynski, Jeroen Schmitz, Fabian Grohmann, Moritz Dillmann and Julian Alves, working under the direction of Professor Rob Bauer, are preparing a scenario analysis of the industry’s future, in a collaboration with Tobacco Free Portfolios, a group which aims to reduce and ultimately eliminate institutional investors’ investment in tobacco stocks.
According to Bauer, who leads SBE’s Sustainable Development research theme, the project came about when he was approached by Bronwyn King of Tobacco Free Portfolios after he organised an International Centre for Pension Management discussion forum in Toronto, Canada. He brought the SBE students into the research initiative, he says, “because it is important to involve the new generation in these societal challenges”.
Bauer expects the report, entitled “The Future of Tobacco: A Scenario Analysis”, to be completed later this year. The study considers risk factors in order to construct a scenario analysis of the future state of the tobacco industry and its stocks.
The students say they “are very happy to be a part of this research project. It is a great way to work on such an interesting topic which gives us the opportunity to really make a change, even though we are still studying.”
The project gives them “the chance to apply our academic knowledge in a very specific practical context. Not only does this give us a great set of skills that we can use during our future careers, but it also gives us access to some very interesting people that we would have never met otherwise.
“As an example, Rob organised a workshop for us in Rotterdam where we learned more about the way that scenario thinking works and how we could use this in our valuation model. Most students don’t have an opportunity of this kind, and we enjoyed it a lot. In addition, all of us are very excited to work on a project whose outcomes could have a significant real-world impact, unlike regular coursework that gets discarded as soon as our supervisors have finished grading it.
“All of us want to have careers in which we have a positive future impact on the world. For instance, some of us are planning to do internships in countries in the developing world later on in our studies. Being able to contribute towards sustainable changes even before we have completed our studies is something we are extremely enthusiastic about.
The students add: “The way we worked on this project was very enjoyable: group work with capable peers under the close supervision of a senior academic, which stimulates the exchange of ideas and visions and is instructive on many levels. Because of its duration and the intensity with which we have focused on the topic, it has been quite different to what we normally encounter during our studies and, furthermore, will prepare us well for future professional work of many kinds.”