AMP Capital is to snuff out its investment in tobacco manufacturing companies including millions of dollars invested through its KiwiSaver funds.
The move is part of a decision to pull out of tobacco investments worth A$440 million across its global investment portfolio.
The asset manager will also pull its Australian investments out of cluster munitions, landmines, biological and chemical weapons companies.
The move follows on from its New Zealand arm which pulled out of these investments last year following reports by the New Zealand Herald and Radio New Zealand which highlighted KiwiSaver's exposure to the controversial sectors.
AMP Capital chief executive Adam Tindall said it had excluded tobacco manufacturers under a new environmental, social and governance and socially responsible framework because their products were highly addictive, could not be consumed safely and impacted non users via second-hand smoke.
He said cluster munitions, landmines, biological and chemical weapons manufacturers were excluded because their products indiscriminately kill through normal use (including during peace time) and their use leaves a legacy of significant and specific danger for civilians.
"We are not prepared to deliver investment returns to customers at any cost to society.
This position has been affirmed through consultation with major institutional clients and engagement with retail customers."
Divestment from the tobacco investments would occur progressively over 2017 the company said, with impacted investors notified prior to any changes being made.
"The managers of impacted portfolios will be instructed to progressively sell down their holdings of excluded securities in a reasonable manner. This may take up to 12 months from time of formal notification," a spokeswoman said.
Last year the Herald identified AMP Capital's KiwiSaver funds had $17,169,091 invested in tobacco companies in the year to March 31, 2015.
It also has investment funds outside of KiwiSaver which are likely to include tobacco investments.
The AMP spokeswoman said it was not giving a regional breakdown for its tobacco investment.