In 2010, we were, for the ninth year running, included in the Dow Jones Sustainability World Index. This Index tracks the economic, environmental and social performance of leading companies based on how well they integrate sustainability into their businesses. In 2010, our overall score decreased from 81 per cent to 78 per cent. We are working to identify opportunities for improvement and hope to soon see our performance improve.
You can find out more about our strategy and our approach to sustainability elsewhere in this Annual Report.
For more details on our progress against our sustainability agenda, see our online Sustainability Report 2010, published at the same time as this report, at: www.bat.com/sustainability
Underpinning our business model, sustainability for us is all about shared value – creating economic value in a way that also creates value for our stakeholders.
We strive to bring commercially viable, consumer acceptable reduced-risk products to market.
We believe we are making a significant contribution to the science needed to assess potentially reduced-exposure products. The results of our first clinical studies have been analysed and we have made good progress in developing laboratory models of how diseases progress and reinvigorated our biotechnology programme. We continue to both publish and present our scientific results whenever we can and engage with regulators.
We will take a lead in upholding high standards of corporate conduct within our marketplace.
We have continued to coordinate a consistent approach to key regulatory issues by our companies. Our global approach to youth smoking prevention was rolled out across the Group. We are also piloting a system to strengthen supply chain security and have entered into a cooperation agreement with the European Commission to tackle illicit trade in tobacco.
We will actively address the impacts of our business on the natural environment.
We made good progress in reducing our environmental impacts. We also held stakeholder dialogue, an independently facilitated session where we met with relevant stakeholders and our external assurance team, to develop our approach to water management. All our leaf-growing operations completed biodiversity risk and opportunity assessments and have corrective action plans in place where appropriate.
We will work for positive social, environmental and economic impacts in our supply chain.
We held a stakeholder dialogue session for suppliers and are developing an environmental scorecard together. Our Social Responsibility in Tobacco Production assessment now contains minimum thresholds. We are aiming for zero use of natural forest by our contracted farmers by 2015. We also developed a plan for reducing the use of natural resources at our factories and have piloted efficiency initiatives in our logistics network.
We will work to ensure we have the right people and culture to meet our goals.
We held a stakeholder dialogue session to examine how the needs of business and the expectations of employees can be aligned to create a sustainable organisation. Ninety per cent of our employees responded to our biennial opinion survey. Our health and safety strategy was updated and we extended the human rights criteria we apply in our own operations to our business partners.
Our balanced strategy adds value at every stage of our business operations, including working directly with tobacco farmers, manufacturing our own products and investing in research and development. We think this sets us apart from our competitors and ensures our long-term business sustainability, helping us to manage risks better and presenting us with efficiencies and growth opportunities.
However, sustainability for us is all about shared value – creating economic value in a way that also creates value for our stakeholders. This means seeking opportunities to increase our competitiveness through addressing our sustainability impacts and by better meeting society's needs and expectations. This can be through developing new reduced-harm products, by creating a great place to work or by minimising our environmental impacts.
Over the years we have built a strong reputation for sustainability and have been seen by some as leaders in our industry. From being the first tobacco company to be included in the Dow Jones Sustainability World Index, continuing our inclusion to date; to receiving a number of reporting awards; to achieving platinum status in the UK Business in the Community Corporate Responsibility Index.
However, we cannot overcome our sustainability challenges alone. We need to engage with our stakeholders to develop solutions together. We can use our insights from this dialogue to make the right decisions, not only for our business but also for our stakeholders, to create shared value.
We developed our sustainability agenda in 2007 and it focuses on our five goals – harm reduction, marketplace, environment, supply chain, and people and culture.
We are making good progress in many areas. Our successes include advances in the science of harm reduction, completing biodiversity risk and opportunity assessments in all our leaf-growing operations and developing a more integrated supply chain strategy.
We know we have more to do before sustainability becomes ingrained in every part of our organisation. We aim to ensure that our sustainability agenda supports the growth of the business by taking advantage of the opportunity it presents and by developing solutions to future challenges.
For example, we are trying to develop reduced-harm products that will appeal to consumers and will hopefully create growth in our business when launched. We also provide broad-based agronomy advice to farmers, which includes support to grow other crops as well as tobacco. This comprehensive approach to sustainable agriculture helps farmers gain better yields and a higher income as well as securing our supply of high-quality leaf.
We also look to create value for consumers, governments and the industry in our approach to tackling the illicit trade in tobacco products. We believe governments and the tobacco industry need to work together to manage the market and remove some of the causes of illicit trade, while cooperating on prevention. This requires sensible excise programmes, robust customs enforcement, retailer and consumer education and sensible regulation.
Our focus in 2010 has been on embedding our approach to sustainability across the Group and implementing activities in each of the five areas of our sustainability agenda. A brief summary of our progress in 2010 is shown above.