Stakeholder Panel's statement

Panel members

Philippa Foster Back CBE, Director of the Institute of Business Ethics  (Panel chair) – an education charity whose purpose is to promote high standards of business behaviour based on ethical values.

Scott Ballin , Health Policy Adviser – Scott has spent more than 40 years involved in issues related to tobacco and health and is a key opinion leader on tobacco harm reduction.

Marco Ferroni, Director of the Syngenta Foundation for Sustainable Agriculture  – a non-profit organisation focused on improving the livelihoods of smallholder farmers.

Peder Michael Pruzan-Jorgensen, Senior VP of Business for Social Responsibility  – a global network dedicated to addressing business sustainability issues.

Process

This is the first year of the Panel’s existence. Its aim is to understand the context BAT’s business operates within, identify how it is meeting the various sustainability challenges, and offer comment on the materiality of the Report and a collective opinion on reporting performance.

To achieve this, the Panel reviewed a draft of the Report , asked questions of BAT and received additional information in response, and made suggestions as to how this year’s Report could be improved. A number of these comments were incorporated prior to publication. Throughout the process BAT’s willingness to share information and enter into an open discussion of the issues and challenges arising from its operations and products was impressive.

The Panel’s comments on the Report, together with recommendations as to how future reports could be improved to meet the needs of BAT’s stakeholders, are summarised below.

Materiality and performance

Overall, the Report reads well, captures the sustainability issues most material to BAT and its stakeholders, and usefully guides the reader to more comprehensive qualitative and quantitative data on BAT’s website. We believe openness and transparency would be improved if there was a clearer rationale for the selection of material issues and accompanying objectives together with a single, consolidated data table that sets out performance.

Moreover, the Report would be greatly enhanced by providing more detail on BAT’s corporate strategy and operations, in particular the significance of Next Generation Products (NGPs), to enable readers to contextualise its sustainability performance. We recommend that the Report focus more on the outcomes of BAT’s strategy and policies than on the scale of its inputs.

Given the importance BAT attaches to its most material issues the Panel felt it important to comment on how each is addressed in the Report.

Harm Reduction

The health implications of BAT’s products are considerable both in terms of scale and seriousness. Thus, its commitment to develop lower risk alternatives is a positive step. The Report conveys important information about these products and how their understood risks compare to those of combustible cigarettes.

While we welcome the inclusion of stakeholder views in the Report, it would benefit from greater detail on BAT’s engagement with its stakeholders, such as the academic and public health communities, regulators, policy makers and consumers. Similarly, BAT should explain how its research increases understanding of the health risks of conventional cigarettes and NGPs. Greater clarity is also needed on how BAT’s research into NGPs in general and their health impacts in particular compares to its total investment in these areas.

Finally, future Reports should emphasise BAT’s commitment to and detail what it regards as an appropriate and workable regulatory framework. Among other things, this should include an explicit prohibition on the use of tobacco or nicotine products by children and adolescents.

Sustainable Agriculture and Farmer Livelihoods (SAFL)

The significance of SAFL to BAT and how its operations affect the environment and wellbeing of farming communities is reflected by the Report’s comprehensive coverage of the Company’s impacts in its leaf supply chain. This insight will be enhanced by the planned inclusion of SAFL and Sustainable Tobacco Programme key indicators in future Reports.

The Report could be improved by more clearly identifying the principal risks and opportunities that affect the resilience of BAT’s supply chain. As the Company increases investments in NGPs, the Panel would welcome more detail on how this would impact both the NGP and BAT’s traditional supply chains.

Corporate Behaviour

The Panel was concerned that this section lacked focus given the variety of topics covered. To address this, BAT could make the following changes:

  • Include more detail on how BAT’s policies in this area are delivering tangible benefits;
  • Highlight the role employees play in implementing the Company’s strategy; and
  • More radically, BAT could include a stand-alone section on marketing, covering both combustible and NGPs. In conjunction with our comment above, about what BAT regards as a workable regulatory framework, this would clarify how it is preventing young people accessing the full range of tobacco and nicotine products.
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