Our response to the Panel's statement

The Panel’s insights and constructive feedback are invaluable in helping to ensure our reporting meet the needs of our stakeholders. They have highlighted both strengths in our reporting and where improvements could be made, and we are committed to openly responding to their feedback.


This year, we welcomed the opportunity to engage with the Panel earlier and more frequently in the reporting process. The initial drafting of the Report  benefited greatly from the Panel’s input and we were able to apply many of their suggestions prior to publication. We’re also carefully considering further recommendations for future reports.

Materiality and performance

We’re pleased the Panel found our material issues are reported in a meaningful and balanced way. We recognise the need to define more measurable long-term targets, particularly for Harm Reduction and Sustainable Agriculture and Farmer Livelihoods.

We have published our new target to generate over £5 billion in Group revenue from Next Generation Products by 2022 and believe this financial metric demonstrates our commitment to harm reduction and the transformation of our business. As this area develops, we will work to define further targets and indicators to support this.

We agree with the Panel’s observation that the development of our Thrive programme  will help us to better quantify outcomes and impacts for our farmers and rural communities, and are committed to reporting on this in the future.

Harm reduction

We appreciate the Panel’s recognition of our progress in this area and how we’ve responded to their recommendations. We understand their concerns regarding the availability of affordable, alternative products for smokers in low- to middle-income countries.

However, in many of these countries, there are still real regulatory and marketplace obstacles to launching alternative products, so we welcome the Panel’s recommendation to continue to expand our efforts for productive engagement between key stakeholders. If we can all work successfully together, we believe real progress in tobacco harm reduction can be achieved.

Sustainable Agriculture and Farmer Livelihoods

We note the Panel’s recommendation for more information on the use of short-term hired labour by our contracted farmers.

The extent to which hired labour is used differs according to location and scale of the farm. In many locations, the use of short-term casual labour is common, with workers hired for one or two days’ work at a time. This is a reflection of how the informal economy operates in many parts of the world and one over which we have limited direct control. However, we are clear on the labour standards we expect our contracted farmers to uphold with their own hired workers and monitor practices via our farm monitoring and the industry’s Sustainable Tobacco Programme , both of which include specific criteria relating to the use of hired labour. We will consider how we can better reflect this important part of our supply chain in future reports.

We’re also carefully considering the Panel’s suggestion to conduct a new analysis on climate change impacts in tobacco growing, and to provide more detail in future reports on how we’re working to understand, mitigate and increase farmers’ resilience to these impacts.

Corporate behaviour

We’re pleased the Panel found our reporting in this area to be clear and that the use of case studies to demonstrate how we’re delivering tangible benefits was a useful addition. We’re also grateful to the Panel for highlighting the gap regarding the role of our Guiding Principles and Standards of Business Conduct – which we were able to address prior to publication (see page 23 of the 2017 Report ). In addition, we’re committed to including data from our Speak Up  channels in future reports.

We recognise the importance of clearly explaining how our global approach to Corporate Behaviour is applied, particularly in the context of different local circumstances. We adhere to our policies, principles and standards  even when they are stricter than local laws, and prioritise countries with a higher risk exposure for enhanced monitoring, such as where regulation or enforcement is weak, or there are high levels of corruption, criminality or unrest. We will work to further clarify our reporting on this in the future.

Other observations

We share the Panel’s concerns regarding our health and safety performance in 2017, but are pleased they were reassured by the high level of attention this is given, including regular monitoring and oversight by our Board Audit Committee.

With the majority of incidents concentrated in the first half of the year, we have already seen an improvement in performance for the second half of 2017, as a result of the targeted programmes and initiatives we’ve put in place to respond to increased risks. We will endeavour to include more detail on this in next year’s Report.

British American Tobacco
March 2018