bat sustainability report 2007 - Addressing concerns around climate change

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Concerns about climate change have intensified over recent years. It is increasingly being seen as a key challenge facing all businesses. In dialogue, our own stakeholders raised it as a key issue of concern to them and one that they agreed we should be addressing.

We recognise that issues associated with climate change could potentially impact on our business in commercial, regulatory or physical ways and that we should assess and plan to adapt to these risks well in advance.

We have begun to explore the potential implications for our business and in 2006, appointed Environmental Resources Management, an environmental consultancy to help us do so (see below).

One of our aims is to reduce our CO2 equivalent. We understand the concerns over the effectiveness of carbon offsetting. We will prioritise reducing our emissions further before we consider investing in offsets.

What are we doing to reduce our carbon footprint?

We are reducing our CO2 equivalent by implementing energy conservation programmes in Group companies and by investing in energy efficient plant and equipment at our factories. We encourage the use of renewable fuels wherever feasible and will review the viability of using further energy derived from renewable sources. We are reducing the amount of waste that we produce and we reuse or recycle materials to avoid, where we can, sending waste to landfill, which generates methane.

We are working with our suppliers and business partners to measure their energy use from activities such as leaf growing. Through links with our agricultural supply chain, we have sponsored and promoted afforestation programmes since the 1970s. Trees are grown (either by us or by farmers we advise and support) to provide a source of renewable fuel for curing tobacco leaf in areas where wood is used as a curing fuel.

In 2007, we limited our Group CO2 equivalent to a small increase, making a cumulative reduction of 36 per cent from our 2000 baseline. As we have made large reductions since 2000, we believe similar large reductions over short timeframes will be harder to achieve in future.

What’s next?

• We will continue in our efforts to reduce our Group CO2 equivalent by 50 per cent by 2030 and 80 per cent by 2050, from our year 2000 baseline of 1.25 tonnes per million cigarettes equivalent.