Following the publication of our 2007 Report, stakeholder feedback was positive about the clarity of our approach and our willingness to address the difficult topics inherent in the tobacco industry. However, there were two basic challenges to our approach which we believe it is appropriate to address in this Report. First is the question of whether, given the nature of our products, we should attempt to build a sustainable business. Second is a challenge concerning our lack of engagement with those stakeholders who are most critical of us.
To explore these issues further, we met with a group of CSR opinion leaders in a formal dialogue session. We wanted to invite people who are critical of tobacco, as we were keen to better understand their views, but found it difficult to secure their attendance.
Nevertheless, we had a challenging and valuable debate on the fundamental question of sustainability and the tobacco industry with those who did attend.
Sustainability and the tobacco industry
Addressing sustainability issues, such as striving to develop and introduce potentially reduced-risk products and upholding high standards of corporate conduct in the marketplace, is fundamental to being a responsible tobacco business. We see it as particularly important for businesses in controversial or challenging industries to address sustainability, as this is where the most significant issues exist and where the greatest progress can be made.
Stakeholders in dialogue liked our overall approach to sustainability. However, we were also challenged to be more ambitious in our target setting in terms of addressing the health impact of our products and we were asked to adopt a long-term goal that would signal our intent in this area. There was debate about the articulation of a goal to reduce the Group’s reliance on cigarettes and about the possibility of setting a specific goal to reduce the health impact of our product range by a particular date.
Aspirational statements are easy to make. However, we want to be confident that we can deliver on any commitments we may make. In the absence, to date, of any consumer acceptable reduced-risk products, and the scientific evidence and regulatory support for such products, we believe it would not be appropriate to make such a statement at this time.
Given the forecast growth in world population, it is likely that many millions of adults will continue to consume tobacco products for many years to come. We remain committed to pursuing the research, development and test marketing of innovative tobacco products that will have consumer acceptability and will be recognised by scientific and public health communities as posing reduced risks to health. However, given the challenge this presents, it is clear that for the foreseeable future, our commercial success will continue to be driven by cigarettes. This is why the way we operate in our marketplace is a key part of our sustainability agenda.
Engagement with our critics
For many years, stakeholder dialogue
has been a vital element in our approach to CSR and has helped us to make the right kinds of improvements to our business. It has shown us things that we might not otherwise have realised and has enabled us to connect with stakeholders who are willing to help us to do the right things well.
However, engagement with stakeholders who are the most critical of the tobacco industry remains a challenge. This was again highlighted in the responses we received to our invitations to dialogue. Many of these stakeholders either will not, or feel they cannot, engage with us. Similar views are also reflected, to some extent, in the guidelines recently adopted by government parties to the World Health Organization’s Framework Convention on Tobacco Control (FCTC), which are recommending the implementation in national laws of measures to limit interactions between the tobacco industry and governments.
The group of stakeholders who met with us in dialogue expressed a concern that this recommendation is likely to be counterproductive and encouraged both the industry and other interested parties to continue their attempts to engage with governments in the regulatory development process.
We agree that the manufacture, distribution, marketing and sale of tobacco products should be appropriately regulated and that many areas covered by the FCTC should be subject to controls. Moreover, we continue to believe that we can play a constructive role in the development of regulation that affects our industry.
We are actively pursuing innovative methods to work with stakeholders on our key issues. We remain committed to constructive engagement with any stakeholder on tobacco-related sustainability issues.