sustainability report 2008 - Independent assurance statement
Independent assurance statement to British American Tobacco management
(the Report). The following assurance activities were requested: - Provide a ‘limited level’ assurance opinion on the Report’s content with respect to the AA1000AS (2008) assurance principles of Inclusivity, Materiality and Responsiveness.
- Provide a ‘limited level’ assurance opinion on the completeness and accuracy of the performance claims and data presented in the Report.
- Provide a ‘reasonable level’ assurance opinion on the information presented in the Report on the London stakeholder dialogue sessions.
What we did to form our conclusions
Our assurance engagement has been planned and performed in accordance with ISAE 3000 [ 1 ] and to meet the requirements of a Type 2 assurance engagement as defined by AA1000AS (2008) [ 2 ]. The AA1000AS (2008) assurance principles of Inclusivity, Materiality and Responsiveness have been used as criteria against which to evaluate the Report.
To form our conclusions on the Report, we undertook the steps outlined below:
1. Interviewed a selection of executives and senior managers at British American Tobacco’s headquarters in London (headquarters) to understand the current status of social, ethical and environmental activities, and progress made during the reporting period.
2. Reviewed the Group’s approach to stakeholder engagement through interviews with a selection of employees at headquarters, regions and Group companies, and reviewing selected associated documentation.
3. Conducted a high-level benchmarking exercise of the material issues and areas of performance covered in the sustainability reporting of British American Tobacco’s peers.
4. Reviewed a selection of external media reports and selected headquarters documents relating to social, ethical and environmental aspects of performance to test the coverage of topics within the Report.
5. Reviewed information or explanation about the Report’s data, statements and assertions regarding sustainability performance in 2008.
6. Reviewed and challenged a selection of the collation and validation data processes at headquarters. This review encompassed environment, health and safety (EHS), Group corporate social responsibility (CSR) survey, ‘Your Voice’ employee opinion survey, machinery destroyed, Business Enabler Survey Tool (BEST) and Social Responsibility in Tobacco Production (SRTP) data.
7. Reviewed and challenged supporting evidence from Group companies for a selection of data points covering EHS and the Group CSR survey.
8. Reviewed the processes for determining material issues to be included in the Report and the application of these in preparing the Report.
In addition, in order to form our conclusions on the information regarding stakeholder dialogue sessions in London, we:
9. Attended four independently facilitated stakeholder dialogue sessions held in London during late 2008 and early 2009.
10. Reviewed the independent facilitator’s minutes of the dialogue to form conclusions that they provided a fair representation of the issues raised and British American Tobacco’s response.
11. Reviewed the sections in the Report relating to the London-based stakeholder engagement sessions, as described in vision for sustainability, engaging with stakeholders, illicit trade, environment and human rights to form conclusions on their accuracy and balance.
The extent of evidence gathering procedures for a ‘limited level’ of assurance is less than that of a ‘reasonable level’ assurance engagement (such as a financial audit) and therefore a lower level of assurance is provided for the full Report than those sections relating to the London-based stakeholder engagement sessions.
Limitations of our review
Our scope of work covered the online Sustainability Report 2008 and selected web pages , which are marked with the Ernst & Young footnote. We did not review all the bat.com pages.
With the exception of selected telephone interviews with personnel in regions and Group companies, our work was limited to activities at headquarters. We did not visit any overseas subsidiaries.
We interviewed personnel from three out of five regions and staff at four Group companies out of a possible 104 locations about their stakeholder engagement activities.
Our review of EHS data from Group companies was limited to testing a total of 40 data points from 10 different Group companies, out of a total of 104 locations. We also interviewed personnel from two out of five regions about the quality control of data collated from the Group CSR survey.
Our conclusions
On the basis of our review and in accordance with the terms of reference for our work, we provide the following conclusions on the Report in relation to each of the AA1000AS (2008) assurance principles, the accuracy of the statements relating to the London-based stakeholder engagement sessions, and the accuracy and completeness of data and claims presented in the Report. Our conclusions should be read in conjunction with the above section on ‘What we did to form our conclusions’.
Inclusivity
Has British American Tobacco been engaging with stakeholders across the business to further develop its approach to sustainability?
- We are not aware of any key stakeholder groups which have been excluded from dialogue. However, we are aware of certain stakeholder groups who have not accepted invitations to engage for reasons which primarily relate to the nature of the Group’s products.
- We are not aware of any matters that would lead us to conclude that British American Tobacco has not applied the Inclusivity principle in developing its approach to sustainability.
Materiality
Has British American Tobacco provided a balanced representation of material issues concerning its sustainability performance?
- With the exception of British American Tobacco’s economic impact and corporate social investment activities in key markets, we are not aware of any material aspects concerning its sustainability performance which have been excluded from the Report.
- Nothing has come to our attention that causes us to believe that management has not applied its processes for determining material issues to be included in the Report, as described in the pages on engagement and materiality and materiality analysis.
Responsiveness
- With the exception of the issues highlighted in relation to materiality, we are not aware of any additional issues of stakeholder interest that are not currently included in the Report’s scope and content.
Completeness and accuracy of performance information
Has British American Tobacco provided a fair representation of the issues raised and response to the London-based stakeholder engagement sessions?
- Text in the Report regarding the independently facilitated stakeholder dialogue sessions held in London provides a fair summary of the engagement at these sessions.
How plausible are the statements and claims within the Report?
- We have reviewed information or explanation on the statements on the Group’s sustainability activities presented in the Report and we are not aware of any misstatements in the assertions made.
How complete and accurate is the data in the Report regarding EHS, Group CSR survey, ‘Your Voice’ employee opinion survey, machinery destroyed, BEST and SRTP?
- We are not aware of any material reporting units that have been excluded from the headquarters-level data relating to the topics above.
- We are not aware of any errors in the collation of data at headquarters or regional levels that would materially affect the data as presented in the Report.
Observations on particular aspects of our engagement
Our observations and areas for improvement will be raised in a report to British American Tobacco management. Selected observations are provided below. Additional specific observations regarding progress made and areas for improvement can be found in appropriate sections of the Report. These observations do not affect our conclusions on the Report set out in this statement.
- During our interviews with staff dedicated to engaging with stakeholders at Group, regional and local levels, we saw evidence that engagement takes place at each level of the organisation and that outputs are used to inform decision making and drive sustainability reporting. A Group-wide stakeholder mapping exercise was last undertaken in 2005, using the organisation’s stakeholder engagement and classification guidelines. We were told that such exercises are recommended to be reviewed every three years. It will therefore be important for British American Tobacco to revisit its stakeholder engagement process to take into consideration changes in stakeholder relationships and emerging topics of stakeholder interest.
- During our review of British American Tobacco’s processes for collating the 2008 environment, health and safety (EHS) data, we noted that several improvements have been made since last year. In particular, we noted that greater consistency had been introduced in the processes by which management at regional and Group-level review data reported by the local companies. However, the variable level of detail within the commentary provided by local companies within their reports made it difficult for management to determine the impact of specific initiatives on environmental performance or the extent of progress towards targets.
- The Group CSR survey for 2008 utilises a new automated collation system at headquarters which reduces the risk of transposition errors in the non-EHS data reported by the local companies.
- The Report has included more coverage on workforce health and safety.
- The Report content is process-focused in a number of areas, such as biodiversity and human rights, rather than discussing the risks and challenges facing the activities managed by those processes. More detail should be provided in future years, allowing stakeholders to fully understand the risks facing the business and the plans in place to mitigate and manage those risks.
Our independence
This is the second year Ernst & Young LLP has provided independent assurance services in relation to British American Tobacco p.l.c.’s Sustainability Report. We have provided no other services relating to British American Tobacco’s approach to sustainability reporting.
Our assurance team
Our assurance team has been drawn from our global climate change and sustainability services network, which undertakes similar engagements to this with a number of significant UK and international businesses. The work has been led and reviewed by Lead Sustainability Assurance Practitioners.
Ernst & Young LLP
London
April 2009
1 International Federation of Accountants’ International Standard on Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (ISAE 3000).
2 AA1000AS (2008) – A second edition of the AA1000 assurance standard from the Institute of Social and Ethical AccountAbility, AA1000AS (2008), was launched in October 2008.