british american tobacco p.l.c. sustainability report 2009 - GRIs: Economic performance

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SUSTAINABILITY REPORT 2009

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments
ComponentComment2009 Response
Direct economic value generated
a) RevenuesNet sales plus revenues from financial investments and sales of assets £41,324m
Economic value distributed
b) Operating costsPayments to suppliers, non-strategic investments, royalties and facilitation payments£7,427m
c) Employee wages and benefitsTotal monetary outflows for employees (current payments, not future commitments)£2,317m
d) Payments to providers of capitalAll financial payments made to the providers of the organization’s capital£2,634m
e) Payments to government £27,629m
f) Community investmentsVoluntary contributions and investment of funds in the broader community (includes donations): statutory reporting criteria £13.8m
 LBG criteria£14m
Economic value retained
(calculated as Economic value generated less Economic value distributed)Investments, equity release, etc. £1,302.2m
EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change

At the end of 2006 and following the publication of the Stern Report, we undertook an analysis of the potential risks posed by changes in climate over the next 10 to 20 years. Assisted by the consultancy company Environmental Resources Management (ERM), the study concentrated on key leaf operations, factories and global impact areas such as direct materials supply, business travel and freight. ERM identified 56 potential climate change risks, ranging from weather-related phenomena (changes in temperature, precipitation, extreme events) to regulation (levies on emissions) and established upper and lower boundaries for a potential future in 2020, based on available academic literature from sources such as the Stern Report and Intergovernmental Panel on Climate Change publications.

The headline outcome from this study was that climate change could potentially bring physical impacts affecting our companies. The annual incremental costs of this could range from £50 million to £100 million. The study foresaw almost no regulatory impacts.

EC3 Coverage of the organisation's defined benefit plan obligations

This information is in our 2009 Annual Report Opens in new window.

EC4 Significant financial assistance received from government

This information is more relevant locally and we do not collate global data on it.

EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation

This information is more relevant locally and we do not collate global data on it.

EC6 Policy, practices and proportion of spending on locally based suppliers at significant locations of operation

We do not currently measure the proportion of spending on locally based suppliers as this would be an extremely complex calculation. We are a global business and have contracts with global suppliers, although the delivery and invoicing of goods and services often takes place locally, making it difficult to categorise spend as 'global' or 'local'. Our companies use the most appropriate supplier for goods and services, taking into account numerous factors such as meeting our minimum standards, capability and capacity to supply, quality, location, price, speed of delivery and various other criteria, including local regulations and social issues.

EC7 Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation

There is information on our approach to recruitment in the People and culture section of this Report.

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement

This information is more relevant locally and we do not collate global data on it.

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts

In some of our companies, research has been carried out to quantify the economic impact of tobacco growing in particular areas. While providing useful information at a local level, we have found that varying methodologies have meant that this information cannot be aggregated to provide a meaningful picture of our global economic impact.