british american tobacco p.l.c. sustainability report 2009 - Ernst Young observations and areas for improvement

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SUSTAINABILITY REPORT 2009

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 on the previous page.

  • As well as interviewing stakeholder engagement staff at headquarters and regional level, we reviewed the outputs of stakeholder engagement activities in four locations. During interviews we discussed how stakeholder dialogue had been used to inform decision making. For example, we saw evidence that British American Tobacco has entered into dialogue with key stakeholders on the subject of anti-illicit trade to help its activities in this area.
  • Through our environmental data review we have observed British American Tobacco’s efforts to build a more detailed understanding of environmental performance at a unit level. This, along with the new supply chain sustainability strategy, should assist British American Tobacco in identifying and monitoring environmental performance improvements in the future. There continue to be areas for improvement in relation to the completeness of documentation to support unit level reporting and the review of environment data at headquarters level.
  • The Report includes coverage on sustainability performance in key markets which has given British American Tobacco the opportunity to discuss particular local issues that are of interest to stakeholders such as community social investment activities and HIV/AIDS. However, in future Reports it will be important that these examples show a balanced picture of successes, as well as challenges faced with regard to sustainability in these markets.
  • We noted improvements to the automated collation system for the Group 2009 CSR survey. For example, help text to assist data providers has been made clearer and the requirement to upload supporting evidence has been extended to cover additional entries. However, we found that the quality and coverage of evidence provided remains an area for improvement, particularly in relation to youth smoking prevention programmes. In addition, there is scope for improving the quality of review activities over the CSR survey data. In particular, systematic comparisons to previous years’ data are needed in order to enable early identification of material movements in performance and irregular variances.

Ernst & Young LLP
London
April 2010

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