british american tobacco p.l.c. sustainability report 2010 - Supply chain

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Sustainability Report 2010

Our opportunity

By looking at sustainability issues from tobacco farming through manufacture and into distribution, we identify potential efficiencies in our own operations and in those of our suppliers.

The challenge

Maintaining the same high standards across our global supply chain is challenging because local resources, legislation and infrastructure vary from place to place.

We will work for positive social, environmental and economic impacts in our supply chain.

 

2010 progress in brief


We held a stakeholder dialogue session for suppliers and are developing an environmental scorecard together. Our Social Responsibility in Tobacco Production assessment now contains minimum performance thresholds and we are aiming for zero use of natural forest by our contracted farmers by 2015. We also developed a plan for reducing the use of natural resources at our factories and have piloted efficiency initiatives in our logistics network.

 

Our supply chain


In 2010, we supplied over 180 markets with 708 billion cigarettes made at our 45 cigarette factories, which are based in 39 markets. British American Tobacco purchased approximately 460,000 tonnes of tobacco leaf in 2010, grown by more than 200,000 farmers. Around 80 per cent of the leaf by volume is purchased from farmers and suppliers in emerging economies. We also purchase significant quantities of other raw materials, such as packaging, cigarette paper, filter materials, glues and inks.

We consider our own operations and those of our suppliers within the scope of our supply chain. This includes the areas of:

  • Product development: This area assures the consistent quality of our products, manages the impacts of new products and processes, and applies sustainable principles to the design process.
  • Leaf: Leaf managers in our companies work alongside farmers, providing agronomy support to improve sustainability, crop yields and quality.
  • Procurement: Our procurement team develops Group-wide frameworks and processes for purchasing the non-leaf materials and services required to make our products. It also supports the application of the standards that we expect from our suppliers.
  • Planning and sourcing: This area defines the approach, objectives and processes for our global supply chain, including sourcing decisions.
  • Manufacturing: We have factories all over the world and endeavour to make them financially competitive while also managing our sustainability impacts.
  • Logistics: The logistics area provides strategic direction and coordination on the movement of product through the supply chain, as well as leading collaborative initiatives with logistics partners.

 
Our stakeholders expect us to manage our supply chain responsibly and we engage with our suppliers to help address their social, environmental and economic impacts. This engagement creates deeper understanding of our supply chain, enabling us to make better decisions, generate efficiencies and effectively manage risks.

Questions and feedback

In Stakeholders' challenging questions, we have answered some of the more difficult questions our stakeholders ask, such as if we exploit farmers to make as much profit as possible. If you have a question you would like to see answered in a future Report or have any feedback or comments on our supply chain management, please email us at sustainability@bat.com.



Material issues

How we determine which issues are material to our business and stakeholders:
Reported
This online report covers issues most material to our business and stakeholders.
At bat.com
Issues of partial interest or impact to our business or stakeholders can be found on our website.
Not reported
We do not cover topics that have already been addressed and are no longer raised by stakeholders, issues we cannot influence and those that do not have a significant impact on the business.