British American Tobacco's response to the 2010 assurance statement
An independent review of our approach is essential to support our commitment to continuous improvement. Ernst & Young LLP carried out an independent review of our Sustainability Report and of how it is aligned with the AA1000 Assurance Standard (2008). This highlighted a number of strengths in our reporting process, as well as where improvements could be made.
In 2007, we carried out a three-stage materiality test to identify which issues we should include in our Sustainability Reports and, in 2009, we reviewed this process in order to identify any additional issues that should be included in view of ceasing local sustainability reporting. This resulted in the addition of Broad-Based Black Economic Empowerment and HIV/AIDS as material issues. In previous years, Ernst & Young LLP has concluded that our reporting of economic impacts was not as detailed as it could be, something we agreed with and committed to consider further. As a result, we have included a dedicated section on economic impact in our online Report. We hope that this goes some way to demonstrating the economic value we add to the markets we operate within.
We are also pleased to note that Ernst & Young LLP concluded that we presented a more balanced picture of key markets’ sustainability activities, particularly in relation to illicit trade and child labour.
Actions for us:
- Engage with stakeholders to maintain the continued relevance of our sustainability agenda;
- Continue to ensure that the process for identifying risk within the Group allows for adequate consideration of sustainability related risks; and
- Continue to ensure we represent a balanced picture of key market performance.
Ernst & Young LLP attended our London based stakeholder dialogue events on employee wellbeing, supply chain sustainability, water management and integrated reporting. These meetings were all independently facilitated and were attended by senior management from British American Tobacco. Ernst & Young LLP concluded that there were no issues raised at dialogue that are not covered in the Report.
During 2010, we continued to develop our approach to dialogue to involve stakeholders more directly in the development of sustainability plans and initiatives, something acknowledged by Ernst & Young LLP in its assurance statement. We continue to provide a summary of dialogue that has been undertaken by our companies globally in our online Sustainability Report and you can find links to any published stakeholder reports at www.bat.com/reporting .
Actions for us:
- Continue to develop our approach to dialogue to involve stakeholders directly in the development of plans to meet our sustainability goals; and
- Share our revised approach to dialogue to encourage key markets to adopt the new approach to support the development of local plans and activities.
Ernst & Young LLP concluded that we have been inclusive in our engagement with stakeholders across the business. However, it also shared our observation that some stakeholders often refuse to engage with us because of the nature of our products. We hope that the changes we are making to our approach to dialogue will encourage wider participation.
Actions for us:
- Continue to try to engage with our critics; and
- Develop our approach to dialogue to include wider participation from different stakeholder groups.
As well as the points raised in relation to our alignment with the AA1000 Assurance Standard, Ernst & Young LLP also raised a number of additional observations. In particular, while they observed a more structured process at a Group level for reviewing and challenging environmental data quality, they concluded that further progress is required in the development of processes at a market level.
This is something we recognise and ensuring a consistent, accurate and transparent approach to data reporting across a business as diverse as ours remains a challenge. To address this, in 2011, we plan to carry out a review of the reporting scope and methodology used for our Environment, Health & Safety systems.