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

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Sustainability Report 2010

Supply chain managementManaging sustainability in a supply chain the size of ours is challenging. We aim to develop standards and tools that are flexible enough to be adopted by a variety of suppliers. This approach will help ensure that our supply chain meets baseline sustainability criteria and is continually improving its performance.

In 2010, we finalised our supply chain sustainability strategy based on stakeholder input and existing good practice. The strategy requires each division of our supply chain to develop tools and activities to minimise its most significant environmental impacts. It has three underlying aims:

  • To take a more long-term approach to managing the sustainability impacts of our supply chain;
  • To further develop tools to enable informed decision making; and
  • To address the impacts of our supply chain through collaboration with suppliers and other stakeholders.

Many areas of our operations have adopted these aims already, but through the strategy they are now being implemented globally.

Embedding sustainability

We have formalised our requirements, including sustainability criteria, for all suppliers. These are now being incorporated into our agreements with global suppliers of direct materials and we encourage our local companies to adopt them.

To further embed sustainability into our decision making, we have developed an approach to enable us to take environmental impacts into consideration when making factory sourcing decisions.

We use our Business Enabler Survey Tool (BEST) to assess whether our sustainability standards are being met by our materials suppliers, providing a framework for continual improvement. We assess suppliers using an international pool of trained reviewers. Suppliers must obtain Approved, Qualified or Certified status in order to be retained by British American Tobacco. During 2010, we carried out 32 BEST reviews, of which 15 gained the minimum Approved status, 15 gained Qualified status and two gained the highest status, Certified. You can read more about BEST on Opens in new window.

Collaborating with suppliers

In 2010, we held a stakeholder dialogue session with suppliers and employees. The objectives were to identify common sustainability risks and opportunities, share best practice and establish opportunities for collaboration.

As a result of this, we are developing with our suppliers an environmental scorecard that will enable us to monitor performance and identify opportunities for joint improvements. Initially the scorecard will cover energy, water, waste and greenhouse gases, but we hope to expand it in time to include other sustainability indicators.

Supply chain management: what's next?

In 2011, we will further embed our supply chain sustainability strategy across our operations and establish an external stakeholder panel on supply chain sustainability issues. We will use our approach for considering environmental impacts in all global factory sourcing decisions. We will also revise BEST to incorporate further sustainability criteria and trial our environmental scorecard with strategic suppliers.

Comment from
Ernst & Young LLP

We have reviewed how British American Tobacco has used engagement activities to define priorities for both realising opportunities and mitigating risks in the area of supply chain sustainability. We have seen an increased focus on formalising sustainability requirements to further strengthen collaboration between the business and suppliers through the sharing of good practice and monitoring of performance against environmental scorecards.

Stakeholder comment

Think about your business and what you are going to do…think about the plan B. Sensible businesses need to think about what they can do to change.
Academic at our stakeholder dialogue session on water