british american tobacco p.l.c. sustainability report 2011 - Independent assurance statement by Ernst Young

 
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Sustainability Report 2011

Independent assurance statement to British American Tobacco management

The British American Tobacco p.l.c. Sustainability Report 2011 (the Report)1 has been prepared by the management of British American Tobacco, which is responsible for the collection and presentation of the information within it and reviewed by the Board CSR Committee. Our responsibility, in accordance with management’s instructions, is to carry out a ‘reasonable level’ assurance engagement on the information presented in the Report regarding the stakeholder dialogue sessions and a ‘limited level’ assurance engagement on the rest of the Report. We do not accept or assume any responsibility for any other purpose or to any other person or organisation. Any reliance any such third party may place on the Report is entirely at its own risk.

What we did to form our conclusions

Our assurance engagement has been planned and performed in accordance with ISAE30002 and to meet the requirements of a Type 2 assurance engagement as defined by AA1000AS (2008)3. The AA1000AS (2008) assurance principles of Inclusivity, Materiality and Responsiveness have been used as criteria against which to evaluate the Report.

In order to form our conclusions we undertook the steps outlined below:

  1. Interviewed a selection of executives and senior managers at British American Tobacco’s headquarters in London to understand the current status of social, ethical, environmental and health and safety activities and progress made during the reporting period.
     
  2. Reviewed selected headquarters documents relating to social, ethical, environmental and health and safety aspects of British American Tobacco’s performance, to understand progress made across the organisation and to test the coverage of topics within the Report.
     
  3. Reviewed British American Tobacco’s approach to stakeholder engagement through interviews with employees at headquarters, two regions and three local companies, interviews with selected key stakeholders, reviews of selected associated documentation and attendance at four stakeholder dialogue sessions.
     
  4. Carried out the following activities to review data samples and processes for environment, health & safety (EHS), the Sustainability Survey, machinery destroyed, wood fuel sources, the Business Enabler Survey Tool (BEST), the Social Responsibility in Tobacco Production (SRTP) programme, local succession coverage and leadership diversity data:
     
    1. Reviewed disaggregated energy, waste and water data reported by a sample of seven local companies to assess whether the data had been collected, consolidated and reported accurately.
       
    2. Reviewed and challenged supporting evidence from the sample of seven local companies.
       
    3. Tested whether energy, waste, water, CO2e and health & safety data had been collected, consolidated and reported appropriately at Group level.
       
    4. Reviewed data for machinery destroyed, wood fuel sources, BEST, SRTP, local succession coverage and leadership diversity at Group level.
       
    5. Reviewed and challenged supporting evidence for a selection of Sustainability Survey data points from a sample of the 86 local companies that completed the Survey in 2011.
       
    6. Reviewed disaggregated data reported in balanced scorecards for four regions and nine markets to assess whether the data had been collected, consolidated and reported accurately.
       
  5. Reviewed British American Tobacco’s processes for determining material issues to be included in the Report.
     
  6. Reviewed the coverage of material issues within the Report against the key issues raised in the stakeholder dialogue sessions, material issues and areas of performance covered in external media reports and the environmental and social reports of British American Tobacco’s peers, as well as the topics discussed by the Board CSR Committee and regional audit and CSR committees.
     
  7. Reviewed information or explanations about the Report’s data, statements and assertions regarding British American Tobacco’s sustainability performance.
In order to form our conclusions on the information regarding the stakeholder dialogue sessions, we:
  1. Attended four independently facilitated stakeholder dialogue sessions. Three were held in the UK and one in Bangladesh.
     
  2. Reviewed the independent facilitator’s minutes of the dialogues to form conclusions that they provided a fair representation of the issues raised and British American Tobacco’s response.
     
  3. Reviewed the sections in the Report relating to the stakeholder dialogue sessions, as described in the environment and supply chain sections to form conclusions that they are an accurate and balanced summary.

Level of assurance

The extent of evidence gathering procedures for a ‘limited level’ of assurance is less than that of a ‘reasonable’ assurance engagement (such as a financial audit) and therefore a lower level of assurance is provided for the full Report than the sections relating to the stakeholder dialogue sessions.

The limitations of our review

With the exception of selected telephone interviews with regional and local staff and the review of selected documentation, our work was limited to headquarters activities. We did not visit any local companies.

Our conclusions

Based on the scope of our review our conclusions are outlined below:

Inclusivity

Has British American Tobacco been engaging with stakeholders across the business to develop its approach to sustainability?

  • We are not aware of any key stakeholder groups that have been excluded from engagement. However, we are aware of stakeholder groups who, due to their critical views of the tobacco industry, have not accepted invitations to engage.
     
  • We are not aware of any matters that would lead us to conclude that British American Tobacco has not applied the inclusivity principle in developing its approach to sustainability.
Materiality

Has British American Tobacco provided a balanced representation of material issues concerning its sustainability performance?

  • With the exception of the area listed below, we are not aware of any material aspects concerning British American Tobacco’s sustainability performance that have been excluded from the Report.
     
  • We consider that British American Tobacco could have covered the following in more depth in the Report:
    – Disclosure of why targets have not been met, including discussion of the challenges associated with their achievement. This relates to the introduction of new goals for energy, water and waste measures, five-year milestones to monitor progress towards the CO2e targets and performance against the local representation target.
     
  • Nothing has come to our attention that causes us to believe that British American Tobacco management has not applied its processes for determining material issues to be included in the Report. The process is described on the materiality page.
Responsiveness

Has British American Tobacco responded to stakeholder concerns?

  • We are not aware of any matters that would lead us to conclude that British American Tobacco has not applied the responsiveness principle in considering the matters to be reported.
Completeness and accuracy of performance information

How plausible are the statements and claims within the Report?

  • We have reviewed information or explanations on the statements on British American Tobacco’s sustainability activities presented in the Report and we are not aware of any misstatements in the assertions made.

How complete and accurate is data on EHS, the Sustainability Survey, machinery destroyed, wood fuel sources, BEST, SRTP, local succession coverage and leadership diversity in the Report?

  • We are not aware of any material reporting units (as defined by British American Tobacco) that have been excluded from the headquarters level data relating to the topics above.
     
  • Nothing has come to our attention that causes us to believe that the data relating to the above topics has not been collated properly at headquarters level.
     
  • We are not aware of any errors that would materially affect the data as presented in the Report.

Has British American Tobacco provided a fair representation of the issues raised and response to the stakeholder dialogue sessions referred to in the Report?

  • Information in the Report regarding the independently facilitated stakeholder dialogue sessions held in the UK and Bangladesh provides a fair summary of the engagement at these sessions.

Observations and areas for improvement

See the following page to view our observations and areas for improvement.

Our independence

This is the fifth year that Ernst & Young LLP has provided independent assurance services in relation to British American Tobacco p.l.c.’s Sustainability Report. We have provided no other services relating to British American Tobacco’s approach to sustainability reporting.

Our assurance team

Our assurance team has been drawn from our global environment and sustainability
network, which undertakes engagements similar to this with a number of significant UK and international businesses. The work has been led and reviewed by a Lead Sustainability Assurance Practitioner.

Ernst & Young LLP
London
March 2012

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1 This includes the printed Summary Report and full online Report, including the case studies and balanced scorecards for nine key markets and selected sustainability web content on www.bat.com, marked with the Ernst & Young footnote.
 
2 ISAE 3000 – International Federation of the Accountants’ International Standard for Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.
 
3 AA1000AS (2008) – The second edition of the AA1000 assurance standard from the Institute of Social and Ethical Accountability.

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