Materiality

Delivering value through excellence in ESG

A key strength of our approach to sustainability is a robust process to identify and understand our most material ESG priorities. Our comprehensive approach to evolving our Sustainability Agenda ensures we keep pace with emerging priorities and stakeholder expectations.

This materiality process also helps us to assess the level of importance of different topics for our stakeholders and our business – those with the highest level of importance form our Sustainability Agenda and are covered in our 2019 ESG Report (3.8 mb) .

Identifying focus areas

Each year, we engage with a wide range of stakeholders to understand the priorities most important to them and complement this with ongoing risk monitoring, research and benchmarking.

These external insights are mapped against the focus areas identified as most important to our business, based on strategic plans, risk registers, governance meetings and committees, and Group policies and standards.

Prioritising topics

We group the topics identified under common themes and use a defined scoring methodology to assess their level of importance to our stakeholders and the BAT Group.

Final results

The most material topics identified through this process in 2019 are outlined in the graphic below. Given the serious public health impacts of smoking, harm reduction is our principal ESG priority.

The environmental impacts of our operations and the importance of sustainable agriculture to our tobacco leaf supply chain mean these have long been priorities for us. Within these areas, climate change is a key focus but, with the impacts increasing rapidly, we have now elevated it to a stand-alone priority focus area. Growing concerns regarding plastics and post-consumption waste means that the importance of circular economy principles has also been elevated to a priority area.

Our social impacts relating to human rights, farmer livelihoods, health and safety, and our people and culture continue to be priorities, as well as key governance topics relating to business ethics, responsible marketing, regulation and policy engagement. Our other key focus areas relate to priorities we continue to address through our ongoing business as usual activities. We continue to monitor emerging issues, and as the materiality of an issue increases, we will report on it accordingly.

Our ESG focus areas

HIGH Importance to stakeholders and the Group HIGHEST
PRINCIPAL FOCUS AREA
  • Harm reduction
PRIORITY FOCUS AREAS
  • Climate change
  • Water and waste
  • Sustainable agriculture
  • Circular economy
  • Human rights
  • Farmer livelihoods
  • Health and safety
  • People and culture
  • Business ethics
  • Responsible marketing
  • Regulation and policy engagement
OTHER FOCUS AREAS
  • Anti-illicit trade
  • Board diversity
  • Executive remuneration
  • Tax transparency
  • Stakeholder engagement
Key
  • Environmental
  • Social
  • Governance
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