ESG
What ESG means at BAT
Creating shared value for our stakeholders isn’t just the right thing to do, it makes sound business sense and is central to our strategy to deliver A Better Tomorrow™.
Our ESG agenda creates shared value for our shareholders and broader stakeholders including our consumers, society and employees. Our corporate purpose puts ESG front and centre, with a principal focus on reducing the health impact of our global business in order to build A Better Tomorrow™.
Along with our principal focus, we retain a strong emphasis on other ESG priorities – including addressing climate change and excellence in environmental management. At the same time, we remain committed to delivering a positive social impact and ensuring robust corporate governance across the Group.
Outlined below are the priority areas identified in 2019 and which form the core of our Sustainability Agenda:
Reducing the health impact of our business
Excellence in Environmental management
- Climate change
- Circular Economy
- Biodiversity & Ecosystems
- Water
Robust corporate Governance
- Responsible Marketing & Transparent Communications
- Ethics & Integrity
- Sustainability Governance
Creating shared value for
- Consumers
- Society
- Employees
- Shareholders & investors
We have set stretching targets against these priorities:
Tobacco Harm Reduction*†
- £5bn by 2025 in revenues from New Category products
- 50m by 2030 consumers of our Non-Combustible products
Climate change
- 50% reduction in Scope 1, 2 & 3 CO2e emissions by 20301,2
- Net Zero across our value chain by 2050 at the latest
- Carbon neutral direct operations (Scope 1 & 2 emissions) by 2030
- 50% renewable energy use by 2030 (Updated Target)
Circular Economy
- 100% of our packaging3 to be reusable, recyclable or compostable by 2025
- 100% of Vuse and glo markets with device Take-Back schemes in place
- 30% average recycled content in plastic packaging by 2025
- -25% reduction in waste generated by 2025 (Updated Target)4
- 90% recycling rate of waste generated by 2025 (Updated Target)
- <1% waste going to landfill by 2025 (Updated Target)
Biodiversity and Ecosystems
- 100% of wood used by our contracted farmers for tobacco curing to be from sustainable sources
- Zero gross deforestation of primary native forests in our paper, pulp and Tobacco Supply Chain5
- Net Zero deforestation of managed natural forests in our paper, pulp and Tobacco Supply Chain5
- Net positive impact in our Tobacco Supply Chain5 on forests by 2025
- Zero conversion of natural ecosystems in our Tobacco Supply Chain5 by 2025 (Updated Target)
Water
- 35% reduction in water withdrawn by 2025 vs 2017 baseline
- 100% of operations sites Alliance for Water Stewardship (AWS) certified by 2025
- 30% of water recycled by 2025
Human rights
- Zero aiming for zero child and forced labour6 in our Tobacco Supply Chain7 by 2025
- 100% of product materials and high-risk indirect suppliers to have undergone at least one independent labour audit within a three-year cycle
Farmer livelihoods
- Prosperous Livelihoods We are committed to working to enable prosperous livelihoods for all farmers in our tobacco supply chain8.
Responsible Marketing & Transparency in Communications
- 100% of our marketing to be responsible
Ethics and Integrity
- 100% aiming for adherence to our Standards of Business Conduct (SoBC)
Sustainability Governance
- Effective management of sustainability governance
Ultimately, ESG at BAT means building A Better Tomorrow™ not just for us, but for all our stakeholders.
Our Combined Annual and ESG Report 2022 provides detailed information about our policies, management approach, performance and targets for all our environmental, social and governance (ESG) priorities.
Our online Combined Performance and ESG summary show how this creates shared value for our stakeholders to build our purpose for A Better Tomorrow™.
For more information on what ESG means at BAT, please see the attached investor presentation.
Notes:
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
† Our Vapour product Vuse (including Alto, Solo, Ciro and Vibe), and certain products, including Velo, Grizzly, Kodiak, and Camel Snus, which are sold in the U.S., are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance.
- Compared to 2020 baseline. Comprises 50% reduction in Scope 1 & 2 and 50% reduction in Scope 3 GHG emissions. Scope 3 emissions target includes purchased goods and services, upstream transportation and distribution, use of sold products and end-of-life treatment of sold products, which collectively comprised >90% of Scope 3 emissions in 2020.
- Due to the complexity of consolidating and assuring Scope 3 data from our suppliers and value chain, we report Scope 3 data one year behind other metrics.
- In 2022, we expanded our target to include all types of packaging, rather than just plastic packaging.
- vs 2017 baseline. In 2022 we increased this target to a 25% reduction by 2025, having surpassed our initial 15% reduction target already. The scope of this KPI relates to BAT's direct operations.
- 'Tobacco Supply Chain' refers to the tobacco supplied by our directly contracted farmers and those of our strategic third party suppliers, who participate in our annual Thrive assessment, representing over 80% of the tobacco purchased by volume in 2022.
- For further detail, see Modern Slavery Statement 2022, to be published in Q2 2023.
- Our goals cover all tobacco used in our combustibles & THP products ('tobacco supply chain'). Our metrics, however, derive data from our annual Thrive assessment, which includes our directly contracted farmers and those of our strategic third party suppliers, representing over 80% of the tobacco purchased by volume in 2022 ('Tobacco Supply Chain').
- Our goal covers all tobacco used in our combustibles & THP products and referred to in this report as 'tobacco supply chain'.