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British American Tobacco: Reporting in an Industry Everyone Loves to Hate

By Michelle Bernhart (True Blue Communications) on May 01, 2009 at 09:24am.
Content:

Let’s face it. Tobacco is a hugely unpopular industry in the sustainability/corporate responsibility world (and beyond). Leading environmental organizations like Ceres refuse to work with them. They are unquestionably excluded from socially responsible investing funds. And many people would like to see all tobacco companies go up, well, in smoke.

That’s why it’s encouraging that one company, British American Tobacco (BAT) tries to clear the air up front. The introduction to BAT’s online 2008 report begins, “Should a tobacco company aim to be sustainable?” then proceeds to answer its own question: “We see it as particularly important for businesses in controversial or challenging industries to address sustainability, as this is where the most significant issues exist and where the greatest progress can be made.”

The company has assessed materiality and the report does a good job outlining the process. Relevant pages also detail which issues were considered and which made the materiality cut, although it’s not clear to what extent external stakeholders played a role in the materiality analysis beyond one mentioned unsuccessful attempt to engage them in face-to-face dialogue. Regardless, the result of the analysis is a distillation of sustainability issues into five broad categories: harm reduction, marketplace, supply chain, environment, and people and culture.

Data is presented clearly using normalized values (e.g., “CO2 equivalent in 2008 rose by 6.8 per cent to 0.94 tonnes per million cigarettes equivalent”) and explanations are provided for increases or decreases. Year-to-year performance is easy to track, although context appears to be lacking, and in some cases readers may find it difficult to determine the relative value of a certain outcome. For instance, how many readers know whether 4.2 cubic metres water use per million cigarettes equivalent (BAT’s 2012 water consumption goal) is actually beneficial? A basis for comparison to other tobacco companies or an analogy from everyday life would be useful.

Communication:

Seeking to reduce her own impacts, this reviewer did not request a hard copy report. The web-based version of the report is clearly organized and written, but does require jumping to other areas of the site—apart from the sustainability report—to learn more about specific issues. In these situations, it can be tricky to get back to one’s starting point, but BAT has addressed this by ensuring that links open in new windows so users don’t get too lost. And, it’s noteworthy that so many corporate responsibility-related topics (marketing practices, youth smoking prevention, public smoking bans) are addressed in plain view on the regular BAT site. The degree of integration is heartening.

Throughout the sustainability report (and the regular site) even those who might disagree with the message would have to concede it’s clearly presented:

“A few countries have adopted strong measures, banning all indoor smoking in work and public places. We believe these go too far…. We believe that governments, employers, the hospitality industry, the tobacco industry, consumers and others can work together on practical initiatives.”

The report provides particularly precise sustainability targets, as in the following examples:

- Among farmers who require wood for tobacco curing, we will continue working towards our aim of less than 3 per cent of curing fuels being sourced from natural forest by 2015.

- We will aim to reduce our water use by 13.4 per cent to 4.2 cubic metres per million cigarettes equivalent by 2012 from our 2007 baseline of 4.85 cubic metres per million cigarettes equivalent.

Credibility:

The report was developed using GRI and underwent external assurance according to both AA1000 and ISAE 3000. Even so, this reviewer found it difficult to overcome her preconceived notions about ethics and transparency in an industry known for secrecy and manipulation. To its credit, however, the BAT report presents most information and opinions in straightforward terms without overt attempts to persuade. An example:“The term ‘tobacco harm reduction’ does not have a single meaning that is accepted by all. To the majority of public health policy makers, it means urging people not to start using tobacco products or to quit if they do. The US Institute of Medicine (IOM) defines it as ‘minimizing harms and decreasing total morbidity and mortality without completely eliminating tobacco and nicotine use’. The IOM concept is gaining acceptance among a section of the public health community….”

Astute readers can easily deduce which definition BAT prefers (the latter, in case it isn’t obvious), yet the report doesn’t attempt to beat anyone over the head with BAT’s position.

The sustainability progress table gets positive marks for acknowledging goals that were not met (4 out of 35 goals). At the same time, it was interesting to note that the report never mentions the widespread lack of trust that persists toward the tobacco industry, particularly as a result of the well-publicized lawsuits and resulting decisions against American companies. While BAT asks the obvious question about whether tobacco can even be sustainable, it fails to ask the other one lingering in our minds: can we actually trust anything this industry says?

Recommendations:

1. Report more vigorously on supply chain management efforts, which are mentioned in the report, but which represent an area of increasing concern to stakeholders across all industries.

2. Make more effort to engage with stakeholders, perhaps using social media or other tool that is different from previous unsuccessful attempts. Also, seek specific sustainability feedback online, rather than defaulting to the “we welcome your feedback” approach and an anonymous e-mail address.

3. Consider updating the materiality analysis, which was last done in 2007. Materiality assessment is ideally an ongoing process.

4. Provide information about BAT’s sustainability context for key performance indicators.

Michelle Bernhart is the founder of True Blue Communications LLC, which helps organizations strengthen sustainability performance, achieve strategic objectives, enhance brand, and manage risk through credible and engaging communications.