British American Tobacco
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Year end: Dec 2017
Assessment date: Apr 2018
BAT evidences solid leadership through clear and forthright reporting on the board, its composition, matters considered, independent evaluation, as well as well-motivated executive compensation, though poor link to ESG issues.
The chairman introduces the company’s sustainability agenda, focused on three issues: harm reduction, sustainable agriculture & farmer livelihoods, and corporate behaviour. Reporting on human rights and fair labour in the supply chain shows an awakening to the challenges of fair trade, though metrics are still under-developed.
Moral DNA is difficult to craft in the tobacco industry where pursuit of morally improved products is nonetheless dependent on the profits generated by ‘sinful’ cigarette sales. Likewise, claims of compliance, while still fighting multiple lawsuits for corruption and harmful externalities of its business, present contradicitions almost impossible to reconcile with a credible moral position. BTI attempts to tread the fine line, but not convincingly.
Ethical advertising & promotion, and the treatment of customers, in particular underage customers, receives barely any reporting. BTI responds in typical heavy legal fashion to a significant lawsuit for the pollution of a watercourse, however, no evidence of proactive measures to to prevent future environmental impacts of operations.
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