British American Tobacco is the world’s second largest quoted tobacco group by global market share, with brands sold in more than 180 markets. For a business whose products pose real risks to health, it is even more important that we operate in a responsible way.
In 2001, British American Tobacco embarked on a formal stakeholder dialogue programme to drive their CSR activity
Stakeholder engagement is often not easy for any company, but for the tobacco industry, in particular, it is especially challenging after decades of widespread mistrust and scepticism among many key stakeholders.
At British American Tobacco, when we began our CSR journey nearly 10 years ago, we found ourselves facing that challenge. However, we knew that if we were to embark on a CSR programme that added value to the business whilst also meeting external expectations, we needed to find a constructive way to engage openly with our stakeholders.
Our stakeholder engagement process
In 2001, we embarked on a formal stakeholder dialogue programme to act as a catalyst to drive our CSR activity. Given most stakeholders’ wariness about our sector, a key element in developing our dialogue approach was to ensure that we used a robust process that stakeholders could trust, even if they weren’t prepared to trust us.
As a result, all our formal dialogue sessions have been conducted on the same basis – independently facilitated, externally assured and following ‘Chatham House rules’. Each dialogue is attended by either two-three senior managers, a Board Director or our Chief Executive. This not only helps to demonstrate commitment to our stakeholders, but also increases the traction that the output of dialogue can achieve in the business.
Dialogue is not just limited to our headquarters in the UK, but also takes place in our companies internationally, following the same robust process. This enables our companies to respond to their local stakeholders on local issues, as well as informing them of our global approach.
What we have learned
Stakeholder engagement has brought us many benefits beyond acting as a forum for the exchange of views. The robustness of our process, has lent itself to us working together with stakeholders to develop a number of initiatives in a way that would have been impossible without such dialogue.
For example, in our first social reporting cycle, we worked with stakeholders on our Group Employment Principles. In the second, with the help of stakeholders and the Institute of Business Ethics, we developed our Statement of Business Principles. Our Framework for CSR, was also developed with stakeholders in dialogue. The Framework takes each of the Core Beliefs from our Business Principles and sets out how we see the different roles in each area – where we should take the lead, where we should work with others and where we think others should take the lead.
More recently, dialogue has prompted us to publish a succinct statement of our approach to human rights. Dialogue has also underscored our new emphasis on ensuring that we can demonstrate the reach and effectiveness of our activity to help raise retailers’ awareness of the law on underage tobacco sales.
The challenges
It is not always possible to take up every stakeholder suggestion or address every issue that is raised in dialogue. Where possible, we try to provide an explanation for key decisions that may be contrary to a stakeholder’s suggestion. In such cases, if the stakeholder can see that their suggestion has been given due consideration, then they are more likely to trust the process, if not come to respect the company for being open about their decision-making.
Concern has been expressed about our lack of engagement with stakeholders who are most critical of the tobacco industry. This is an area we have tried to address by inviting such stakeholders to our formal dialogue sessions, but securing their attendance remains a challenge. We remain open to meeting with any stakeholder, including our critics.
Looking ahead
Stakeholder engagement has helped us to make the right kind of improvements to our business, has shown us things we might not otherwise have realised and has enabled us to connect with stakeholders who are willing to help us do the right things well.
We continue to hold stakeholder dialogue focused on our sustainability agenda and developing targets and plans to address sustainability issues. We are also exploring new methods of dialogue to ensure our engagement remains relevant and adds value to both our business and to our stakeholders.
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