British American Tobacco's Chief Executive on Creating Shared Value for the Business and Society

“The concept of shared value underpins our whole approach to sustainability. It is about investing in the future for our business and society.

Sustainability is not a choice or something that is ‘nice to have’ – it is crucial to securing the future of our company and for creating shared value for our consumers, our shareholders and our stakeholders.

It is not a recent priority either – as a major international business in a controversial sector, we have long been aware of our responsibilities and our ability to address issues on a global scale.

Indeed, in our long history of focusing on sustainability and corporate responsibility, we have made significant progress – our strong market performance is delivering value for our shareholders, while we have also embedded more effective sustainability practices into our day-to-day business. These have included strengthening our approach to human rights, advancing sustainable agricultural practices among our farmers, developing industry-wide security systems for our supply chain that help prevent tobacco trafficking, and achieving a 45% reduction in CO2e emissions from baseline.

As a result, we have achieved inclusion in the Dow Jones Sustainability Index for the last 13 years, 12 of them as industry leader. Given the serious health risks associated with smoking, I am particularly proud of the progress we have made in harm reduction. In just a few years, our aspirations for this important area are becoming a reality, with less risky nicotine products now on the market in the UK, plans to launch in further markets and a strong pipeline of innovations for the future.

The receipt of the relevant licences from the UK medicines regulator for Voke, our new nicotine inhalation product, is another big step towards making available a range of products across the risk continuum, enabling consumers to choose the ones that are right for them.

Yet we still have a long way to go, and as much as our business has changed so has the world around us – from evolving consumer demands and emerging opportunities in a new generation of products, to increasing expectations of the role of business in society.

So we have now sharpened our approach further with the development of a new sustainability agenda, focused on the most material issues for our business and our stakeholders in three key areas: harm reduction, sustainable agriculture and farmer livelihoods, and corporate behaviour.

These are not only where we face some of our biggest challenges, but also where I see the greatest opportunities. Developing and promoting less risky products, supporting farmers’ livelihoods and operating to the highest standards of corporate conduct and transparency are all absolutely the right thing to do. They can add value to society, as well as helping to ensure we deliver our Group strategy and BAT continues to grow and thrive in the long term.”

Nicandro Durante, Chief Executive, British American Tobacco, March 2015