BAT’s A Lesson In Sustainability
July 10, 2008
News just in: British American Tobacco (BAT) is in sustainability trouble. Again … no, yet again.
Actually, forget it. BAT falling foul of sustainability standards isn’t really news any more.
The company is one of the great bêtes noires of a whole collection of pressure groups, each keen to use it as an example of what can go wrong when corporations are unchecked. Highlights from the past six years include:
- 2002 – the World Health Organisation accuses BAT of using “lies and deception” to hook children into “a lifetime of addiction and suffering”
- 2003 – BAT becomes the last UK company to cease business in Myanmar following a direct plea from the UK Government
- 2005 – the company’s manufacture of cigarettes in North Korea, not reported in its annual report, comes to light
- 2006 – examining BAT’s systematic destruction of scientific documents, a judge concludes “the whole purpose was to keep evidence [concerning the health risks of tobacco] out of the courts”
- 2007 – Nigerian state governments sue BAT for systematically targeting underage smokers
- 2008 – BBC broadcasts evidence that BAT is continuing to ignore its own guidelines across Africa in order to sell to underage smokers
However, many of BAT’s practices are legally acceptable and it has won awards from the Association of Chartered Certified Accountants for its sustainability reports. So this should not be taken as a hatchet job on BAT.
It’s purpose, in fact, is simply to illustrate the point made in recent posts concerning the FTSE Environmental Technology Index and Caisse d’Epargne’s Financial Product Certification Scheme: that a company’s sustainability cannot be wholly measured using financial instruments.
For example:
- shredding documents may avoid hefty payouts, but does it help sustain the regulatory freedoms companies rely upon? [BAT strenuously denied the claim, but settled out of court to avoid disclosing further documents ]
- operating in a communist state may be cheap, but does it really help improve the lives of those who are paid the flat communist wage? [BAT have since announced they are going to sell the North Korean factory ]
- targeting young, impoverished smokers may bring in revenue, but does a 5 minute gasp of tar and nicotine help them sustain health and well being? [BAT have recently launched a Youth Smoking Prevention campaign ]
I think I’m morally obliged to point out that I’m an ex-smoker. However, I’m in no way part of the Ex Smoker Mafia and I find the recent wave of anti-smoking legislation deeply unsettling.
However, you cannot measure a smoker’s freedom to light up in financial terms, only the cost of allowing and maintaining that freedom. Similarly, better ways of measuring sustainability have to be found to replace the crude instrument of the monetary impact a company’s actions have.
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Written by Chris Milton · Filed Under Best Practices, Consumer goods, Corporate social responsibility
Comments
4 Responses to “BAT’s A Lesson In Sustainability”
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Freedom is a double edged sword. It means you are free to do what you like, but then so are others. And what they like, might not be what you like. Worse, it might be harmful all round… but then, freedome is a doubled edged sword.
Hi Calvin,
Of course it is. This is what is at the centre of the market / regulation debate: do you allow the freedom and take the risk, or do you regulate against the risk and so limit peoples’ freedom?
Nevertheless, finance can only measure the outcome of freedom (or the lack of it), not the freedom itself.
Best wishes
Chris
No one needs to smoke but smokers want to smoke. “Wants” always win over “Needs”. Even when cigarette prices go up and literally burnt the pocket, most smokers I know are extremely unwilling to give up their addiction. Smokers know very well that they are burning their life away but that is their choice. They do have the freedom to smoke or to quit.
Hi Vivienne,
You’re absolutely right … and the only thing which finally forced me to quit was the ever rising price of cigarettes.
My point is that money cannot measure that freedom, only it’s outcomes. Similarly, money cannot measure sustainability, only its outcomes.
Thus, businesses need to re-evaluate their “wants” and “needs” to ensure they aren’t influenced by a similarly narrow, almost obsessive, focus upon money, so burning away the regulatory environment within which they do business .
Best wishes
Chris.