Ethical Performance
inside intelligence for responsible business


tobacco giant sets out long-term CSR plans

March 2004

The world’s fourth largest tobacco group has set out the corporate responsibility standards that it hopes to meet during the next few years.

Imperial Tobacco says it wants to ensure all its sites meet the human rights standards of the Organisation for Economic Co-operation and Development. It promises to engage with stakeholders ‘in a phased manner’, to draw up a social responsibility programme for its tobacco production, and to ‘enhance’ youth smoking prevention schemes by working with regulators. Imperial’s board has agreed these ‘key strategic priorities’, which have been published in the group’s first Corporate Responsibility Review.

The group also pledges to:
seek dialogue with governments on developing reduced-risk products
create key indicators to measure its social and environmental performance in time for a second report
train its managers in CSR
draw up and implement a climate change strategy
discuss at least two CSR issues with analysts and investors each year
increase its community investment and reassess its charitable giving
establish at least one partnership on international aid.

The group is to ‘incentivize appropriate behaviours’ on CSR among staff, although how this will happen is unclear. Senior managers will ‘devise and discuss’ incentives and sanctions by the end of next year. Some targets cover the period to the end of the 2004-05 financial year, but others are more long-term and many will be refined this year in light of what stakeholders say.

Imperial says communication and training on CSR are this year’s priorities. Eventually it will introduce a three-year rolling programme of social and environmental audits, including visits to low-scoring suppliers to agree improvement plans.

The group’s first report is partly verified by SGS, which has assured the sections on health and safety and the environment. Its second report will be ‘more concerned with baseline measurements of key performance indicators’ than with setting general goals, and the company will not ask a third party to verify social data until its figures become more robust.

Imperial has decided not to use the Global Reporting Initiative guidelines for now, saying this would present ‘enormous logistical problems’ arising from the need to collect data around the world.

Imperial, whose brands include Lambert & Butler, Embassy, Drum, Classic cigars and Rizla, grows less than two per cent of the tobacco it uses itself, preferring to work with specialist leaf suppliers.

It has 35 manufacturing sites, operates in more than 100 markets worldwide, employs 17,500 people and has a turnover of more than £11.4billion ($21.5bn). It is only the second tobacco company to produce a social report, after British American Tobacco.

However Gallaher, the third tobacco company in the FTSE 100, is planning to release a social report this April.


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