British American Tobacco 2008 Sustainability Report

A Theoretical Discussion of the Ethical Issues of CSR and Sustainability in the Tobacco Industry:

A case study of the British American Tobacco 2008 Sustainability Report

BA-Thesis - Summer 2010
A Theoretical Discussion of the Ethical Issues of CSR and Sustainability in the Tobacco Industry -

A case study of the British American Tobacco 2008

Sustainability Report






By: Anders Wedendahl, BaMMC - 2010

Mentor: Karen M. Lauridsen

Table on Contents:

Table on Contents: 1

1 Introduction 2

1.1 Thesis Statement 5

1.2 Theoretical Framework 5

1.3 Methodology 6

1.3.1 Theory of Scientific Method – Kuhn’s Paradigms 7

1.3.2 Brief Overview of Thesis Structure 7

1.4 Delimitations 8

2 Stakeholders and Publics 8

3 The Semiotics of CSR and Sustainability 10

4 Ethical Discussion on Sustainability and CSR 11

5 Creating a Market for the Sustainability and CSR Concept 14

6 Using Assurance Programs to Build Credibility 16

8 Future Prospects for Sustainability and CSR Initiatives in the Tobacco Industry 22

9 Conclusion 26

10 Summary 28

11 Bibliography 30

12 Appendices 31

Total Characters: 54.136

1 Introduction

The field of Corporate Social Responsibility (CSR) in business has become an almost unavoidable concern and focus for large global companies as well as for small to medium sized enterprises (SMEs). This is seen through the growing amount of reports published by companies worldwide. “…2008 confirms an increasing trend in the evolution of sustainability reporting…” (Blanco & Souto, 2009, p.167).

The British American Tobacco Company (BAT) is no exception, and the company has published its CSR reports since 2002 (www.bat.com). The increasing focus from the public on the tobacco industry and the health risks associated with its products, give rise to ethical questions on as to why they are conducting CSR and sustainability reporting. Thus, a discussion on BAT and its engagement and investment in CSR and sustainability reporting poses several ethical questions which this thesis will discuss.

Moreover, the field of CSR and sustainability is a hot topic for scholars at all major business universities. Together with the growing debate on global climate challenges, renewable energy sources and a general public concern for the world’s environmental condition, the rising population number and a natural reaction from global companies, it seems only fair that companies take part in this debate and act upon these societal and political tendencies. This notion is supported by Aras & Crowther who claim “… the impact of corporate activity upon society and its citizens – as well as stakeholders including the environment – is considerable and has an impact not just upon the present but also upon the future.” (Aras & Crowther, 2009, p.279). Hence, the exponential growth on CSR reporting should not come as a surprise to anyone involved in the global business environment.
The content of these reports varies greatly. Therefore, the need for a global standardisation for CSR reporting is called upon in order to gain a more transparent look into the different companies’ CSR activities. This lack of transparency is one of the general concerns from major stakeholders as Blanco & Souto note, “They stakeholders are concerned that the existing CSR obligations are insufficient and voluntary CSR programs are inadequate.” (Blanco & Souto, 2009, p.161). In this case, the World Health Organisation (WHO), who is one of BATs major stakeholders, is reaching out towards BAT for a more open discussion on their CSR reporting and for a more transparent communication towards other major stakeholders. Moreover, they question the ethical issue of tobacco companies and their CSR work as they state in one of their reports:
“The business community, consumer groups and the general public should join policymakers and the public health community in being more vigilant and critical about tobacco companies’ CSR activities. Because, despite the industry’s claims, there is little evidence of any fundamental change in their objectives or their practices” (App. 1, p.10)
Moreover, the field of sustainability, which falls under the category of CSR, has become an important issue when discussing corporate ethics, values, beliefs and culture. Hence, there is reason to believe that business performance may be enhanced for companies adopting CSR versus those who do not. I shall give a more thorough explanation on what is meant by business performance later in the paper, and discuss whether there is reason to believe that CSR and sustainability reporting affects business performance.
Thus the growing interest for CSR engagement in the business environment leaves many questions to be answered. The general concern for the lack of a standardisation within CSR reporting and the vagueness of CSR as a concept and field within Public Relations (PR) opens up for an interesting theoretical discussion on especially the ethical issues of CSR reporting. As Laufer notes “Unsubstantiated and unverified social and environmental disclosures often amount to little more than public relations – issued to manage public perceptions, to respond to public pressure, or to react to perceived public opinion.” (Hooks et al. 2002; Adams, 2002 in Laufer, 2003, p.255). Hence, without clear guidelines and a strengthening of the CSR and sustainability concept there is good reason to question its validity.
With BAT being viewed as a company with a rather controversial product, namely cigarettes (App. 2), one might ask whether it is ethical to accept and honour BAT with rewards on their CSR reporting and accept their initiative towards becoming a globally accepted corporate citizen (App. 2, p.5). WHO is, as mentioned, a key stakeholder of BAT, being a large stakeholder with a very strong political agenda on tobacco and smoking. Hence, WHO questions the legitimacy of BAT as a CSR and sustainability reporting company.
Moreover, it is an interesting discussion whether the field of CSR and sustainability is a mere question of portraying a caring company, through the use of strong discourse, semiotics and if the assurance of legitimate corporate social responsibility is simply a way to generate a new area for business to take place. Within the field of CSR, and its practising scholars, there seems to be a rising scepticism towards the field and hence, a questioning of the ethical background for a tobacco company as BAT to take on CSR as eligible.
Therefore, it is interesting to further investigate the ethical discussion of the field of CSR and sustainability. Using BAT as an example can help develop the discussion in that it is a large global company (App. 2), and one that is challenged by one of the largest political organisations in the world. Furthermore, the nature of BAT’s product gives rise to questions on its attempt to be viewed as a corporate citizen. Moreover, the attempt of BAT to reach out to WHO opens up an interesting position, namely that the cooperation between companies and stakeholders could lead to a more transparent CSR work, and thus create a better chance of enhancing business performance.