Imperial Tobacco is serious in its reporting, but this dry tome needs to be more accessible
Credibility is one thing. Boring is something else. Imperial Tobacco clearly wants to be taken seriously but its 2009 Corporate Responsibility Review takes serious to a new level – seriously boring. It details – at length – the management structures and processes supporting the company’s corporate responsibility activities. This certainly paints a picture of a robust approach but it is not very effective at communicating what the company has actually achieved.
This is despite a “performance” section covering eight key areas: products, sales and marketing, logistics, employees, occupational health and safety, supplier relationships, environment and communities.
Performance is the core of the report, but “operating responsibly” and “listening to our stakeholders” flesh out the process elements. There is also an overview section and a “fact file” highlighting key data.
The design is sober but attractive. Pictures are relevant and the graphs, for the most part, are easy to follow. Confusingly, environmental charts only include data up to 2008, as this is reported 12 months in arrears to allow for collection and verification. This is easy to miss unless you read the footnotes to the non-financial performance data table at the end of the review.
Roll out
Imperial Tobacco has certainly been busy. In 2008 it acquired Spanish rival Altadis in a move that more than doubled its staff to 38,000 and increased the number of factories from 31 to 56. This understandably dominates much of the review’s contents as the company rolls out a unified corporate responsibility framework for the enlarged business.
The emphasis on approach and management makes the review heavy going at times. It would benefit from some variation through more text boxes, sub-headings and bullet points. Most interesting are four case studies covering youth smoking prevention, employee consultation, sustainable paper sourcing for Rizla cigarette papers, and community projects in sub-Saharan Africa.
A highlights section at the beginning summarises focus areas and progress. Each chapter then begins with a table similar to Vodafone’s “we said, we have, we will” approach. Targets are clearly presented but most are qualitative and process-orientated, making it difficult to judge if they have been achieved.
Imperial Tobacco includes helpful symbols indicating if a target has been met or not, but the interpretation is open to question. The emphasis on qualitative targets continues into 2010 as the integration of Altadis nears completion. It would be good to see more quantified targets in future.
As you would expect, the company acknowledges the health impacts of its products and mounts a strong defence of its business. But while health is undoubtedly the biggest issue, other impacts should be covered in more detail.
Imperial’s logistics business is one of the largest in Europe. Yet the logistics section contains only a brief description of the steps it is taking to reduce environmental impacts. Similarly, a brief paragraph in the environment section covers steps to tackle product and packaging waste and litter.
The company has committed to reviewing other areas including international marketing standards, product stewardship, employment practices and community investment. Hopefully, this will include disciplinary action for breaches of internal and external standards, as well as product lifecycle impacts, ethnicity data (particularly for senior management) and community economic impacts.
New for 2009 is an eight-member stakeholder panel that comments on the review. It has an interesting make-up, including the Altadis human resources manager and the director of a UK pro-smoking NGO. They make several recommendations including one to extract key information for clarity and accessibility. Imperial Tobacco says it has addressed this but it could do more.
Information about performance and impacts is often hard to find. In the suppliers section, for example, you get half way through before you find out how many tobacco suppliers the company deals with, how many participated in the supplier engagement and assessment programme and how many on-site reviews were conducted.
The communities section includes a map of global manufacturing operations. This would have been more helpful if it had appeared at the beginning of the review.
The stakeholder panel commentary finishes with a recommendation that Imperial Tobacco adjusts the tone of future reviews to make them more accessible to a wider selection of stakeholders.
This should be interpreted broadly, addressing how a tobacco company can be sustainable. The review contains a vision of what this might look like from a process point of view, but it doesn’t come close to showing what it looks like in practice. For next time, Imperial Tobacco needs to focus more on outputs rather than management frameworks to meet the needs of a wider audience.
Tom Branczik is a consultant at Context
thomasb@econtext.co.uk
www.econtext.co.uk
Snapshot
Follows GRI? Yes, B+
Assured? AA1000 and data assurance.
Materiality analysis? No
Goals? Yes, although largely qualitative.
Targets? Yes, although largely qualitative.
Stakeholder input? Stakeholder panel summary commentary.
Seeks feedback? Yes
Key strengths: Management approach
Chief weakness: Too dry
Pleasant surprise: Work on youth smoking prevention.