British American Tobacco Plc

OWNERSHIP

Publicly Traded

RANK

(out of 15)

FINAL SCORE

3.34

(out of 5)

Operating Environment

British American Tobacco Plc (BAT) operates in all four Index Regions, and in 34 of the 36 Index Countries. Its top five countries by Volume Sales are the USA, Bangladesh, Russia, Pakistan, and Brazil.

BAT operates across HMICs (23 Index Countries) and LMICs (11 Index Countries).

BAT’s product portfolio consists of cigarettes, fine cut tobacco, moist snuff, heated tobacco, cigarillos, e-liquids, closed system vaping products, snus, non-tobacco nicotine pouches, chewing tobacco, pipe tobacco, and NRT products (non-patches).

Publicly Stated Position on Tobacco Harm Reduction

"Our purpose of building A Better Tomorrow by reducing the health impact of our business means that we are committed to our business transformation...As consumer preferences and technology rapidly evolve, the availability of scientifically-substantiated, less risky products is crucial to effective tobacco harm reduction and we are determined to transform our business.”
(Jack Bowles, CEO, BAT Annual Report 2021).

Change Since 2020 Index

BAT’s global Volume Sales of HRPs (in particular cigarettes) declined in 2019-2021 (CAGR: -1.2%). RRP Volume Sales increased (CAGR: +14.9%), driven in particular by its Vuse closed system vaping product in the USA, and Velo non-tobacco nicotine pouches globally.

BAT expanded its RRP portfolio in 2020 through the acquisition of Dryft Sciences LLC’s non-tobacco nicotine pouch product assets.

BAT increased its score in the Strategy and Management category, by further clarifying its remuneration policy in 2021, disclosing the specific amount (15%) linked to RRP performance.

Category Scores

Strategy & Management

BAT publicly acknowledges its role in, and has made a formal commitment to reducing, tobacco-related death and disease through its “Building a Better Tomorrow” strategy.

BAT has an objective related to tobacco harm reduction, and the objective is time-bound and measurable (“£5 billion in New Category revenues by 2025”).

Product Sales

BAT has the second-highest Volume Sales of HRPs (2021: 683.1 billion stick equivalents).

With 10% of its total volumes coming from RRPs, BAT has the fourth-highest score for Ratio of Volume Sales (RRPs versus HRPs).

Capital Allocation & Expenditure

Product Offer

BAT offers HRPs (cigarettes, fine cut tobacco, cigars and cigarillos and pipe tobacco) in 34 Index Countries, and RRPs (moist snuff, heated tobacco, e-liquids, closed system vaping products, snus, non-tobacco nicotine pouches, chewing tobacco, and NRT products) in 21 Index Countries.

In terms of product categories, BAT has four HRPs, compared to eight RRPs, in its portfolio.

Marketing Policy & Compliance

BAT’s Youth Access Prevention Policy (“Adult only” principle) is outlined in its International Marketing Principles, which is published on BAT’s corporate website.

BAT publicly discloses numbers and details of reported violations and established breaches of its Youth Access Prevention Policy, following audits by a third party.

Lobbying & Advocacy

BAT discloses its policy positions related to tobacco harm reduction through its corporate website and in its annual ESG report.

BAT does not disclose specific lobbying activities and memberships in all jurisdictions in which it operates.

Net Value Sales

In 2021

High-Risk Products

87.0%

Reduced-Risk Products

13.0%

Products Offered

In 2021

High-Risk Products

Reduced-Risk Products

Capital Allocation & Expenditure

In 2021

High-Risk Products

27.0%

Reduced-Risk Products

73.0%

ppts = Difference in percentage between 2021 and 2019