1.0 Introduction
Business is generally known as an organisation, either as an individual or society that involved in the trade of goods, services, or both to consumers. As a whole, a business is doing commercially viable and profitable work. The business world has moral that to survive in the industry to make money and gain a face value and thus increase their share value or profit. To do this many companies are working towards it. In order to gain continuous respect in the business world, corporations take on a responsibility to assure the people of a country that this particular company not just sells several products but also does something for the nation in return. This corporate self-regulation is known as the Corporate Social Responsibility (CSR). The field of responsible business practice is one of the most dynamic and challenging subjects corporate leaders face today. It is argued that socially responsible behaviour can pay off in the long run, even where it involves some short-term sacrifice of profit.
CSR has been pioneered over the last two decades by the oil, chemical and tobacco industries due to their attempt to win back social respectability by changing their image. In this report, shall discuss how British American Tobacco plc (BAT), as one of the biggest tobacco companies in the world, allows their businesses to manage the economic, social and environmental effect of their operations to maximise the benefits and minimise the problems.
The tobacco industry contributes largely to the economies of over 150 countries, and there are more than 100 million people all over the world dependent on them for employment, which is more than 20 times the population of Singapore. Taxes for the tobacco industry are the main foundation of revenue for almost every government in the world. This revenue gathered from the tobacco company is then used by the government of several countries for better infrastructure and other internal as well as external development. In 2012, BAT paid the government for taxes around £32 billion. In a year the companies purchases around 400,000 tons of tobacco, which is about 80% of the farmers and suppliers volume in rising economies.

2.0 The importance of CSR to British American Tobacco
BAT was started in 1902 and has been in the business for more than 110 years. They operate 44 cigarette factories in 39 countries around the world, which make 720 billion cigarettes per year and around 300 brands in their portfolio. Today, the company employs more than 55,000 people all over the world. BAT is also the only company, who has engrossment in growing tobacco leaf, giving thousands of farmers to work for them internationally.
In 1990s, BAT suffered significant defeat in the courts costing them billions of dollars as a result of the Master Settlement Agreement; the tobacco industry also started introducing CSR policies to enhance its reputation. Since then, BAT has been strategically to prevent effective government regulations to reduce tobacco consumption by offering voluntary forms of corporate governance. With this regards, BAT is actively maintaining its status as a sustainable tobacco business operated with integrity and responsibility
BAT’s corporate CSR performance is monitored through a Board CSR Committee and at regional and local levels through combined audit and CSR committees (BAT, 2011). This structure supports the moving of CSR’s sustainability principles across the Group and allows performance against those principles to be monitored. With effective CSR programme, BAT is able to sharpen its decision making, improve its opportunities and reduce risks. It enhances brand image and uncovers previously commercial opportunities including new markets. It also reduces costs and attracts, retains and motivates employees.

3.0 British American Tobacco plc adopting the concept CSR
3.1 Harm Reduction
One of the BAT’s CSR objectives is to achieve leadership of the tobacco industry worldwide to create long term value to shareholder. With a revenue of over 15 Billion GBP (Year ending 2012) and profits of over 4.1 Billion GBP, BAT spent about 38 Million GBP on Group Environmental, Health and Safety expenditure. Their strategy for delivering their astuteness is based on Growth, Productivity, Responsibility and building a Winning Organization. These four majors are related to each other, and imperative for carrying the profit growth and long term business sustainability.
As mentioned in the BAT’s social report 2012, although the product that they sell is harmful, as their product causes real risk to health, but people still buy it. BAT tries to keep people away from smoking by writing a warning quote in the packet. This shows their social responsibility in the socio-economic view, which means they will be selling the product and telling the people to stay away from it.
It is proven that cigarette smoking is a cause of serious and fatal diseases and the only way to avoid the health risks associated with tobacco products is to not use them (Pain et al, 2012). Therefore, BAT has a responsibility to seek to reduce the health risks of their products.
BAT started clinical trials of a cigarette designed in 2011 to reduce the harm caused by existing products. 300 volunteers in Germany took part in the first six-week trial, which shows that prototypes substantially reduced exposure to some “toxicants” in tobacco smoke (Pain et al, 2012). This research is being taken very seriously by BAT as they believe in reducing smokers’ exposure to cigarette smoke toxicants would be an important research objective, given the numbers of people who smoke and the numbers who are likely to continue to smoke for the foreseeable future. In addition, the World Health Organisation (WHO) has estimated that as global population increases there will be also increase in the number of smokers worldwide. So developing reduced-risk products for those adults who choose to use tobacco products is a priority.
Mr. David O’Reilly, BAT group scientific director, said the prototype cigarettes would not be introduced as a new product line but, if further research showed they cut the risk of smoking, the technology used to produce them would be transferred to existing cigarettes. He pointed out that non-smoking tobacco and nicotine products, such as e-cigarettes and snus (Swedish mouth tobacco), are already “known to pose a substantially lower risk than cigarettes”.
However Harm reduction is about finding practical ways to minimise the health impact of an inherently risky activity or behaviour not to stop it entirely. The science of tobacco harm reduction is complex and challenging. BAT has committed to significant annual R&D budget which reflects how good they work in this area.

3.2 Environment and Environmental management
Tobacco plantation requires the use of a large amount of pesticides and pesticide use has been worsened by the desire to produce bigger crops in shorter time and often harm tobacco farmers because they are unaware of the health effects and the proper safety protocol for working with pesticides. These pesticides as well as fertilizers, end up in the soil, the waterway and the food chain. The wood for the curing of tobacco, leads to deforestation. Brazil alone uses the wood of 60 million trees per year for curing, packaging and rolling cigarettes. Deforestation is a factor in flooding, decreased soil productivity and general climate change.
BAT is the only international tobacco group with a significant interest in tobacco leaf growing, working with 200,000 farmers internationally, and covering some 400,000 hectares - mostly in developing countries. BAT provides direct agronomy support to around 160,000 growers in 19 countries, covering all aspects of crop production and environmental best practice (BAT, 2008). Most of these farmers grow tobacco on a small scale, alongside or in rotation with other crops such as rice, maize or beans, in mixed farming landscapes. As a responsible tobacco company, BAT’s Social Responsibility in Tobacco Production (SRTP) programme sets out the best practice by encouraging continuous improvement across their leaf supply chain. All suppliers of tobacco leaf to BAT are required to act in accordance with the SRTP programme (BAT, 2008). The SRTP programme outlines the concept of good agriculture practice to farmers such as Training farmers and providing them with technical support; Aiming to ensure appropriate farm safety measures are in place and followed; Careful selection of seeds; Soil conservation through good agricultural practices such as crop rotation, soil mulching, drainage and land contouring; Water resource conservation – avoiding ‘run off’ of agrochemicals and nutrients and avoiding over-application of fertilisers; safety standards and alternatives to manufactured pesticides and promoting afforestation programmes to enable farmers who require wood for tobacco curing to obtain it from sustainable sources.
However, there are still rooms for improvement in BAT’s safety and environmental control. In 2012, BAT’s Group Environment, Occupational Health and Safety expenditure in 2012 was £40.4 million (£38.9 million in 2011) and there were two reported fines for environmental non-compliance in Malaysia (£732) and the Caribbean (£21,639).

3.3 Child labour
BAT purchases almost 10% of its tobacco leaf (80 tonnes) in 2012 from Africa. BAT is the second largest purchaser of Malawi’s tobacco from global leaf processing companies Universal Leaf Corporation and Alliance One International, with Malawi producing most of the tobacco for Britain’s cigarettes. Malawi produces 6.6% of world burley tobacco exports, accounting for over 70% of Malawi’s foreign earnings (Otanes et al, 2006).
It is reported that Malawi has the highest occurrence of child labour in southern Africa (Otanes et al, 2006). In 1998, the International Confederation of Free Trade Unions (ICFTU) reported on the widespread use of child labour in the Malawi tobacco sector. Replacing child labour with adults paid the minimum agricultural wage would increase the cost of production by about US$10 million per year. It is said that the tobacco tenancy system in Malawi is partly responsible for child labour and poor working conditions in Malawi. Under this system, a tenant farmer agrees to grow tobacco on land provided to him by a landlord and agrees to sell the tobacco to the landlord. A tenant farmer receives seeds, tools, and food supplies from a landlord, who deducts the expenses from the sale price of the tobacco. Landlords prefer to hire an entire household at the price of one farmer. The tenancy system forces tenant farmers to use children in the fields to meet the terms of the labour contract. Moreover, families that farm tobacco often have to make the difficult decision between having their children working or go to school (Palitza, 2011). Unfortunately working often beats education because tobacco farmers, especially in the developing world, cannot make enough money from their crop to survive without the cheap labour that children provide.
BAT initiated their corporate social responsibility programmes focused on child labour, aimed to position each company as ‘‘socially responsible’’ via public relations campaigns. BAT co-founded the Eliminating Child Labour in Tobacco Growing Foundation (ECLT) in October 2000 with the nominal aim of protecting children from harmful agricultural work practices in tobacco growing through research and education. BAT took the initiative by issuing child labour policy statements in 2000. The statements mentioned a nominal commitment to the United Nation’s International Labour Organization (ILO) provisions on child labour (BAT, 2013).
Furthermore, BAT’s web page highlighted that, rather than actively and responsibly working to solve the problem of child labour in growing tobacco, the company acted to co-opt the issue to present themselves over as a ‘”socially responsible corporation” by releasing a policy statement claiming the company’s commitment to end harmful child labour practices, holding a global child labour conference with trade unions and other key stakeholders, and contributing nominal sums of money for development projects (BAT, 2013).
In addition, Channel 4’s Unreported World, a foreign affairs programme produced by Quicksilver Media Productions in the United Kingdom, also reported one of many projects funded by BAT under the “Eliminating Child Labour in Tobacco Growing Foundation” and explained the partnership between BAT and the other tobacco companies have with them. The programme makers say: “This project aims to get child labourers out of the fields and into education. And it seems to be working” (BAT, 2013).
From these points, it can be seen that the BAT is genuinely committed to improving the socioeconomic conditions of child and human right issue.

4.0 Conclusion
British American Tobacco, as one of the leading tobacco industries, which doing the business by selling the product as well as making the consumers aware of the harmful ingredients the product contains. They are taking their initiative to minimise the health impact by reducing the toxicity of tobacco, to reduce the impact on the environmental due to tobacco production and against child labour. This report outlined how the British American Tobacco does and their contributions to the society by developing better products, environmental conservation and eliminating child labour. It can be concluded that the British American Tobacco is very successful in adopting the concept of CSR.