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Table of Contents
1. Overview
2. Stakeholders
3. Ethical Audit
4. Issue Analysis
5. Recommendations
02
Overview
History of Tobacco in Canada
- First grown by the natives
- In 17th century grown by French settlers
- During WWI the demand for cigarettes rose
- Until recently tobacco farms were located in Ontario,
Quebec and the Maritimes
Major Tobacco Firms in Canada
- Imperial Tobacco
- Phillip Morris USA
- Rothmans, Benson & Hedges
03
Stakeholders
• Health Canada (The Government)Educating about consequences of smoking, issue laws.
• SocietyDirectly impacted by smoking.
• ShareholdersUse tobacco firms to generate value.
• EmployeesDepend on tobacco firms for employment.
• ConsumersAffected by changes in distribution or production of tobacco.
04
Stakeholders
• Business Partners, SuppliersTobacco farmers are heavily invested in tobacco production.
• Communities where plants are located.Factory closure negatively impacts small communities.
• MediaPromoting anti-smoking message, blocking tobacco ads.
• Environmental GroupsPressure firms to properly dispose of chemical waste.
• Not-For-Profit OrganizationsPursue various agendas.
05
Stakeholders06
PO
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5Health Canada
NGOs
Society
Shareholders
Employees
Consumers
The Media
Ethical Audit
Industry Canada CSR Implementation Framework
1. Conduct CSR assessment
2. Develop CSR strategy
3. Develop CSR commitments
4. Implement CSR commitments
5. Verify and report on progress
6. Evaluate and improve
07
1. Conduct CSR assessment
• Assemble a CSR leadership teamImperial Tobacco CSR Committee
• Develop a working definition of CSREconomic, social, and environmental responsibilities
• Review corporate documentsBusiness principles and code of conduct
• Identify and engage key stakeholdersLet’s talk initiatives
Ethical Audit08
2. Develop a CSR
• Build support with management and employees
CSR Committee
• Prepare matrix of proposed CSR actionsExpectations on committed issues
• Decide direction, approach, focus areas
Individually, together, and support others
Ethical Audit09
3. Develop CSR commitments
• Discussions with major stakeholders
Stakeholder meetings
• Create working groups
Internal experts and CSR drive team
• Consult affected stakeholders
Listen, decide, deliver
Ethical Audit10
4. Implement CSR Commitments
• Set measureable targets and performance measures
Key performance indicators not identified
• Engage employees
“Let’s Talk” workshops
• Create communications plans
Internally: Your Voice surveys
External: CiB Award of excellence
Ethical Audit11
5. Verify and report on progress
• Measure and verify performance
Bureau VERITAS independent assurance
• Engage stakeholders
Comprehensive web site inconclusive
• Report on performance
2006-2007 Social Report
Ethical Audit12
6. Evaluate and improve
• Evaluate performance
AA1000 assurance standards
• Opportunities for improvement
Bureau VERITAS highlighted key areas
• Engage stakeholders
Ongoing dialogue with stakeholders
to be republished two years from now.
Ethical Audit13
• Issues identified by Imperial Tobacco
• Health Effects
• Illicit Trade
• Underage Smoking
• Issues identified by ethical audit
• Questionable marketing
• “Healthier” products
Issue Analysis14
• Product proven to be harmful to the consumers
• Obligation to shareholders
• In 2006 cigarette sales fell to $2.7 billion
Health Effects15
• Illegal sales estimated to be more than 25% of total sales by 2010
• The quality of illegal cigarettes is questionable
Illicit Trade16
• In most cases, long-term addiction begins during youth
• 30% of underage (15-17yrs) and 60% of 18-year-old smokers purchase cigarettes at a corner store
Underage Smoking17
• Promoting cigarettes in contravention of Anti-Tobacco laws
Cigarette girls in clubs
• Laws prohibit sponsoring at sports or cultural events
Canadian Grand Prix
Questionable Marketing
18
• Smokeless tobacco products with fewer health risks than cigarettes
Snus
• Signifies company’s apparent dedication to harm reduction
• Not proven to help get smokers off tobacco
More likely a promotional push to get more people addicted to tobacco
“Healthier” products
19
Recommendations
• Genuine concerns for health would result in Imperial Tobacco’s efforts to completely eliminate tobacco products.
• Healthy alternative uses of tobacco Food and industrial products
Antibiotics and vaccines
• Entering nicotine gum and patches markets as a way of generating profits on sales of more ethical products.
• Improving company performance almost always comes at the expense of raising moral and ethical issues
20