MAINTAINING HIGH STANDARDS OF GOVERNANCE
How we act today impacts our business tomorrow.
Our values and Code of Conduct are embedded throughout Imperial Brands and drive our responsible approach. Our values reflect the behaviours we expect from everyone who works for us and our Code of Conduct is aligned with policies, internal controls and risk management processes that underpin our strategy.
How we conduct ourselves and our business can have wider impacts for society. Doing business in the right way, having integrity and not tolerating poor behaviour, fraud or bribery ensures we behave responsibly towards our stakeholders.
We have a zero-tolerance approach to bribery and corruption. This commitment is detailed within our Code of Conduct, which also contains our process for approval and recording of gifts and entertainment.
Our Code of Conduct is embedded throughout Imperial Brands and drives our responsible approach. It is aligned with the policies, internal controls and risk management processes that underpin our strategy.
The Code sets out the responsible behaviours we expect from employees in their dealings with colleagues, customers, consumers, suppliers, agents, intermediaries, advisers, governments and competitors. All employees and business partners are expected to act with integrity in accordance with the standards of behaviours set out in the Code.
As a responsible company we believe that how we fulfil our obligations to consumers is important, whether this is through our rigorous product testing and analysis or through our commitment to only market our products to adult smokers. We set high standards to meet the evolving needs of consumers and regulators, and to enable the development of new, less harmful products. Further information can be found on our dedicated Science website.
In 2018, we introduced our Supplier Code which is aligned to our Code of Conduct and available in 19 languages. We expect our suppliers to conduct their business in an ethical and responsible manner and comply with all applicable laws and regulations. Our Supplier Code sets out the behaviours we expect our suppliers to follow, and is embedded into our Procurement Policy and processes which govern how we select and contract with our suppliers.
We only select and do business with suppliers who can demonstrate that they operate in a manner consistent with our standards and Code of Conduct. We also expect our suppliers to ensure that their own business partners meet similar standards.
To further strengthen our governance framework in relation to the Environmental Social and Governance (ESG) issues facing the Group, we established a cross-functional ESG Steering Committee, to give the Board oversight of our ESG responsibilities.
The Steering Committee is chaired by the Chair of the Board of Imperial Brands and consists of cross-functional representatives from across the business including: Sustainability; Group Communications; Group Legal; Corporate Affairs; Next Generation Products (NGP) and Science; Leaf Sustainability; Procurement (NGP and Non-Tobacco Related Materials); Health and Safety; Governance; Investor Relations; Human Resources; Group Finance; Sales and Marketing; and Manufacturing and Supply Chain.
The Committee meets formally during the year and encourages members to stay in touch with each other on a day-to-day basis to ensure there is regular ongoing dialogue about ESG matters. The committee’s initial focus has been on establishing key performance indicators for all our top five ESG issues. We will start reporting against these new metrics next year, once they have been aligned with the new corporate strategy.
We have a rolling training programme to ensure ongoing engagement with the Code of Conduct throughout the business, including e-learning courses and face-to-face sessions. In 2020 we refreshed our onboarding process for new employees. Code of Conduct e-learning is now accessible via an onboarding portal as well as being assigned individually on day one through our learning platform.
Our Code of Conduct, which has been translated into 32 languages, covers a wide range of behaviours including Bribery and Corruption, Gifts and Entertainment, and Engagement with Governments and Political Bodies. See our Code of Conduct for more information. The training for the Code of Conduct covers the content of the Supplier Code.
We expect all employees and business partners to act with integrity at all times. If there are ever any concerns they can be raised independently via our Speaking Up service, which is available in 78 countries. In FY20 we appointed a new whistleblowing provider and the service went live at the beginning of FY21. Concerns can be quickly and easily reported online and by telephone. The reporting system is hosted by Got Ethics, an independent party guaranteeing security and anonymity for the complainant. See our Speaking Up Policy for more information.
We support reasonable, proportionate and evidence-based regulation that respects adult freedom of choice.
Our goal is to effectively operate in a rapidly evolving regulatory landscape and build trust in our products, not only with consumers, but also with regulators.
Regulation of tobacco products continues to increase and is largely driven by the World Health Organization (WHO) through; the Framework Convention on Tobacco Control (FCTC), the USA’s Food and Drug Administration (FDA) and the European Union, for instance through its Tobacco Products Directive (EUTPD). The European Union is putting in focus environmental issues via a set of directives under the umbrella of 'Green Deal', by introducing the Single Use Plastics Directive (SUP) and Plastic Tax and revising the Packaging & Packaging Waste Directive, all potentially relevant for Next Generation Products (NGP) as well.
We support reasonable, proportionate and evidence-based regulation that respects adult freedom of choice and recognises that tobacco products are enjoyed by more than a billion people worldwide.
We conduct thousands of analytical tests every year to make sure our products are compliant with regulatory requirements and our own high standards which are central to how we work. We also continue to explore opportunities for improving material recycling in our cigarette filters and packaging.
We actively participate in international method standards bodies, such as the International Standards Organisation (ISO), the European Committee for standardisation (CEN), and CORESTA (Cooperation Centre for Scientific Research Relative to Tobacco). The robust, reproducible, and repeatable testing methodology that we achieve in these forums underpins our commitment to regulatory compliance for governments, and product quality for our consumers. Further information is available on our Science website.
We are proud to work in all areas of tobacco leaf research, aiming to improve resistance to plant disease and leaf quality amongst other areas. Samples of the tobacco that we purchase are tested regularly for residues of plant protection products to ensure that our tobacco blends meet regulatory requirements, our technical requirements and the standards expected by our consumers.
Regular ingredients submissions, including toxicological information, are made to Competent Authorities based on the jurisdictions where products are sold. We ensure all materials and products are fit for their intended purpose, meet relevant specifications and comply with legislation and voluntary agreements.
We do not commission or conduct research involving animals and would not undertake such research unless formally required to do so by governments or by recognised regulatory authorities. We are committed to our position and will engage with regulators when faced with such requirements as we believe that animal testing is no longer required. Our approach is based on a ground-breaking publication released by the National Research Council USA (NRC) in 2007. Further details are available on our Science website.
Next Generation Products
We have a growing Next Generation Products (NGP) business which is underpinned by leading-edge science. We support proportionate evidence-based regulation that encourages smokers to use alternative products that have the potential for reduced harm. As vapour products do not contain tobacco, they should be excluded from all existing and future tobacco legislation, including excise.
We are dedicated to providing robust scientific evidence to regulatory authorities and the general public in order to participate in global harm reduction debate. We participate and play a role in major global events, by presenting our research and positions on key issues such as nicotine, product quality and technical standards.
Increasing focus of regulatory authorities in NGP is led in the US by the FDA and its Pre-Market Tobacco Application (PMTA) process that covers next generation tobacco and nicotine products as well; and in the EU through the revision of its tobacco-related directives and Batteries Directive.
The illegal market in tobacco undermines society’s efforts to ensure that tobacco products are sold responsibly, protecting children and government revenues.
Illicit trade is fuelled by excessive regulation and excise increases. We are totally opposed to illicit trade. It deprives retailers of legitimate sales and governments of taxes. Counterfeit products are not made to the same high standards as legitimate products.
Organised criminal gangs participate in illicit trade, using proceeds to fund other activities to the detriment of civilised society. Criminals are also unlikely to respect laws, such as those that prevent sales to minors.
We take a partnership approach to tackling illicit trade, working with dedicated security experts, to gather and share anti-criminal intelligence, partnering with law enforcement and border control agencies, using track and trace technology and conducting forensic analysis. We work collaboratively within industry working groups and with governments through Memoranda of Understanding and co-operation agreements.
Group Security initiatives continue to support the actions of Regulatory Authorities on a global basis. Our intelligence initiatives have seen marked success this year, directly contributing to law enforcement intervention in seven different countries and resulting in the closure of illegal production facilities, the seizure of 200 million illicit cigarettes, all alongside the dismantling of criminal gangs and the recovery of cash.
Our policy is to only supply our products to approved customers and markets. We work with customers to ensure that they are aware of our policy and their responsibilities to have control in their supply chain. To address supply chain integrity, we strictly apply a ‘Know Your Customer and Contractor’ process.