The 13th World Conference on Tobacco OR Health

All large listed companies today, particularly those engaged in controversial industries, need to develop effective CSR programmes in order to deal with the pressures brought to bear by, and the expectations of, governments, NGOs, consumers and other stakeholders. BAT appears to have realised this ahead of many peer consumer companies. The company's motives are open to being interpreted as cynical – as another lobbying effort intended to disguise the impact of its business conduct and protect itself against unwanted regulation. But, from a financial analyst's perspective, BAT's CSR programme has an important role to play in the debate about the long-term future of the company. Unless companies like BAT can convince stakeholders that they have a right to exist, they face the risk of being shut down, nationalised, or litigated into bankruptcy – with obvious significant implications for the values shareholders are likely to place on those companies. Scrutiny by governments, media, NGOs and health campaigners is today so intense that if BAT treats its CSR programme as a mere ‘smokescreen' – as opposed to an integrated part of the company's strategy and conduct - it faces severe reputational risk and a potential regulatory backlash, which could have a bad negative impact on the market's valuation of the company.