Companies with global footprint should prioritise climate action: Donato Del Vecchio

Donato Del Vecchio, the Group Chief Sustainability Officer at British American Tobacco, has attained a reputation for his expertise in Sustainability, Corporate and Regulatory Affairs and International Trade. With an illustrious career spanning across several geographies including, Europe, Africa, Middle East and Eastern Europe, Donato has been a passionate advocate for climate action and sustainability. This interview delves into the insights from a global corporate leader, dedicated to building a better tomorrow.

The Financial Express (FE): As we observe World Environment Day, we reflect on how sustainability has been placed at the forefront of global concerns following adverse climate change effects worldwide over the past few decades. In your view, how can leading corporations effectively contribute to climate action?

Donato Del Vecchio (DDV): The theme for this year’s World Environment Day—accelerating land restoration, drought resilience, and combatting desertification—highlights the urgent need for comprehensive environmental strategies. In the face of increasing climate challenges, sustainability has evolved from a choice to a necessity for corporations worldwide. Leading companies with a global footprint should place climate action at the core of their sustainability strategy. This entails committing to ambitious targets for reducing carbon emissions across supply chains, operations, and product lifecycles, in alignment with international climate agreements such as the Paris Agreement.

Transitioning to renewable energy sources like hydropower, solar, and wind is imperative for reducing carbon footprints and fostering a more sustainable energy ecosystem. Long-term investment in clean energy infrastructure is also vital to facilitate this transition.

At BAT, we are committed to our 2050 net-zero greenhouse gas (GHG) emissions target and our interim goal of a 50% emissions reduction by 2030. We have already achieved a 33.1% reduction in Scope 1 and 2 GHG emissions in 2023 (vs 2020 baseline).

FE: How would you integrate BAT’s sustainability strategy with its declared purpose of building ‘A Better Tomorrow’? How is BAT Bangladesh’s approach to sustainability aligned with today’s global agenda?

Donato Del Vecchio: BAT’s sustainability agenda, which underpins our purpose of building ‘A Better Tomorrow,’ involves a strategic integration of Environmental, Social, and Governance (ESG) priorities into our business. Our vision for sustainable future encompasses encouraging adult smokers to switch to a range of smokeless products – products with reduced risk potential to smoking. We know that reducing the health impact of our business  is a top priority of our stakeholders and shareholders, but there are many other sustainability areas we must continue to address.

Annually, we conduct a comprehensive Double Materiality Assessment. This process assesses how our operations, products and services affect external stakeholders, including the environment, communities, and broader society.

We have set measurable targets, such as reducing our carbon emissions, supporting local communities,  and promoting diversity and inclusion. We report on progress towards these targets through our combined annual and sustainability report, ensuring transparency and accountability.

We actively engage with stakeholders, including employees, customers, investors, and community members, to understand their concerns and expectations. Where feasible we form partnerships with organisations, and other businesses to tackle social issues collaboratively, actively communicating with stakeholders about our efforts and respond to their feedback.

We have implemented a series of sustainable business practices throughout our global operations, such as reducing waste, conserving energy, and sourcing materials responsibly. We also invest heavily into research and development focused on a multi category portfolio of smokeless alternatives, to add to the existing body of science on  their reduced risk potential compared to continued smoking.

BAT Bangladesh’s approach to sustainability is aligned with our global agenda, demonstrating our commitment to embedding sustainability across all our Group companies. BAT Bangladesh has embraced the group’s ambitious targets, such as renewable energy usage and improvements in waste and water management. BAT Bangladesh has been making considerable progress, particularly on the waste management and water stewardship front.

FE: Sustainability reporting has been made mandatory in Europe and voluntary elsewhere. How important is it for companies to commit to publishing these reports? Why has BAT Bangladesh published its sustainability report over the past few years?

DDV: The amount of “misaligned” mandatory disclosures required by regulators in many regions has been increasing and are a challenge for all companies. The range of new or enhanced mandatory ESG disclosure requirements have, on the one hand, pushed companies to be more transparent about their social impact. On the other, a degree of confusion has been created because the disclosures in one part of the world don’t necessarily speak to those in another. The situation is improving, but at a slow pace.

Consumer and Employee expectations are evolving, and we see consumers becoming more socially conscious, preferring to support companies that demonstrate a positive impact. A very similar trend for talent attraction and retention.

I believe that companies such as BAT Bangladesh with strong community impact initiatives are better positioned to attract and retain talent, an important factor for long-term success. Our investors recognise that a motivated and loyal workforce is a key driver of business performance.

Therefore, companies that prioritise their impact on communities are often more resilient in the face of social and economic changes, making them more attractive to investors looking for stable, long-term returns.

FE: What motivated BAT to join the Taskforce on Nature-related Financial Disclosures (TNFD), and how does this support your sustainability approach?

DDV: BAT's decision to join the Taskforce on Nature-related Financial Disclosures (TNFD) reflects our commitment to responsible environmental stewardship. Unlike climate change, which has established metrics like greenhouse gas emissions, measuring biodiversity and nature-related impacts is complex and location-specific. TNFD's voluntary disclosure recommendations and guidance seeks to fill this gap by providing a structured approach to assess, report, and act on nature-related dependencies, risks, and opportunities.

Given BAT's global reach and reliance on natural resources, managing our environmental impacts is a priority. TNFD's framework allows us to standardize reporting on nature-related risks and opportunities, enhancing transparency and accountability. This alignment with TNFD not only supports our environmental management efforts but also enables us to make informed decisions through which we hope to positively impact biodiversity and contribute to a more sustainable future.

FE: Are you aware of any flagship sustainability initiatives in Bangladesh? And how are they helping in addressing environmental and social issues?

DDV: To maintain biodiversity across various regions of Bangladesh, I am aware of a project called Bonayan, which has distributed over 125 million fruit, forestry, and medicinal plant saplings to farmers and stakeholders across 24 districts since the 1980s, all free of cost. Recognising the crucial role of medicinal plants in sustaining ecosystems, the project has established 119 medicinal corners to raise awareness and conserve rare and endangered indigenous medicinal plant species.

In alignment with the Bangladeshi government's goal to ensure 100% access to clean drinking water by 2030, a project called Probaho has launched its safe drinking water initiative in 2009. This project now provides clean water daily to over 300,000 people in marginalised communities, mitigating waterborne diseases and addressing critical issues such as arsenic contamination and salinity.

On another note, BAT Bangladesh invests significantly in good agricultural practices and community development initiatives for farmers. The impact of these actions is evident in BAT Bangladesh's recognition on Bloomberg's Sustainability List.

FE: Bangladesh has been successful at exporting high caliber talent all over the world. What’s behind this success?

DDV: Bangladesh is undergoing a transformative phase, transitioning towards middle-income status and aspiring to become a developed nation by 2041. This progress is driven by the dedication and capabilities of its citizens, particularly the young talent pool.

Bangladesh is fortunate to have a large number of skilled and ambitious individuals who are continuously enhancing their abilities to meet the demands of the global market. At BAT, we have over 50 Bangladeshi professionals in key mid to senior-level roles across our global offices. During my interactions with colleagues from Bangladesh, I have observed their drive, competence, and resilience, which are essential traits for thriving in today's dynamic business environment.