How to Sell Tobacco Responsibly
Back in November I blogged about ethically producing and marketing controversial products. I proposed this thought experiment:
“If you think product X is unethical (or maybe just morally ‘problematic’), can you engage in a constructive discussion about how to make that product more acceptable (while still selling it) or how to sell it more ethically?”
Today I got to see first hand what it looks like when a company tries to have such a discussion. I was invited to be part of a round-table discussion designed to provide Imperial Tobacco of Canada with constructive feedback on its ‘sustainability’ framework. (Imperial is now a member of Canadian Business for Social Responsibility. CBSR hosted the event.)
Here’s a link to Imperial’s Corporate Social Responsibility page. Their most recent report on their activities in this area is called Taking Responsibility…An Update On Our Commitments. That document is prefaced by a letter from CEO Benjamin J. Kemball, who (oddly, I think) signals that the company’s next report will be not a “social responsibility” report, but a “sustainability” report. And much of today’s discussion was framed in terms of “sustainability.” (I think the shift is odd, and I told them so at today’s meeting, because the sorts of things they’re doing, the sorts of activities they report on in this document, have little to do with what most people mean when they talk about “sustainability.” Corporate citizenship, maybe, or corporate responsibility, but not sustainability. For a forestry company, finding a way to operate sustainably is a worthy ethical goal. For most companies, it sounds like aiming low.)
According to the document cited above, Imperial’s key commitments (to sustainability or corporate responsibility or whatever) fall into 3 categories:
- Fighting the illegal tobacco trade;
- Developing harm reduced tobacco products;
- Preventing underage smoking.
(Those 3 are the focus of the document, though we talked this morning about other relevant stuff they’ve got going on, including some supply-chain management stuff, ethics requirements for suppliers, etc.)
Anyway, the document is interesting reading. And this morning’s conversation was a fruitful one. It was interesting to see what an apparently-earnest company can do to differentiate itself ethically — short of stopping selling its dangerous product.
I still think you can only get so far in terms of genuine “goodness” (whether framed in terms of corporate citizenship, sustainability, etc.) when the product you sell is one that you acknowledge to be dangerous. But I think the answer to my hypothetical question — about whether a constructive conversation can be had about ethics in the making and marketing of a controversial product — is clearly “yes.”
The Business Ethics Blog 
ChrisI don’t have any difficulty with you taking part in this discussion; again, it’s hard to see what harm could come from it. And for any number of reasons, it’s interesting to see what they’re doing — although I’m not so sure about their motives. And I suppose it’s almost always better if a company wants to do better. But I have my doubts in this case.I’ve looked at the “CSR” report (thanks for citing it, Chris), and it makes interesting reading.First, we’re talking about a tobacco company. It doesn’t produce a product that is dangerous; the product is deadly, and it’s known how many millions of people have died from consuming it. “Less dangerous” isn’t good enough. Actually, Imperial merely says its products are “risky” — like driving a car or going skiing, I guess.Here’s what their social responsibility report says: “There are many who criticize our industry and question our commitment to responsibility because of the health risks associated with our products. They believe that it is fundamentally impossible and contradictory for a tobacco company to be responsible. To us, it is precisely the risky nature of our product that makes it essential that we strive for the highest standards in corporate responsibility.”I would have thought that “the highest standards in corporate responsibility” would include not addicting and killing millions of people.Second, this is Imperial Tobacco, the company that set up large warehouses in the middle of nowhere just inside the US border from Canada, and stocked them with exports from Canada. Later, it was announced that it settled with the Canadian government for $600 million — in July of 2008. (Actually, as described in its “CSR” report, it was $250 million plus a percentage of sales up to a maximum of $300 million over the following 14 years. Discount those cash flows back and see how close to $600 million you get.) This agreement was, according to an ex-executive of Imperial, “chump change”, since it earned that much in profits each year from this profit opportunity.Readers might look at, e.g., http://www.canada.com/edmontonjournal/news/story.html?id=d88d26d7-1abe-434c-9786-d06483571d70“Fighting the illegal tobacco trade” is a bit rich for a company fresh from being nailed for smuggling and tax evasion, and which got away with a “chump change” settlement. If they’re so responsible, maybe they should have voluntarily coughed all of their illegally earned profits. If they’ve turned over a new leaf, so to speak, maybe you could suggest that at the next roundtable, if there is one. Or maybe disgorgement of profits isn’t sustainable. The “CSR” report does address their past smuggling and the settlement, which is supposedly in the business interest of Imperial and in the public interest, since it gives closure to this issue — and allows Imperial to work with the government to stop those other illegal sources of tobacco products. I guess they’ve seen the light!In any case, the questions for Imperial multiply. For example: (1)Have they really had a change of heart about what limits they place on earning money. E.g., September 2008 isn’t so long ago; and what’s the deal about “less risky” products? I note that they emphasize “less risky” products, but don’t mention “less addictive” products.(2) Do their “harm reduced tobacco products” include “fewer” carcinogens, less nicotine, or what? A major promotion of “smokeless” tobacco, if it’s like snuff, trades lung cancer etc. for oral cancer. And pardon me for being suspicious, but if they successfully keep the nicotine level up and reduce the carcinogens, won’t they make more money — by selling their tobacco to people for a longer period before it finally kills them?(3) As they expand their exports to developing countries, will they be shipping their “harm reduced tobacco products” there? Or is this just about “us”, and not about “them”?Jim Gaa
Unconscionable. Is there anyone who doesn’t see through this smoke screen?–every pun intended. I admire you for being able to control yourself in that meeting–of course assuming that you did. I couldn’t have done it. It’s like Walmart pledging to help the environment by selling more efficient lightbulbs. Absurd, absolutely absurd.
Anonymous:I’m not sure I understand. I mean, I understand that you’re appalled, but you haven’t told us why. I’m not disagreeing, it’s just that you’ve given no reasons.(And I think Wal-Mart is more likely to do measurable good, environmentally, than any other corporation I can think of.)Chris.
Jim:Thanks for your comment, and for the pointers to lots of good info. It took me a couple of days of thinking to decide what I might add in response.A lot of your (very reasonable) skepticism points, I think, to reason to be skeptical of the notion of “social responsibility.” I’d love to ditch that notion, and just focus on “doing the right thing.”But I’m fully prepared to be agnostic — in fact, to argue for it — with regard to what “they” have in mind in pursing this CSR agenda, or whether “they” have had a change of heart. I think there literally is no answer to that question. The corporation is a legal entity in its own right, but its intentions and “heart” are complex, emergent properties. I suspect <>some<> of the individuals (maybe many) within Imperial are true believers: they think it’s OK to sell the product, but would like to do it in a morally-better way. That’s really just a guess on my part, and it isn’t a reason not to criticize the net result (i.e., a “socially responsible” company that markets a deadly product).Chris.
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