Responsibility is one of our five core values and embedded in how we conduct our business.
We want Scandinavian Tobacco Group’s business to be conducted to the highest standards. We are committed to honest and ethical behavior, and we want commercial partners, employees, civil society, regulators and others with whom we engage, to consider us to be trustworthy and transparent.
Our Code of Conduct describes the behaviour we expect from every one of our employees in order to ensure compliance and high ethical standards across our business. The Code of Conduct also comprises our fundamental beliefs and over-all policies in the area of Social Responsibility, including our commitment to respect human rights and labour rights, to limit our impact on the environment and our will to provide safe and healthy working conditions for our employees.
Based on the Code of Conduct we develop internal policies, guidelines and projects to turn the Code into actions and to continuously improve in terms of sustainability. Our Code of Conduct is available online on:
For the statutory statement on corporate social responsibility in compliance with section 99a of the Danish Financial Statements Act, see the Corporate Social Responsibility Report for 2019, which is available here:
Scandinavian Tobacco Group acknowledges the importance of limiting our environmental and climate impact. We seek to reduce the use of resources like water and energy in our production facilities, as well as effectively manage our waste.
People and communities
Our employees are the foundation for our success and their well-being is critical to us. We want all of our employees to enjoy safe and healthy working conditions, and we actively work to reduce the risk of accidents and work-related illnesses. We also believe that our employees should be treated with respect, trust and dignity. No form of discrimination is tolerated, and we embrace everyone irrespective of gender, nationality, age, religion, race, ethnicity, political opinion, union membership, sexual orientation, disability, health status or any other characteristic. We value the dialogue and collaboration with our employees and aim to apply good labour practices in all our operations. We respect that our employees have freedom of association, the right to be represented by a union and the right to bargain collectively. Terms of employment and working conditions, as a minimum, must always comply with local law, including any law on minimum wage.
We respect internationally recognised human rights as described in the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN Guiding Principles on Business and Human Rights and conventions describing the rights of children (Please see our Code of Conduct for the full list).
Scandinavian Tobacco Group neither accepts nor uses child labour in any part of our supply chain. We respect children’s rights, including their right to development and education, rest, and play. No child should be subject to forced labour or to child labour, including work for which the child is too young (below the applicable minimum age), or work which is mentally, physically, socially or morally dangerous to children, or that interferes with their schooling. Our aim is to avoid causing or contributing to adverse impacts on human rights, including children’s rights, and to address and mitigate such impacts if they occur.
Anti-corruption and bribery
Scandinavian Tobacco Group has a zero-tolerance approach to corruption and all forms of bribery, including facilitating payments.
Negative impacts associated with corruption and bribery include both reputation and legal risks which can damage the Group, our business partners, and society. This is why we maintain a zero-tolerance policy toward corruption and bribery.
Our view on smoking
Over the past approximately 60 years, media and campaigns have presented us over and over again with information about the harmful effects of smoking; effects which have been proven by scientific research and statistics. Scandinavian Tobacco Group shares the view that tobacco smoking is associated with risks of a number of diseases, and all our tobacco products carry warnings about the risks of smoking. However, not everybody gets ill by smoking. Some do, others don’t. Science has not yet given us a definite answer as to why this is so. But the risk increases the more you smoke and the more years you smoke. Smokers of mild tobacco products also expose themselves to a risk. Everyone has to take the risk seriously, balance the pleasure of smoking against the risk and then make a personal choice whether to smoke or not. We know that many people find it difficult to quit smoking. Some may use the expression that they become addicted to smoking. We believe that everyone can quit smoking. Millions of people all over the world quit every year, merely because they decide to do so and add willpower to their decision. However, there is hardly any doubt that smoking is habitual. Smoking involves a health risk and is habitual. Therefore, smoking is a choice that should be left to adults only. In our opinion nobody under the age of 18 should smoke.
Our view on regulation
Scandinavian Tobacco Group acknowledges that tobacco products are different from other consumer products and that the health risks associated with them require stricter regulation – in particular to prevent children and adolescents from taking up smoking. Tobacco products continue to be subject to increased regulation in terms of manufacturing, promotion, presentation, sale and consumption. We support proportionate and fact-based regulation of our products and market place. We ensure compliance with local laws and regulations. And when marketing our products, we apply self-imposed principles that in many cases are stricter than local regulations. When it comes to new regulation, we do what we can to ensure a balanced approach to our product categories. On the one hand, regulation should always take health issues and the protection of youth into account. On the other hand, regulation should also take into account that the typical consumer of cigars and pipe tobacco is a mature adult. The consumer profile and the different characteristics of the various tobacco product categories mean that legislation, where relevant, should differentiate between, for instance, cigars and other tobacco products. We want to be a trusted participant in the legislative process, and we have valuable input and views to share specific to our products.
Our view on diversity
We embrace workforce diversity as a source of strength. It leads to increased innovation, increased team performance and better problem solving abilities. It is our ambition that 25% of our shareholder-elected board members will be women by 2017. In 2013, we adopted a Diversity and Inclusion Policy guiding us in embracing diversity. The policy aims at ensuring stronger gender diversity in managerial positions which in the majority of business areas means increasing the number of women. Going forward, we convert the policy into actions that secure gender diversity across our business.We embrace workforce diversity as a source of strength. It leads to increased innovation, increased team performance and better problem solving abilities. It is our ambition that 25% of our shareholder-elected board members will be women by 2017. In 2013, we adopted a Diversity and Inclusion Policy guiding us in embracing diversity. The policy aims at ensuring stronger gender diversity in managerial positions which in the majority of business areas means increasing the number of women. Going forward, we convert the policy into actions that secure gender diversity across our business.
Due to the nature of our business we have many transactions between Scandinavian Tobacco Group business units in different countries. We are subject to various Danish and foreign taxes, including direct and indirect taxes imposed on our global activities, such as corporate income tax, withholding tax, customs duty, excise tax, value added tax and other taxes.
This policy sets forward the principles for our global tax management. The policy is set by the Executive Management of Scandinavian Tobacco Group in consultation with the Senior Vice President of Tax. It has been reviewed and approved by our Audit Committee.
Our tax policy is built on the following guiding principles:
Our tax affairs must be legally compliant. We engage local advisors to ensure that we are in compliance with existing regulations and to ensure that we understand not only the letter but also the spirit of the law.
We are cooperative with the tax authorities in all the jurisdictions where we operate on a basis of transparency and respect. Our tax affairs must withstand the test of daylight. We do not speculate on detection risk. Through our whistle-blower scheme we provide the opportunity for the employees to raise any issues of concern with complete confidentiality.
We have a continuous focus on identifying, monitoring and mitigating tax risks and on keeping proper controls in place to ensure compliance. We aim at having critical transactions covered by an agreement with the tax authorities where possible.
We structure our transfer pricing in a way that the expected tax outcomes are consistent with economic reality.
APPLYING OUR GUIDING PRINCIPLES
Management of Tax Risks
The many different taxes we are subject to and the complexity of our business require that we have a constant focus on tax management. We make sure that tax outcomes are taken into consideration in all important business decisions.
Implementation of tax policies and handling of daily tax matters is the responsibility of our Group CFO and our Senior Vice President of Tax. They work closely together with local finance managers, our commercial teams as well as external advisors to ensure tax compliance and awareness of tax risks. Processes relating to different taxes are allocated to specialist functions to ensure that key risks are identified and monitored and mitigating controls are in place.
Interpretation of tax legislation and case-law is complex and may change over time. As a consequence, we have continuous focus on evaluating our processes and controls to ensure that we remain in compliance with the law and international tax standards. The key risks are monitored for changes in business and tax legislation and processes and controls are updated accordingly.
Our Attitude to Tax Planning
Scandinavian Tobacco Group seeks to reduce the tax risk arising from its operations. We structure our tax affairs based on sound commercial principles and in accordance with our tax policy and relevant tax legislations. We seek external advice where appropriate. We use tax reliefs, allowances and incentives in the manner intended in the different jurisdictions where we operate. We structure our tax transfer pricing in a way that the expected tax outcomes are consistent with economic reality.
Relationship with Tax Authorities
It is our policy to be transparent and proactive in our dealings with the tax authorities in all jurisdictions where we operate. Where relevant we arrange regular meetings and have regular communication with the tax authorities. We are committed to transparency in all matters with the tax authorities. We realise that there will be areas where we have a different legal interpretation than the applicable tax authority or where the tax rules or regulations are unclear. Where this occurs in material matters, we will engage in proactive discussions with the tax authorities or ask for a tax ruling to settle such matters. Any errors in our tax returns are fully disclosed to the tax authorities within a reasonable period after they have been identified.