Environmental performance

EN1 Materials used by weight or volume

Partially reported

  2015
metric tonnes
2016
metric tonnes
2017
metric tonnes

2016/17 % change

Tobacco leaf1 822,791 773,295 831,013 7.5%
Direct materials
 (cigarette paper, wrapping, packaging, filters, glues, inks, plug wraps)
424,802 468,072 511,836 9.4%
Indirect materials
 (parts, cleaning materials, etc)
46,039 35,870 24,198 -32.5%
Total 1,293,632 1,277,238 1,367,047 7%
Per million cigarettes equivalent2 1.16 1.19 1.23 2.8%

In 2017, the Group’s total use of materials increased by 7% compared to 2016. Although we saw a 33.5% decrease in our use of indirect materials, our tobacco leaf consumption and direct material use increased due to an increase in volumes processed at our green-leaf threshing sites (GLTs) which, following a reduced harvest in 2016, returned to previous levels.

1 Leaf tonnage includes both unprocessed tonnage entering processing and processed leaf entering factories. The leaf tonnage measured for environmental reporting purposes is typically higher than tonnage used to manufacture product.
2 We have updated the previously reporting figure of 1.19 in 2016 due to correction of reported volume of MCEs in one site.

EN2 Percentage of materials used that are recycled input materials

Partially reported

  2015
 
2016 2017
Percentage of materials that are waste from external sources* 0.22% 0.47% 0.39%

The percentage of materials used which were reported as from recycled input materials remained relatively flat, with a slight decrease from 0.47% in 2016 to 0.39% in 2017. The recycled materials used in cigarette production are mainly outputs of the manufacturing process, such as tobacco dust from the leaf stem. The percentage of recycled material tends to decrease as manufacturing waste initiatives lead to less tobacco waste.

* Calculated based on materials used as input materials that were originally waste from external sources. This calculation is available for data from 2015. In 2018, we will review the scope of our reporting under this indicator, to further align with the GRI definitions.

EN3 Energy consumption within the organisation

Fully reported

  2015
 gigajoules
2016
gigajoules
2017
gigajoules
2016/17 % change
Non-renewable energy consumed3 7,716,379 7,369,693 7,502,775 1.81%
Of which, non-renewable fuels (e.g. oil, natural gas) purchased and consumed 4,978,581 4,736,840 4,993,469  
Of which, non-renewable electricity purchased 2,691,878 2,585,907 2,475,169  
Of which, steam / heating / cooling and other non-renewable energy purchased 45,920 46,946 34,137  
Renewable energy consumed4 970,671 908,035 992,763 9.33%
Total 8,687,049 8,277,728 8,495,537 2.63%
Per million cigarettes equivalent 7.80 7.76 7.66 -1.40%

Direct energy consumption in the organisation includes the primary energy used (e.g. natural gas for heating and fuel for our own or leased fleet) and electricity, steam, and hot water consumption by Group companies, based on the Greenhouse Gas Protocol CO2e emissions reporting methodology for scope 1 and 2 emissions.

You can view our goals and performance indicators for carbon emissions and energy on the Environment page.

3We have updated the following previously reported figures: Non-renewable energy consumed of 8,712,306 in 2015 and 7,032,708 in 2016; renewable energy consumed of 614,016 in 2015; and 882,330 in 2016; subsequent total of these two indicators for all previous years; and the direct energy consumption by primary energy source per MCE of 8.38 in 2015, and 7.73 in 2016. This is broadly due to a combination of applying 2016 updates to the GRI methodology of reporting direct and indirect energy consumption, which was not readily incorporated in our 2016 reporting; taking steps to improve our calculation methodology through implementation of our new reporting system; expanding the scope of recent and historical data to include three sites in one country for completeness, and correction of reported volume of MCEs in another site.
4Including sites and offices.

EN4 Energy consumption outside of the organisation

Fully reported

  2015
 gigajoules
2016
gigajoules
2017
gigajoules
2016/17 % change
Total energy consumed outside of our organisation (indirect energy consumed)5 2,427,249 2,814,894 3,133,310 11.31%
Per million cigarettes equivalent 2.18 2.64 2.82 6.94%

The most relevant and material energy consumption outside the organisation is associated with staff business travel and third-party distribution, based on the Greenhouse Gas Protocol CO2e emissions reporting methodology for scope 3 emissions. 

Energy consumption outside of the organisation increased by 11.31% in 2017. This was mainly due to an increased amount of freight, as well as changes to distances travelled following the closure of two sites and increased sales distribution. Additionally, since 2016, we have been able to capture more precise data on these areas from our supply chain network. 

You can view our goals and performance indicators for carbon emissions and energy on the Environment page.

5We have updated the following previously reported figures: 2,138,340 in 2015; and 2,351,797 in 2016; and the indirect energy consumption by primary energy source per MCE of 1.92 in 2015, and 2.20 in 2016. This is broadly due to taking steps to improve our calculation methodology, such as correction of freight-related energy calculations and being able to streamline data collection for air and sea freight data from a single source, as a result of centralising most of our supply chain reporting activities.

EN5 Energy intensity

Fully reported

We calculate energy intensity using the normalised output figure ‘cigarettes equivalent produced’. This includes manufacturing of tobacco products and materials, and green leaf threshing.

  2007
 baseline
2015
 
2016 2017
 
2016/17 % change
Gigajoules per million cigarettes equivalent (MCE) 11.82 9.98 10.41 10.48 0.71%

Our goal is to reduce energy use by 25% from our year 2007 baseline to 9.17 gigajoules per MCE by 2025. Against our 2007 baseline, we have achieved a total reduction of 11%.

You can view our environmental goals and performance against these for energy on the Environment  page.

EN8 Total water withdrawal by source

Partially reported

  2015 2016 2017
 
2016/17
% change
Total (cubic meters)6** 3,959,902 3,672,493 3,624,932 -1.30%
Cubic meters per million cigarettes equivalent (MCE)6 3.56 3.44 3.27 -5.18%

Our goal is to reduce the total amount of water withdrawn by 35% from our year 2007 baseline by 2025 (based on our intensity measure per MCE). By the end of 2017, we had made significant progress with a 33% reduction from baseline.

In 2017, total water withdrawn decreased by 47,561 cubic metres, a 1.3% reduction in absolute terms. In intensity terms, we achieved a 5% reduction compared to 2016.

You can view our goals and performance indicators for water on the Environment  page.

6We have updated the following previously reported figures: total water withdrawal in cubic meters of 3,667,979 in 2016; and water use per MCE of 3.43 in 2016. This is broadly due to expanding the scope of recent and historical data to include three sites in one country for completeness, and correction of reported volume of MCEs in another site. Additionally, following the implementation of our new reporting system, we have taken steps to improve our calculation methodology, which has resulted in slight adjustments to overall historical data.
 
**In 2017, we expanded our reporting capabilities to enable us report total water withdrawal broken down by source. With data for prior years only available for the ‘total’ figure (as shown in the table above), we report the breakdown for 2017 as follows (in million cubic meters): 1.834 from total municipal water supplies, 0.121 from fresh surface water, 1.669 from fresh ground water.

EN9 Water sources significantly affected by withdrawal of water

Partially reported

While our manufacturing processes don’t use as much water as other industries, we understand the reality of increasing water scarcity in some parts of the world and this has led us to expand the scope of our water risk assessments. Previously only conducted at our strategic, high-risk sites, these assessments were completed by all our factories and green-leaf threshing sites in 2017.

We identified where 13 of our operational sites are based, across nine countries, as high-risk locations for water scarcity. We continue to implement action plans resulting from the assessments.

EN10 Percentage and total volume of water recycled and reused

Fully reported

  2015 2016
 
2017 2016/17
% change
Total volume of water recycled and reused (cubic metres) 351,218 419,899 400,775 -4.55%
Water recycled and reused as a percentage of water withdrawn 8.9% 11.4% 11.1% -0.3%

Our goal is to increase the total amount of water we recycle to 15% by 2025 (against 2007 baseline of 10%). Currently our water recycling rate is 11%.

Despite  reductions achieved in total water withdrawn, our ability to recycle and reuse water was restricted by production volumes moving to sites where reuse is not possible due to local infrastructure not being available or yet in practice.

You can view our environmental goals and performance against these for water at the Environment  page.

EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

Partially reported

British American Tobacco does not own, lease or directly manage land for the growing of tobacco that is in, or adjacent to, protected areas and areas of high biodiversity outside protected areas.

However, although we don’t own any tobacco farms, we do have direct relationships with more than 90,000 contracted farmers. Using the biodiversity risk and opportunity assessment (BROA) tool we identified tobacco growing areas where our directly contracted farmers are near protected areas and areas of high biodiversity value outside protected areas.

Through our first round of BROAs (completed in 2010), we identified such areas in Chile, China, Kenya, Mexico, Peru, Uganda and Uzbekistan. In a few cases, biodiversity risks were identified, and action plans were put in place, including awareness-raising with farmers.

A second round of BROAs was completed in 2015 where we have identified some biodiversity risks related to soil management, water use, and wood use in Cambodia, China, Kenya, Nigeria and Brazil. All our leaf companies have BROA action and monitoring plans in place to help address and manage identified biodiversity risks and opportunities.

EN12 Description of significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

Fully reported

Our business now and in the future depends on biodiversity because it helps provide resources like clean water, healthy soils and timber. Companies have a responsibility to try to minimise their negative impact on biodiversity, as species and communities also depend on these resources. In addition, by protecting the biodiversity around tobacco growing areas, we have the opportunity to help make sure our future supplies of tobacco are secure.

Our Group Biodiversity Statement  sets out the principles we follow to manage our biodiversity footprint across our operations. The statement is based on a mitigation hierarchy which describes the steps to avoid, minimise, restore or offset biodiversity loss, wherever we operate.

From 2001 to 2015, we worked with three NGOs in the British American Tobacco Biodiversity Partnership: Fauna & Flora International, the Tropical Biology Association and Earthwatch Institute. The Partnership focused on some of the challenging issues surrounding the conservation and management of biodiversity within agricultural landscapes and the ecosystems on which we depend.

We’re very proud of this 15-year collaboration and what we collectively achieved. Although the Partnership has concluded, our commitment to biodiversity remains a priority and forms an important part of a new, broader programme that focuses on how we support farmers and their livelihoods.

Our Biodiversity Risk and Opportunity Assessment tool was developed by the Biodiversity Partnership to help our companies identify, assess and address risks arising from their impacts and dependencies on biodiversity and ecosystems in and around their leaf-growing operations. All our tobacco leaf growing operations have completed assessments and initiatives are in place to address the issues identified.

We are  members of the EU Business @ Biodiversity Platform   which promotes dialogue on the links between business and biodiversity. We contribute to two of the platform’s three workstreams: Natural Capital Accounting and Innovations for Biodiversity and Business. The third workstream is Access to Finance and Innovative Finance Mechanisms.

In 2017, we continued to work towards our target of eliminating unsustainable sources of wood used by contracted farmers’ in their curing activities, with 99% coming from sustainable sources. See wood fuel sources data for more information.

EN13 Habitats protected or restored

Partially reported

British American Tobacco does not own, lease or directly manage land for the growing of tobacco.

However, although we don’t own any tobacco farms, we do have direct relationships with more than 90,000 contracted farmers and run programmes in farming communities around the world focused on protecting the natural environment.

For example, our afforestation programme in Kenya, in partnership with tobacco farmers, tree farmers and local government, has seen over 380,600 trees planted. We’re also partnering with the County Government of Migori on a project to rehabilitate 42 hectares of the Agongo Hills, through planting 230,000 tree seedlings from a mixture of species.

Our long-running afforestation programmes in Bangladesh and Pakistan are considered to be the largest private sector programmes in each country. Our programme in Bangladesh has distributed over 95 million free saplings since 1980 and over 75 million trees have been planted in Pakistan since 1981.

EN15 Direct greenhouse gas (GHG) emissions (scope 1)

Fully reported

  2015 2016 2017
 
2016/17 % change
Direct CO2e emissions, Scope 1 (metric tonnes)7 330,576 311,561 326,242 4.71%
Scope 1 – metric tonnes of CO2e per MCE7 0.30 0.29 0.29 0.59%

Direct greenhouse gas (GHG) emissions (Scope 1) have remained relatively steady in intensity terms (per MCE) during 2017, but increased by 4.71% in absolute terms. This was driven by an increase in volumes processed at our green-leaf threshing sites (GLTs) which, following a reduced harvest in 2016, returned to previous levels, and changes to our factory footprint. Additionally, as we installed on-site generation in a small number of sites, we observed an increase in Scope 1 emissions and a decrease in Scope 2 emissions. 

You can view our goals and performance indicators for carbon emissions on the Environment  page, and our Scope 1 emissions definitions and reporting methodology on the data scope  page.

7We have updated the following previously reported figures: Direct CO2e emissions (Scope 1) in metric tonnes of 330,495 in 2015; and 311,172 in 2016, while the calculation of historical MCE figures was not impacted. This is broadly due to expanding the scope of recent and historical data to include three sites in one country for completeness. Additionally, following the implementation of our new reporting system, we have taken steps to improve our calculation methodology, which has resulted in slight adjustments to overall historical data.

 

EN16 Energy indirect greenhouse gas (GHG) emissions (scope 2)

Fully reported

  2015
 
2016
 
2017 2016/17 % change
Electricity indirect CO2e emissions, Scope 2 (metric tonnes)8 376,924 376,348 357,645 -4.97%
Scope 2 – metric tonnes of CO2e per MCE8 0.34 0.35 0.32 -8.71%

In 2017, our scope 2 emissions decreased by 4.97% (in absolute terms) and 8.71% (in intensity terms). This was primarily driven by energy efficiency initiatives, as well as some sites installing on-site generation and subsequently using less electricity from the grid. In addition, we also aligned our reporting of carbon emission from electricity used, with updates made by the International Energy Agency (IEA). The updated emission factors were slightly lower than those used in previous years and as a result we observed some additional reductions in our reported data.

You can view our goals and performance indicators for carbon emissions on the Environment page, and our Scope 2 emissions definitions and reporting methodology on the data scope page.

8We have updated the following previously reported figures: electricity indirect CO2e emissions (Scope 2) in metric tonnes of 363,501 in 2015; and 374,976 in 2016; and per MCE of 0.33 in 2015, while the 2016 calculation was not impacted. This is broadly due to expanding the scope of recent and historical data to include three sites in one country for completeness. Additionally, following the implementation of our new reporting system, we have taken steps to improve our calculation methodology, which has resulted in slight adjustments to overall historical data.
EN17 Other indirect greenhouse gas (GHG) emissions (scope 3)

Fully reported

  2015 2016 2017
 
2016/17 % change
Other indirect CO2e emissions, Scope 3 (metric tonnes9 178,621 208,013 230,017 10.58%
Scope 3 – metric tonnes of CO2e per MCE9 0.16 0.20 0.21 6.23%

In 2017, scope 3 emissions increased by 10.58% (in absolute terms) and 2.75% (in intensity terms). This was mainly due to an increased amount of freight, as well as distances travelled following the closure of two sites and increased sales distribution. Additionally, since 2016, we have been able to capture more precise data on these areas from our supply chain network. 

In 2018, we plan to review the measurement and reporting of our Scope 3 emissions, and to conduct environmental life-cycle assessments across our products.

You can view our goals and performance indicators for carbon emissions on the Environment page, and our Scope 3 emissions definitions and reporting methodology on the data scope page. 

9We have updated the following previously reported figures: other indirect CO2e emissions (Scope 3) in metric tonnes of 182,343 in 2015; and 176,015 in 2016; and per MCE of 0.16 in 2016, while the calculation of remaining historical MCE figures was not impacted. This is broadly due to taking steps to improve our calculation methodology, such as correction of freight-related energy calculations and being able to streamline data collection for air and sea freight data from a single source, as a result of centralising most of our supply chain reporting activities; and correction of reported volume of MCEs in one site.

EN18 Greenhouse gas (GHG) emissions intensity

Fully reported

  2000
 baseline
2015 2016 2017 2016/17 % change
GHG emissions (metric tonnes) per MCE10 1.52 0.80 0.84 0.82 -2.0%

Our long-term targets are to cut carbon dioxide equivalents (CO2e) emissions by 55% by 2025 and by 80% by 2050 from our year 2000 baseline (based on our intensity measure per million cigarettes equivalent). Against our 2000 baseline, we have made significant progress with a 46% reduction.

In 2016, we have committed to increase use of renewable energy across our operational sites to 25% by 2025. We believe our new focus on increasing the ratio of renewable energy will help contribute towards achieving further CO2e reductions against our long-term targets. In 2018, plan to review the measurement and reporting of our Scope 3 emissions.

You can view our goals and performance indicators for carbon emissions on the Environment page, and our carbon emissions definitions and reporting methodology on the data scope page.

10We have updated the following previously reported figures: CO2e per MCE of 0.79 in 2015 and 0.81 in 2016. This is broadly due to expanding the scope of recent and historical data to include three sites in one country for completeness, and correction of reported volume of MCEs in another site. Additionally, following the implementation of our new reporting system, we have taken steps to improve our calculation methodology, which has resulted in slight adjustments to overall historical data.

EN19 Reduction of greenhouse gas (GHG) emissions

Not reported – information not collated at Group-level

We do not currently collect data at Group-level on the amount of GHG emissions reduced as a direct result of initiatives; however, we’re a global company, which means we have a global footprint. Reducing the environmental impacts of what we do is a key priority, and something that involves every single person who works for us.

We have had a comprehensive Environmental, Health & Safety (EHS) management system for many years. We monitor and reduce our direct environmental impacts by making our operations more efficient. We also seek to address our indirect impacts by choosing suppliers with strong environmental credentials and encouraging our existing suppliers to improve their environmental performance.

To assess our environmental efficiency, we have set targets relative to the volume of cigarettes we produce, and we report our progress against these (see relevant indicators in this section and the Environment page).

EN20 Emissions of ozone-depleting substances (ODS)

Not reported – information not collated at Group-level

EN21 NOx, SOx, and other significant air emissions

Not reported – information not collated at Group-level

EN22 Total water discharge by quality and destination

Fully reported

  2015
cubic metres
2016
cubic metres
2017
cubic metres
2016/17 % change
Total water withdrawn6 3,959,902 3,672,493 3,624,932 -1.30%
Total wastewater discharged11 1,967,234 2,157,869 2,088,491 -3.22%
Process and sewage wastewater 1,957,757 2,110,047 2,080,386 -1.41%
Total water consumption 1,992,668 1,514,624 1,536,441 1.44%

In 2017, total water withdrawn decreased by 47,561 cubic metres, a 1.30% reduction in absolute terms, while total water consumption has slightly increased by 1.44%. These metrics are heavily influenced by the volume of green tobacco leaf processed annually, and were mostly driven by an increase in volumes processed at our green-leaf threshing sites (GLTs) which, following a reduced harvest in 2016, returned to previous levels.

Process and sewage wastewater have decreased by 1.41%, driven by a slight increase in our water recycling rate, despite the changes in our footprint and production volumes in some sites migrating to those where water reuse is not possible due to local infrastructure not being available or yet in practice.

Within our industry, unplanned discharges of water are unusual. We track reports of unplanned water discharge by our companies. Any incidents where there has been a breach of local regulation are reported under EN29.

You can view our goals and performance indicators for water on the Environment page.

11We have updated the following previously reported figures: total wastewater discharged in cubic meters of 2,156,265 in 2016; process and sewage waste water in cubic meters of 2,108,443 in 2016; total water consumption in cubic meters of 1,511,714 in 2016; and per MCE of 2.01 in 2016.  This is broadly due to expanding the scope of recent and historical data to include three sites in one country for completeness, and correction of reported volume of MCEs in another site. Additionally, following the implementation of our new reporting system, we have taken steps to improve our calculation methodology, which has resulted in slight adjustments to overall historical data.
 

EN23 Total weight of waste by type and disposal method

Fully reported

  2015
metric tonnes
2016
metric tonnes
2017
metric tonnes
2016/17 % change
Non-hazardous waste sent to landfills12 8,931 8,861 8,529 -4%
Non-hazardous waste recycled 119,997 119,847 121,933 2%
Non-hazardous waste incinerated 211 586 333 -43%
Other non-hazardous waste 1 0 0 -
Hazardous waste sent to approved landfills 184 70 71 1%
Hazardous waste recycled 1,496 1,125 1,097 -2%
Hazardous waste incinerated 68 51 53 -3%
Other hazardous waste 20 39 0 -99%
Total 130,909 130,580 130,060 1%
Per million cigarettes equivalent 0.118 0.122 0.119 -3%
12We have updated the previously reported figure of non-hazardous waste sent to landfills in metric tonnes of 8,857 in 2016. This is broadly due to expanding the scope of recent and historical data to include three sites in one country for completeness.  

In 2017 total waste generated remained relatively steady with a 1% increase. This was primarily due to an increase in construction waste due to factory expansions at a small number of sites for production of our Next Generation Products (NGPs). We generated less hazardous waste in 2017, compared to 2016. We anticipate construction waste may continue to increase, as we further expand our sites for manufacturing NGPs.

We recycle or reuse waste within our business, wherever possible. In 2017, we recycled 93.2% of our waste in 2017. Additionally, Group waste to landfill decreased by 2% in absolute terms compared to 2016 (8,927 vs 9,115 metric tonnes), primarily due to an increase  in our manufacturing sites with zero waste to landfill status. We were also pleased to achieve an 8% reduction in the amount of waste sent to landfill per million cigarettes equivalent compared to 2016. We have almost 25% of our manufacturing sites on zero waste to landfill status, and action plans in place to achieve this at 20 additional sites that already recycle over 90% of their waste.

You can view our goals and performance indicators for waste on the Environment page.

Please note: This metric does not currently include waste data for a small number of sites where the waste is incinerated on site without energy recovery due to recycling and landfill facilities being unavailable. In these areas we continue to engage with local regulators to identify the most effective waste management solution.

EN24 Total number and volume of significant spills

Not reported – information not collated at Group-level

EN25 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

Not reported – information not collated at Group-level

EN26 Identity, size, protected status and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff

Not reported – information not collated at Group-level

EN27 Extent of impact mitigation of environmental impacts of products and services

Not reported – information not collated at Group-level

While in-use, the main environmental impact of our combustible tobacco product range is second-hand smoke for which we are unable to provide data. We talk about the end-use environmental impact of our products below in EN28.

We support regulation that accommodates the interests of both non-smokers and smokers and limits non-smokers’ involuntary exposure to second-hand smoke.

We favour restrictions on smoking in enclosed public places. We believe that governments, employers, the hospitality industry, the tobacco industry, consumers and others can work together on practical initiatives. These include providing separate smoking and non-smoking areas and ventilation to reduce involuntary exposure to second-hand smoke.

Some stakeholders have also raised concerns regarding vapour emissions from Next Generation Products (NGPs). However, a 2018 evidence review by Public Health Executive England13, an executive body of the UK Department of Health, found that vapour had no discernible effect on indoor air quality and, to date, there have been no identified health risks of passive vaping to bystanders.

13Evidence review of e-cigarettes and heated tobacco products, a report commissioned by Public Health England, McNeill, A. et al., January 2018.

EN28 Percentage of products sold and their packaging materials that are reclaimed by category

Partially reported

The main environmental impact of our core product at end of use is cigarette butt littering.

For over 25 years we’ve researched the degradability of our cigarette filter tips to test for breakdown depending on the physical environment, e.g. on concrete, in water, in soil. Our current research shows that some constituents of our filters, such as papers, can degrade over a month to three-year time-period, in certain environments. However, other constituents in our filters, for example polymers or glues, research is inconclusive and requires further ecotoxicity and degradation testing. Therefore, our current conclusion is we know of no practical way of making consumer acceptable filters that would degrade over a duration that would not cause short-term littering problems.

We continue to explore further research, including collaborating with the industry and other partners on agreed standards for degradability and ecotoxicity testing and risks of filters to the environment. 

To address cigarette butt littering, BAT Group subsidiaries in nine countries participated in butt recycling schemes or ran awareness campaigns in 2017. For example, BAT Switzerland has a successful initiative in partnership with TerraCycle . Founded in 2001, TerraCycle is a global leader in the collection and further treatment of previously non-recyclable materials, including cigarette butts.

Additionally, our companies in Australia, Austria, Belgium, Czech Republic, Germany, Japan, New Zealand and our US subsidiary Reynolds American Inc. ran butt littering campaigns in 2017. This included working with a variety of stakeholders on activities such as butt littering communications campaigns, promoting the use of portable ashtrays and the production of marketing material designed to support bins replacement/cleaning and new cleaning machines.

We are also exploring ways to reduce the environmental impact of our packaging. For example, some of our brands are sold in packs that use no cellophane or are made from recyclable paper.

For our vapour products (e-cigarettes) that we sell within the EU, we follow the Waste Electrical and Electronic Equipment Regulations (the WEEE Regulations) and encourage consumers to recycle e-cigarettes by providing postal recycling services and product incentives.

EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

Fully reported

In 2017, there were two reported incidents of environmental non-compliance:

  • In Russia, a BAT subsidiary received a fine of approximately £1,200 for exceeding regulatory limits for iron levels found in the water discharged from our factory. The site has a wastewater management plan and continues to monitor iron levels.
  • In Turkey, a BAT subsidiary received a fine of approximately £10,500 for improper wastewater discharge, following changes to the local municipality’s discharge requirements. At the time of the fine, BAT was already building an on-site wastewater treatment plant to ensure compliance with the changes to the requirements, but unfortunately the construction of the plant wasn’t completed in time.
EN32 Percentage of new suppliers that were screened using environmental criteria

Fully reported

All our new and existing first-tier leaf and direct materials suppliers are screened using environmental criteria as part of our supplier programmes.

We conduct due diligence on our tobacco leaf supply chain through the Sustainable Tobacco Programme   (STP), which assesses and monitors suppliers’ performance in meeting industry-wide standards, including key environmental criteria. The programme assesses first-tier tobacco leaf suppliers, including our own leaf operations, and checks if they have the appropriate systems, governance and procedures in place to ensure high environmental and human rights standards on the farms they source from.

Suppliers complete an annual self-assessment covering different criteria under the key areas of: crop, environment, people and facilities. The environmental criteria include: sustainable water, soil and forest management, pollution control, waste and recycling, fuel and energy efficiency, greenhouse gas emissions, and biodiversity.

AB Sustain, a supply chain management company, independently reviews suppliers’ annual self-assessments, and conducts an independent on-site review of each supplier every three years. These include visits to tobacco farms and in-depth analyses of suppliers’ policies, processes and practices.

Since STP implementation in June 2016, two rounds of self-assessment have been completed by all our leaf operations and suppliers, and AB Sustain has conducted a total of 26 independent on-site reviews in 19 countries, covering 50% of our total tobacco leaf supply base. By the end of 2018, 100% of our leaf operations and suppliers will have had on-site reviews by AB Sustain.

In addition to tobacco leaf, the other direct materials we buy to make our products, such as paper and filters and the components that go into our Next Generation Products, represent our highest value strategic supply chain. All our direct materials suppliers have to undergo an independent on-site audit in order to be appointed as a supplier to BAT. They are then re-audited every three years.

The audits are conducted by Intertek – a highly respected global auditing company – and include criteria on forced labour, child labour, wages and hours, health and safety, environment and management systems. The environmental criteria include compliance with environmental permits, licenses or registrations; waste disposal; water discharge; and air emissions. If any issues are identified, suppliers are required to implement corrective actions. Intertek verifies they have done so either through a desktop review, for moderate issues, or a follow-up audit for more serious issues.

In 2017, Intertek audits were conducted on a total of 65 direct suppliers in 29 countries, representing 20% of our total direct Procurement spend.

While we always try to use the results of any supplier assessment or audit to support our suppliers in improving their performance, if they are unwilling to engage with us, we will terminate the business relationship.

EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken

Partially reported

The most significant environmental impacts in our supply chain relate to tobacco leaf growing, particularly in relation to climate change impacts, including deforestation, soil degradation and water scarcity. So we focus on working to mitigate these inherent risks and implement best practice environmental standards with all the tobacco leaf suppliers and farmers we work with.

All our first-tier tobacco leaf suppliers, including our own leaf operations, are reviewed against environmental criteria as part of the Sustainable Tobacco Programme (STP) – see EN32.

Through our global Leaf R&D, we develop new and innovative farming technologies and techniques which are rolled out to farmers as part of comprehensive agri-support packages by our global network of expert field technicians. They provide farmers with technical assistance on areas such as sustainable soil, water, biodiversity, and forest and pest management. The benefits of this can be seen when you look at agrochemical usage. For example in Brazil, data shows that the level of active chemicals used per hectare of tobacco is less than 2kg, which is one of the lowest in the country, compared to many other crops, which use as much as 20kg per hectare14.

We’ve had success, in Mexico for example, introducing technologies such as drip irrigation, which has been shown to increase water usage efficiency by up to 90%, as well as reducing soil erosion and salination, and ultimately boosting yields.

Deforestation, caused by farmers using virgin forest as a source of wood fuel for tobacco curing, is an issue we have been addressing for many years with great success. We are pleased to report that in 2017, 99% of farmers’ wood fuel came from sustainable sources.

14Superios School of Agriculture Luiz de Queiroz / University of São Paulo, Brazil, 2012.

EN34 Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms

Reported

Our Standards of Business Conduct   (SoBC) sets out the Group’s whistleblowing policy, which encourages anyone working for, or with, the Group who is concerned about actual or suspected wrongdoing at work to raise their concerns. The Policy outlines examples of wrongdoing, such as “endangering the health or safety of an individual or damaging the environment”. Our independently managed external Speak Up channels are available to raise concerns, anonymously if preferred, and these can include concerns around environmental impacts. These are available 24 hours a day in local languages and are highlighted in our internal training and communications. Our Speak Up  channels are also available to our business partners and suppliers.

Nothing was brought to our attention regarding any grievances about environmental impacts.

See LA16, HR3, HR12 and SO5 for details of suspected improper business conduct, contrary to our Standards of Business Conduct, reported in 2017.

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