british american tobacco p.l.c. sustainability report 2010 - Environmental performance

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Sustainability Report 2010

We track Group efficiency performance using the normalised output figure ‘cigarettes equivalent produced’. This includes manufacturing of tobacco products and materials and green leaf threshing.

EN1 Materials used by weight or volume
 2009
metric tonnes
2010
metric tonnes
% change
Tobacco leaf*858,241859,9740.20%
Direct materials
(cigarette paper, wrapping, packaging, filters, glues, inks, plug wraps)
421,716433,8552.88%
Indirect materials
(parts, cleaning materials, etc)
38,16432,604-14.57%
Total1,318,1221,326,4330.63%
Per million cigarettes equivalent 1.21.232.50%

*As leaf tonnage includes both unprocessed tonnage entering processing and processed leaf entering factories, leaf tonnage measured for environmental reporting purposes is typically higher than tonnage used to manufacture product.

The rise in leaf and direct materials and the decrease in indirect materials were driven by more detailed measurement, changes to demand in some markets and one-off events in others.

EN2 Percentage of materials used that are recycled input materials

In 2010, 0.21 per cent of materials used were reported as recycled input materials, an increase on 0.17 per cent in 2009.

These are mostly reconstituted tobacco products, made from by-products of the manufacturing process.

EN3 Direct energy consumption by primary energy source
 2009
gigajoules
2010
gigajoules
% change
Sites and offices8,102,5457,997,668-1.29%
Fleet and other vehicles1,904,1011,865,089-2.05%
Total10,006,6479,862,757-1.44%
Per million cigarettes equivalent 9.109.130.33%

Direct energy includes both primary (e.g. natural gas for heating) and intermediate (e.g. electricity for lighting) energy used by Group companies (WBCSD scope 1 and 2).

Despite dramatic weather patterns witnessed in 2010, there was a decrease in total direct energy consumption driven primarily by various energy reduction programmes and site rationalisation. However, our overall energy efficiency measure increased due to a reduction in production volume.

EN4 Indirect energy consumption by primary source
 2009
gigajoules
2010
gigajoules
% change
Total8,558,9248,561,7920.03%
Per million cigarettes equivalent7.797.931.80%

Indirect energy is the energy required to produce and deliver purchased electricity. As it is a function of many components from each location around the world, which are dependent upon the individual energy efficiency of local providers, the reasons for change are difficult to analyse at a Group level.

EN5 Energy saved due to conservation and efficiency improvements

Centrally, we collect qualitative information on these activities. In 2010, we continued with energy conservation programmes which include measuring and using alternative energy sources, including renewable fuels and fuels with a lower carbon footprint.

You can read examples of some of these activities in the environment section.

EN6 Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives

We do not report on this indicator as we do not believe it is relevant to our business.

EN7 Initiatives to reduce indirect energy consumption and reductions achieved

In line with management measures such as restrictions on business travel, we are expanding the use of communications solutions, such as video teleconferencing facilities, which, over time, could lead to further reductions in business travel.

You can read examples of some of our other initiatives in the supply chain section.

EN8 Total water withdrawal by source
 2009
cubic metres
2010
cubic metres
% change
Total4,846,1414,481,075-7.53%
Per million cigarettes equivalent 4.414.15-5.90%

Total water use in 2010 decreased to 4.48 million cubic metres. Performance against the normalised output measure, cigarettes equivalent produced, has also improved by 5.9 per cent. This was largely due to increased reuse of water, improved measurement with the introduction of water meters and site rationalisation.

EN9 Water sources significantly affected by withdrawal of water

This information is more relevant locally and we do not collate global data on it.

EN10 Percentage and total volume of water recycled and reused
 2009
cubic metres
2010
cubic metres
Total481,090445,110
% of water withdrawn9.93%9.93%
EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

Group companies own or lease 15,443 hectares of land (16,349 in 2009), of which 6,470 hectares (7,578 in 2009) are leased or owned by companies for conservation purposes.

The 5.5 per cent land reduction was largely due to our company in Ghana no longer leasing teak plantations, improved data collection and accuracy by our company in Brazil, and a site closure in Turkey. These reductions were offset by minor increases in owned or leased land as the result of our new sites in Romania, Algeria and Latvia and an improved inventory at our operations in the UK, Zambia and Switzerland.

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

Working in partnership with three NGOs – Fauna & Flora International, The Tropical Biology Association and the Earthwatch Institute – in the British American Tobacco Biodiversity Partnership we continue to develop our management of biodiversity issues, measuring our impacts, setting targets and reporting on progress.

These include the following 2011 targets:

  • Conduct research to verify the apparent return of wildlife to trial areas of re-established natural forest in Sri Lanka by 2013;
  • Review and revise our biodiversity risk and opportunity assessment tool for use in our next round of assessments of tobacco leaf growing operations by end 2011;
  • Continue to raise awareness of biodiversity issues through training workshops, engagement with farmers and our leaf managers, and our online biodiversity learning module; and
  • Aim for zero use of natural forest for directly contracted farmers’ curing fuels by end 2015.

‘The Economics of Ecosystems and Biodiversity’ (TEEB) initiative, led by the United Nations Environment Programme, has recognised the British American Tobacco Biodiversity Partnership as an effective example of how business can address biodiversity.

The study also recognised our Social Responsibility in Tobacco Production (SRTP) assessment programme as an example of industry best practice. The SRTP assessment is focused on driving improvement in the social and environmental performance of all our leaf suppliers. The process involves annual self-assessments and the implementation of improvement plans. These are then reviewed and assured by an independent company, LeafTc. In 2010, there were 18 independent SRTP reviews of leaf suppliers in eight countries. By the year end 93 per cent of suppliers had been reviewed at least once. Average scores show an improvement in 2010 – see SRTP performance data.

You can read the study in which the Partnership and SRTP are acknowledged at www.teebweb.org  Opens in new windowand find out more about the work of the Partnership at www.batbiodiversity.org Opens in new window.

In 2010, we completed biodiversity risk and opportunity assessments in all our leaf growing operations. Corrective action plans have been developed and are currently being implemented.

The biodiversity risk and opportunity assessments highlighted a range of issues, including:

  • Threats to soil and water health from non-tobacco agricultural activities;
  • Unsustainable populations and economic pressure on areas of forest;
  • Damage to riverbanks and the surrounding areas; and
  • Opportunities to improve biodiversity in afforestation projects.

Some inconsistencies in the application of the biodiversity risk and opportunity assessments were highlighted, so in 2011 the Biodiversity Partnership will review and revise the biodiversity risk and opportunity assessment tool.

Our Group Biodiversity Statement states aims to embed biodiversity conservation across our businesses. For more information on the Biodiversity Statement, please see EN14.

EN13 Habitats protected or restored

A number of the Biodiversity Partnership projects focus on the restoration or conservation of habitats. In 2010, the Partnership continued its work on native forest regeneration and watershed restoration projects.

In areas where fast-growing eucalyptus was planted as a source of fuelwood, but is now no longer required, we have an opportunity to look at ways to return these areas to native forest. In Chile and Sri Lanka, the Partnership is supporting our companies to identify approaches to replace areas of eucalyptus with native forest. In trial areas in Sri Lanka, natural forest is re-establishing itself effectively, while in Chile, where conditions differ, the regeneration has been slower. Research still needs to be completed in Sri Lanka to verify the apparent return of wildlife to the forest, which will be completed in 2013.

Our company in Uganda is supporting the Partnership to help local communities maintain native forest, through a programme of afforestation, education and activities to generate alternative incomes. The challenge has been to demonstrate the value to local communities of maintaining the regenerated forest, rather than using it for domestic and commercial fuel.

Souza Cruz, our subsidiary in Brazil, is working with the Partnership and a local NGO to develop a feasible method on how to implement a green corridor in Parana state. Initial scoping for a new joint project on sustainable forest and ecosystem management in Southern Brazil also began in late 2010.

In Indonesia the Biodiversity Partnership is working with our company and local stakeholders to look at forest degradation and declining water levels in farming communities.

EN14 Strategies, current actions, and future plans for managing impacts on biodiversity

Our Biodiversity Statement sets out the Group’s position. It includes a requirement for our companies to undertake biodiversity risk assessments to help incorporate biodiversity impacts management into business planning. The following commitments are included in the Statement, which is on the Biodiversity Partnership website www.batbiodiversity.org Opens in new window and at www.bat.com/principles Opens in new window.

  • We will always ensure that our business is in compliance with all international, national and local biodiversity regulations as a minimum requirement;
  • In all geographical areas of our own business operations, and for potential areas of future operation, we commit to assessing our impacts, i.e. we will identify areas of high biodiversity value and understand our impacts on ecosystem services;
  • These assessments and stakeholder engagements will lead to action plans to minimise, mitigate or offset our impacts, with effective monitoring mechanisms to ensure such action plans are implemented and progress is reported; and
  • We will also take steps to share information with suppliers, assisting them in understanding and managing their impacts on biodiversity, hence minimising our impact throughout the supply chain, e.g. in the sourcing of leaf and packaging materials.

Working with the Biodiversity Partnership has helped us to develop specific biodiversity tools and generate greater awareness of the issues within the Group and our supply chain. In 2010, we agreed the scope of work for the next five years of the Partnership, with a commitment of £1.5 million per year. There will be fewer but larger projects focusing on biodiversity in agricultural landscapes and the ecosystems on which they depend, specifically:

  • Reducing unsustainable use of forests and restoring natural forests;
  • Enhancing freshwater ecosystems, through improved vegetation cover and water management; and
  • Promoting agricultural practices that enhance soil health and biodiversity.
EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations by level of extinction risk

All Group companies are required to undertake a risk assessment to identify the presence of protected or sensitive areas, IUCN Red List species and any negative impacts due to company operations on the diversity of life and natural systems within the spheres of influence of company owned or leased tracts of land.

All leaf growing operations have completed biodiversity risk and opportunity assessments. The process for assessing biodiversity risks and opportunities includes the use of reference materials containing information on sites of biodiversity significance including IUCN protected area categories, RAMSAR wetlands, Important Bird Areas, World Heritage Sites, Estimated Ranges of Endangered Great Apes, Conservation International Biodiversity Hotspots, IUCN Centres of Plant Diversity, and information on vegetation cover and water bodies.

Our completed biodiversity risk and opportunity assessments identified no IUCN Red List species and national conservation list species being under direct threat from any of our leaf growing operations. However, given that many of our companies’ operations are in countries rich in biodiversity, updating the biodiversity risk and opportunity assessment tool in 2011 is a step we can take to further protect and conserve biodiversity and ecosystems.

The British American Tobacco Biodiversity Partnership will be seeking to use their expertise to further engage with a wider number of stakeholders on these issues. They will continue to work on the complex and challenging issues surrounding the conservation and management of biodiversity, within tobacco-growing and mixed agricultural landscapes and the wider ecosystems on which they depend.

EN16 Total direct and indirect greenhouse gas emissions by weight
 2009
metric tonnes
2010
metric tonnes
% change
Direct CO2 WBCSD 1393,531371,610-5.57%
Indirect CO2 WBCSD 2367,094371,9891.33%
Indirect CO2 WBCSD 3182,679177,805-2.67%
Total943,303921,404-2.32%
Per million cigarettes equivalent 0.860.85-1.16%

We report all greenhouse gases in CO2 equivalent. The source is primarily energy used and waste to landfill which produces methane. We do not include data on emissions of CH4, N2O, HFCs, PFCs and SF6 as they are estimated to be insignificant.

The reduction was primarily due to similar reasons as those for energy reduction in absolute terms, as well as sites switching to less carbon intensive forms of energy and marginal contributions achieved through waste to landfill reductions.

EN17 Other relevant indirect greenhouse gas emissions by weight
 2009
metric tonnes
2010
metric tonnes
Total1,465,7511,422,455
Per tonne of leaf cured6.15.4

We purchase tobacco from farmers and dealers. The curing of some types of tobacco by farmers using wood fuel results in greenhouse gas emissions. If the air curing method used by some farmers is also included, then the 2010 figure would be 4.2 metric tonnes per tonne of tobacco.

The improvement in 2010 reflects the continuous adjustments in our global sourcing, as well as increasing the proportion of tobacco we purchased that was cured with waste biomass, which is considered to have zero emissions.

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved

Our greenhouse gas emissions are represented by CO2 equivalent derived from our energy use and waste sent to landfill.

We have energy conservation initiatives in place across many of our operations. For example, in 2010, we developed a global reduction plan for reducing the use of natural resources at our factories which focuses on:

  • Assessment: to understand where and why resources are needed and how we dispose of waste;
  • Reduction: to reduce resource use and emissions in the medium and long term; and
  • Replacement: to investigate, develop and adopt alternative methods and technologies.

We are also piloting a number of initiatives to improve warehouse and transport efficiency. In Trade Marketing & Distribution, we have rolled out the first phase of our plan to improve fuel efficiency. This included developing a scorecard of fuel consumption data to monitor progress and identify areas for improvements.

For more information about these, please see the supply chain section of this Report.

EN19 Emissions of ozone-depleting substances by weight

We do not report this data as emissions of CH4, N2O, HFCs, PFCs and SF6 are estimated to be insignificant.

EN20 NOx, SOx and other significant air emissions by type and weight

We do not currently report other greenhouse gas data, such as NOx and SOx emissions, as this is not collected at a global level.

EN21 Total water discharge by quality and destination
 2009
cubic metres
2010
cubic metres
% change
Total water withdrawn4,846,1414,481,075-7.53%
Total waste water discharged by Group companies2,590,9252,498,319-3.57%
Per million cigarettes equivalent 2.362.31-2.12%
Process and sewage waste water2,590,9252,498,319-3.57%
Stormwater discharged   
Total water consumption2,255,2161,982,756-12.08%

The 2010 reductions in waste discharge were largely due to increased reuse of water, improved measurement with the introduction of water meters and site rationalisation. This was partially offset by identification of leakages in some locations.

Within our industry, unplanned discharges of water are unusual. We track reports of unplanned water discharge by our companies and will report on any incidents where there has been a breach of local regulation.

EN22 Total weight of waste by type and disposal method
 2009
metric tonnes
2010
metric tonnes
% change
Non-hazardous waste sent to landfills21,37319,087-10.70%
Non-hazardous waste recycled109,340112,9943.34%
Non-hazardous waste incinerated4374799.61%
Other non-hazardous waste230159-30.87%
Hazardous waste sent to approved landfills456340.00%
Hazardous waste recycled1198183953.51%
Hazardous waste incinerated2146119.05%
Other hazardous waste387289.47%
Total132,682134,7411.55%
Per million cigarettes equivalent 0.1210.1253.31%

The 2010 changes were largely related to improved data accuracy. Positive impacts were achieved by an increase in recycling and efficiency improvements at a unit level.

We approach waste as another raw material and we recycle or reuse it within our business or that of others. We aim to reduce our waste to landfill towards our 2012 goal of 0.022 tonnes per million cigarettes equivalent, 12 per cent lower than our 2007 baseline, and to recycle at least 85 per cent of our waste each year.

EN23 Total number and volume of significant spills

We had no significant spills in 2010.

EN24 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

We do not report on this indicator as we do not believe it is relevant to our business.

EN25 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

No such impacts have been reported as a result of our companies’ activities. All our leaf growing operations have completed biodiversity risk and opportunity assessments and are implementing corrective actions (see EN15). This activity is part of the work of the British American Tobacco Biodiversity Partnership.

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

Using life cycle analysis, we are identifying opportunities to improve sustainability performance in our supply chain.

Our Sustainable Business Assessment  tool uses data from our life cycle analysis studies to compare the potential impacts of new products, components or packaging. It has already resulted in a number of changes, such as using snus packaging tins that are made of a single, rather than multiple, material type.

In 2010, we focused on improving its quality and consistency and a panel was set up to review completed assessments and the subsequent decisions made. This highlighted a need for further training, so we introduced drop-in surgeries and forums for our product developers. We completed six life cycle analysis studies in 2010.

For more information, please see the supply chain section of this Report.

EN27 Percentage of products sold and their packaging materials that are reclaimed by category

Approximately 50 per cent by weight of our products is normally consumed. The amount of product actually reclaimed is not measured as it is not within our control.

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations
 2009
£
2010
£
Total fines1,73297
No. of non-compliance incidences21

In 2010, Group companies reported one instance of fines for environmental non-compliance. Our business in Romania was fined £97 for occasional breaches of the permitted levels of contaminants in waste water.

EN29 Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce
 2009
gigajoules
2010
gigajoules
% change
Business travel557,856575,4793.16%
Freight1,655,3191,594,029-3.70%
Total2,213,1752,169,508-1.97%
Per million cigarettes equivalent 2.012.010.00%

The decrease in freight was primarily driven by a reduction in production volume and improved measurement.

Business travel has increased largely due to one-off events and improved measurement. However, these increases were largely offset by local business travel restrictions and higher use of e-meeting facilities such as telepresence, video conferencing and Webex.

EN30 Total environmental protection expenditures and investments by type
 2009
£
2010
£
% change
Capital improvements9,321,90514,267,59053.05%
Salaries and other operating expenses18,997,36718,493,323-2.65%
Fines, penalties and surcharges1,73297-94.40%
Total28,321,00432,761,01015.68%
Per million cigarettes equivalent 25.7630.3417.76%

Our global reporting systems are integrated for Environmental, Occupational Health and Safety related expenditures. 2010 capital expenditure increase was primarily driven by investment in waste utilisation process plant and investments in environmental and safety technical control solutions. There was one fine reported in 2010 for £97 (see EN28).