How we measure up
We are committed to reducing our environmental impact across our supply chain and operations.
Our approach to reducing the environmental impacts of our operations is long established - 'excellence in environmental management' is one of our ESG priorities as part of our updated sustainability agenda. We have a comprehensive Environment, Health and Safety (EHS) management system that is based on international standards, including ISO 14001, and we monitor our Group-wide environmental performance for all BAT sites worldwide.
We operate in diverse locations around the world, where environmental legislation, infrastructure, the availability of renewable energy technologies and levels of water scarcity can all vary significantly. Our approach is therefore to understand our impact in these environments, and then put plans in place to minimise it.
We also have an internal reporting system for monitoring Group-wide environmental performance.. Each of our companies has an EHS Steering Committee, with overall environmental responsibility held by the General Manager or site manager. EHS is also a standing agenda item for management meetings and governance committees at area, regional and global levels. This has raised awareness of EHS risks across our business and our aim is to create a consistent approach for our companies in managing them.
Our Group Operations Director has overall responsibility for environmental management and our Management Board is responsible for our Environment Policy.
The Policy applies across all our activities including our supply chain and it requires our companies to:
Good environmental management is not only the right thing to do, it makes business sense given our dependence on natural resources. Climate change has long been part of our wider approach to environmental management and we’ve now elevated it to a standalone priority in recognition of the growing climate emergency.
Addressing our water and waste impacts has environmental benefits and delivers financial savings and efficiencies, while implementing sustainable agriculture practices with our 84,000+ contracted farmers helps to address environmental impacts and secure our tobacco leaf supply chain. In response to increasing concerns regarding plastics and post-consumption waste, we’ve established circular economy as a new priority area. We are focused on minimising our climate change impacts and preparing our business for the risks ahead.
This includes accelerating our science-based targets for reducing our carbon dioxide equivalent (CO2e) emissions and our new target to be carbon neutral by 2030 for our direct operations, and working with our farmers to increase their resilience. Through our long-standing environmental management systems, we have been steadily decreasing water use and increasing water recycling for several years. We are also reducing the amount of waste generated and sent to landfill and aim to recycle at least 95% of our waste each year.
Building on our progress, we’ve set ourselves even more ambitious and stretching targets:
Achieving these targets will require an accelerated approach to emissions reduction; and, as around 90% of our direct carbon emissions arise from our factories, green-leaf threshing plants and our large distribution fleet, this is where we primarily focus our efforts to reduce the carbon impact of our operations.
Examples include investing in energy-efficient technologies, switching to less carbon-intensive fuels and renewable energy sourcing. Currently, 26.8% of our Group energy use is from renewable sources and we have seen a 37.4% reduction in direct carbon emissions since 2017. We’re also optimising our logistics and fleet with standards for fuel efficiency, engine size and emissions, as well as increasing load capacity to reduce the number of journeys.
While our energy use continued to decrease in 2020, we recognise this is driven by engineering and efficiency improvements at our factories, such as boiler overhauls and LED lighting installations, as well as reduced production volumes and a reduced number of people in some sites due to COVID-19.
We anticipate the return to on-site working in 2021 may lead to a slight increase in our carbon emissions and energy use next year. Still, we remain on track for delivering against our carbon neutrality target.
We continued to digitally transform manufacturing in order to reduce tobacco and other waste, lessen energy usage, limit stoppages to production and save personnel time.
A range of scalable solutions support this focus, including advanced analytics, machine learning, robotic process automation, remote virtual engineering and smart infrastructure services. This transformation delivers a multitude of benefits, from a 5–10% reduction in waste to a smaller carbon footprint, lower utility costs and a significant reduction in costly stoppages, while saving thousands of working hours.
We also continued to deploy our energy conservation daily management system – a key element of our Integrated Work Systems (IWS), a resource management system aimed at identifying and eliminating losses in factory processes.
Further reductions in carbon emissions have been driven by increasing renewable sourcing in nine countries, including the US, Brazil and Romania, increased use of biodiesel in Brazil and on-site solar panels installed in five markets.
We have made improvements in energy use for both our owned and leased fleet vehicles. These include changes to distribution routes and models in Indonesia, Brazil and Turkey, and improved itinerary planning in the US.
We are also proud that three of our major sites are already going through external certification for carbon-neutrality. Our Scope 3 emissions from purchased goods and services decreased by 15.5% compared to 2017, driven by a reduction in purchase volume and decreases in fuel use for tobacco leaf curing.
We have a long-established approach to driving water stewardship across our own operations and tobacco supply chain.
While our industry is not particularly water intensive, with the changing climate, water scarcity is a growing concern. We need to make informed, risk-based decisions to effectively manage this essential natural resource.
We are further strengthening how we review water risk across our value chain, in line with best practice standards. We are using water much more efficiently in our sites. And with our world-class global leaf agronomy centre, we are driving innovation and rolling out sustainable farming practices for our contracted farmers.
Through our long-standing environmental management systems, we have been steadily decreasing water use and increasing water recycling for several years. We use water in our manufacturing and green leaf threshing sites, and to a lesser extent in our offices and distribution sites. Although our manufacturing processes are not especially water intensive, we do operate in water-stressed locations around the world, making water use reduction a high priority for the local environment and the communities we operate within.
We are helping the planet and generating competitive advantage with our circular economy strategy. We are reducing waste today, from innovative product design to responsible waste management across our operations. And we are equipping ourselves with insights and innovation, led by a cross-functional leadership team. To deliver a greener tomorrow, we have established a circular economy strategy for all our product categories. We are already adopting innovative, greener design opportunities. We have ambitious goals for 2025 in line with the UK Government’s ‘Plastic Pact’::
Our business now and in the future depends on biodiversity, as we rely on natural resources like clean water and healthy soils. We are advancing sustainable agriculture through our world-leading leaf science and a strong team of expert field technicians that support our 84,000+ directly contracted farmers and farming communities worldwide. We have a comprehensive approach to address any biodiversity impacts of tobacco growing. We do this by:
Many of the environmental impacts that are associated with growing tobacco are common across agriculture and the only way to completely avoid them would be not to farm any crop, which is clearly not a viable option. So we focus on working to mitigate these inherent risks and implement best practice environmental standards with all the farmers we work with.
Environmental criteria form a central part of the industry wide Sustainable Tobacco Programme and our expert field technicians 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 in agrochemical usage, which is generally significantly lower in tobacco growing than other comparable crops.
Also, because wood is often used as a fuel for curing, we have programmes in place to avoid and combat deforestation. As a result, in 2020 99% of our contracted farmers’ wood fuel came from sustainable sources.