Environment

Our approach to reducing the environmental impacts of our operations is long established. 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. In addition, 12% of our operational sites reported being certified externally against ISO 14001 in 2018.

We know that in order to support global efforts to combat climate change and unsustainable resource use, our long-term targets need to remain ambitious. This is why, in 2016, when we hit our existing 2017 targets a year early, we immediately set new targets to be reached by 2025. However, in line with best practice, any targets must also reflect the changes in the scale and magnitude of our business activities.

Consequently, during 2018 and following on from our acquisition of Reynolds American Inc. (RAI), we took the opportunity to once again review our long-term targets so that they would reflect our new operations portfolio.

As a result, we undertook a full analysis of our Scope 1, 2 and 3 emissions*, establishing a new baseline and allowing targets to be set that account for all of our operations and external supply chain.

In 2018, we have set new science-based carbon emissions targets for 2030, which are now approved by the Science Based Targets intiative. Alongside new emissions reduction and energy targets, we have set other 2030 environmental targets for water and waste. These aim to further reduce our impact through reduced consumption of resources, improved water stewardship, and ensuring that waste from our operations is reduced, reused or recycled.

It is also worth noting that we have long reported on our environmental performance against our previous intensity targets of per million cigarettes (MCE) produced and our historical performance can be found here. In this section, we outline our new 2030 environmental targets, to reflect our new business footprint and our growing portfolio of potentially reduced-risk products (PRRPs), against the baseline year 2017, and commitment to achieve absolute reductions, in line with best practice.

* Scope 1 represents direct emissions from fuel used by our fleet or sites. Scope 2 reflects indirect emissions from purchased electricity, steam and hot water, and Scope 3 accounts for all other emissions from the supply chain.

Carbon and energy

Goal: Reduce our absolute Scope 1 and Scope 2 carbon dioxide equivalent (CO2e) emissions by 30% by 2030

Scope 1 and 2 CO2e emissions (‘000 tonnes)

-2.7%
from our 2017 baseline
2017 baseline* 2018 2030 target
864 841 605

Goal: Reduce our absolute Scope 3 CO2e emissions by 16% by 2030

Scope 3 CO2e emissions (‘000 tonnes)**

2017 baseline* 2018 2030 target
8,254 6,934

Goal: Increase the amount of renewable energy we source (as a % of total direct energy use) to 30% by 2030

Renewable energy as a % of total direct energy use

9.3%
of our 2018 energy consumption was from renewable sources
2017 baseline* 2018*** 2030 target
9.1% 9.3% 30%

* 2017 data restated to account for our business footprint and most recent acquisitions, such as the RAI in the U.S.

** As we have expanded our Scope 3 reporting to fully align with the Greenhouse Gas (GHG) Protocol, consolidation and verification for 2018 data is ongoing across all 15 categories and will be reported in the 2019 Sustainability Report. 2017 data reported includes biogenic emissions of 3,381,000 tonnes CO2e, in line with the GHG Protocol reporting criteria.

*** In 2018, our total direct energy consumption was 11.067 million Gigajoules (mnGJ), and renewable energy use was 1.024 mnGJ.

We have achieved a 2.7% year-on-year absolute reduction in our carbon emissions across all our operations, with improvements driven by renewable energy and energy efficiency projects, including:

  • investing in technology and switching to low-carbon or renewable energy sources, as we installed on-site solar panels in Bangladesh, Pakistan, Sri Lanka and Honduras, and continued to purchase renewable energy in Croatia, Switzerland, Poland and the UK, alongside ongoing initiatives for other sites, such as our Santa Fe factory in the U.S., which operates on 100% renewable electricity;
  • optimising our logistics and fleet with new standards for fuel efficiency, engine size and emissions; and
  • optimising load capacity and GPS monitoring to improve our commercial fleet efficiency.

We consider our performance this year to be particularly strong, given our direct impact increasing in 2018 following the changes to our business footprint, such as integration of RAI environmental data and expansion of some of our sites and operations.

Water

Goal: Reduce the total amount of water withdrawn by 35% by 2030

Total water withdrawn (million cubic metres)

-8.2%
from our 2017 baseline
2017 baseline* 2018 2030 target
5.195 4.768 3.380

Goal: Increase the amount of water we recycle to 15% by 2030

% of water recycled

8.8%
of total water recycled in 2018
2017 baseline* 2018 2030 target
8.7% 8.8% 15%

* 2017 data restated to account for our business footprint and most recent acquisitions, such as the RAI in the U.S.

Our manufacturing processes are less water intensive than other industries, but we understand that water stress is a reality in many parts of the world where we operate. Following the water risk assessments we conducted for all factories and green-leaf threshing sites in 2017, we continue to implement our plans.

In 2018, we were pleased to achieve an absolute 8% decrease in total amount of water withdrawn, compared to 2017 through initiatives such as:

  • eliminating leakages and improving water use control at sites across the world;
  • increasing the recycling rate of water in many of our markets including Pakistan, South Africa, Turkey and Croatia; and
  • implementing Integrated Work Systems to optimise water use in all of our factories.

Waste

Goal: Reduce the absolute volume of waste generated by 15% by 2030

Waste generated (‘000 tonnes)

-3.2%
from our 2017 baseline
2017 baseline* 2018 2030 target
160 155 136

Goal: Reduce the absolute volume of waste sent to landfill by 40% by 2030

Waste to landfill (‘000 tonnes)

-9.2%
from our 2017 baseline
2017 baseline* 2018 2030 target
16.2 14.7 9.71

Goal: Recycle at least 95% of our total waste generated each year

% of waste recycled

90.2%
of waste recycled in 2018
2017 baseline* 2018 2030 target
89.6% 90.2% 95%

* 2017 data restated to account for our business footprint and most recent acquisitions, such as the RAI in the U.S.

We recycle or reuse waste within our business wherever possible. In 2018, we were pleased to achieve a 9% reduction in the amount of waste sent to landfill, compared to 2017. We also recycled 90.2% of our waste. Some notable initiatives this year include:

  • waste briquetting for recycling in Nigeria;
  • waste reduction activities in production in Kenya, Russia, South Africa and Bangladesh; and
  • reductions in waste generated through marketing and distribution activities across some markets.

Additionally, 25% of our manufacturing sites do not send any waste to landfill, up by 2%**.

** We restate previously reported 2017 figure of 26%, following integration of environmental data from recent acquisitions.

Other updates in 2018

In 2018, there was one reported incidents of environmental non-compliance in South Africa. A BAT subsidiary paid a fine of 250,000 South African Rand for conducting waste management without the required license. At the time of commissioning the facility, our subsidiary was in the process of applying for a license to the Department of Agriculture and Rural Development, but unfortunately this wasn’t completed in time. However, a permit for the waste management activity undertaken is no longer required and so the subsidiary is appealing the fine and engaging with respective authorities to understand the current licensing requirements.

EY LogoThe data on this page has been independently assured by Ernst & Young LLP. Please see the full assurance statement for details of the scope of work and conclusions.
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