Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental management
• Social impact
• Corporate Governance

Environmental Achievements

• Carbon neutrality achieved in Scopes 1 & 2 GHG emissions across Depots, GLTP, Colombo Factory and Commercial operations in 2021
• 2.8 MW installation of Solar System project
• 10.3% water recycled and reused
• Colombo factory achieving zero waste to landfills
• Tobacco waste declined by almost 17%

Social Achievements

• 8% increase in proportion of women in Management roles
• Zero serious injuries lost days
• Rs. 228 Million invested in CSI initiatives impacting over 87,000 beneficiaries
• 'Top Employer’ Certification for 2nd consecutive year
• 17,501 hours of training for employees
• 2,161 Traders covered via ‘Abhisheka’ Insurance Scheme

Governance Achievements

• Revamped and rolled out Standards of Business Conduct (SoBC) across BAT markets including Sri Lanka
• Project SimpliCT rolled out to reduce complexity and enable efficiencies
• 100% completion of SoBC training and policy sign-off across the organisation

Climate Goals & Targets

Environmental Challenges

• Sri Lankan economic crisis impacting consumer demand and manufacturing costs
• Growth in illicit trade and beedi market eroding market share and impacting government tax revenue
• Successive tax increases impacting consumer affordability and demand
• Erratic weather patterns impacting agricultural crops
• Difficulties in recruiting and retaining talent

Mitigation Strategies

• Broadening banking portfolio to diversify FX sources and leveraging parent Group support
• Efficient route planning and proactive contingency planning to ensure product distribution
• Investing in energy efficient technology and process improvements to reduce costs
• Shifting to local suppliers for imported raw materials
• Enhancing Employee Value Proposition to attract and retain talent
• Supporting authorities in tackling illicit trade and engaging in policy dialogue

Supply Chain Management

Supplier Audits: 100% of tier one tobacco leaf suppliers

Responsible Procurement

• Sustainable Tobacco Programme (STP)
• Farmer Sustainability Management (FSM) App
• Thrive sustainable agriculture and farmer livelihoods programme

Climate-Related Risks & Opportunities

Physical Risks

• Erratic weather patterns

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Sri Lanka Financial Reporting Standards, Companies Act No. 7 of 2007, Listing Rules of the Colombo Stock Exchange, Global Reporting Initiative (GRI) Standards, United Nations Sustainable Development Goals (SDG), Sustainability Guide on ESG Reporting issued by the CSE, Code of Best Practice on Corporate Governance issued by CA Sri Lanka (2017)

Third-party Assurance: BAT Group level assurance for Greenhouse Gas Emission; Totum Institute for Greenhouse Gas Compensation Process; KPMG for financial statements

Awards & Recognition

• 'Top Employer Certification'

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Social Impact
• Corporate Governance

Environmental Achievements

• Achieved 18.43% reduction on Scopes 1 and 2 emissions (market-based) (vs 2022)
• 49.82% dependence on renewable energy
• 35% reduction in waste to landfill (vs 2022)
• 16.24% increase in water recycled (vs 2022)
• Over 130 acres of degraded land re-planted
• AWS certification for GL TP completed

Social Achievements

• Rs. 1.53 Bn payments to contracted tobacco farmers
• 9,389 projects to positively impact over 69,900 beneficiaries
• Recognised as a ‘Women-Friendly Organisation’ by Satyn AICPA & CIMA
• ‘Top Employer’ certification for the third consecutive year

Governance Achievements

• Robust governance and control environment built on world-class standards
• 100% SoBC compliance
• Zero incidents of non-compliance with marketing regulations

Climate Goals & Targets

Environmental Challenges

• Sluggish demand conditions
• Unprecedented increase in excise taxes
• Escalating threat of illicit cigarettes
• Rising levels of labour migration
• Extreme weather conditions impacting tobacco supply chain
• Increased cost of agricultural inputs
• Growth in illicit and undertaxed beedi markets

Mitigation Strategies

• Cost optimisation initiatives (project SimpliCT and IWS)
• Adult consumer-centric brand strategy
• Portfolio interventions offering value at affordable price points
• Operational efficiencies through productivity enhancement interventions
• Investments in energy-efficient technology
• Reduced dependence on fossil fuels
• Engagement with contracted tobacco farmers to support Carbon Smart practices
• Improved waste management
• Increased water recycling capacity
• Technical and financial support to farmers
• Trade loyalty programme ‘Abhisheka’
• Community development projects
• Strengthening employer brand to attract and retain talent
• Culture transformation programme
• Investments in safer spaces

Supply Chain Management

Supplier Audits: 3

Responsible Procurement

• Sustainable Tobacco Programme (STP)
• Supplier Code of Conduct (SCC)
• Know-Your-Consumer (KYC) and Know-Your-Supplier (KYS) procedures

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Sri Lanka Financial Reporting Standards, GRI Standards, UN Sustainable Development Goals, CSE Sustainability Guide on ESG Reporting, CA Sri Lanka Code of Best Practice on Corporate Governance

Certifications: Top Employer (3 consecutive years), Alliance for Water Stewardship (AWS) for GL TP

Third-party Assurance: KPMG (financial statements); BAT Group level assurance (Greenhouse Gas Emission); Totum Institute (Verification of Compliance of the Greenhouse Gas Compensation Process)

Sustainable Products & Innovation

• Dunhill Switch LEPP
• John Player Gold Pro
• John Player Gold Pro Cool LEPP

Awards & Recognition

• Satyn AICPA & CIMA Women Friendly Workplace Awards 2023