Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Supply Chain Integrity

Environmental Achievements

• Reduction in electricity usage in the Philippines by nearly 8%
• Implementation of electric forklifts in Italy, reducing emissions by 83% compared to diesel forklifts
• Establishment of 90+ boreholes in Mozambique to improve water availability
• Dzalanyama tree-planting project in Malawi, planting 18 hectares of trees and preserving 2 hectares
• Composting cooperative in Brazil using BIOLEAF technology to create organic fertilizer
• Coal ash brick making in Malawi reducing waste and creating building supplies
• Implementation of CPA container and plastic waste collection programs in Indonesia and the Philippines

Social Achievements

• Launched employee engagement program in the Philippines improving attendance and collaboration
• Supported an annual football and netball tournament in Malawi for student athletes
• Donated more than $1.9 million to communities where they operate
• Implemented Village Savings & Loan Associations (VSLAs) in Malawi to improve farmer livelihoods
• Provided schooling to children of employees in Zimbabwe since 1964

Governance Achievements

• Global Anti-Corruption Compliance Program with 100% of business partners receiving compliance communications; 100% of high-risk business partners received face-to-face and online compliance training
• Certified as having an effective program that complies with the Foreign Corrupt Practices Act (FCPA) in 2013

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on tobacco production
• Water availability in some regions
• Waste management in regions with limited infrastructure
• Child labor in some supply chain areas

Mitigation Strategies

• Maintaining diversified sources of tobacco
• Implementing water management programs (e.g., boreholes, rainwater collection)
• Promoting recycling and composting programs
• Engaging in child labor prevention programs (e.g., school feeding programs)

Supply Chain Management

Responsible Procurement

• Good Agricultural Practices (GAP)
• Agricultural Labor Practices (ALP)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option

Environmental Metrics

ESG Focus Areas

• Supply Chain Integrity
• Environment
• Social

Environmental Achievements

• Reduced absolute emissions and emissions intensity throughout global operations
• Reduced water withdrawal and water intensity per kilogram of tobacco processed
• Reduced waste produced per kilogram of tobacco processed and percentage of waste going to landfills
• Composted more than 3,200 tons of tobacco waste
• Reduced boiler emissions in Brazil by more than 1,000 tCO2e (20% reduction)

Social Achievements

• No employee or contractor workplace fatalities reported
• Implemented a robot prototype project in Brazil to enhance employee working conditions
• Provided enhanced educational opportunities for field technicians through partnership with Blackfordby College
• Facilitated loan administration for employees in Malawi
• Funded various initiatives supporting local economies and cultures

Governance Achievements

• Independent benchmark assessment of Anti-Corruption Compliance program concluded it was robust and met regulatory expectations
• 100% of high-risk business partners received compliance training

Climate Goals & Targets

Environmental Challenges

• Climate change impacts (changes in rainfall patterns, water shortages, changing storm patterns, temperature levels)
• Increased TRIR in 2020 due to expansion and standardization of global reporting process

Mitigation Strategies

• Committed to setting science-based greenhouse gas emissions reduction targets
• Developing new tobacco cultivars and diversifying roles in agricultural supply chains
• Teaching farmers resilient farming techniques
• Improving health and safety management system and reporting tools for better transparency and accountability

Supply Chain Management

Responsible Procurement

• Good Agricultural Practices (GAP) and Agricultural Labor Practices (ALP) programs; farm oversight, vendor approval, traceability, leaf assessment procedures, and supply chain sanitation and hygiene practices

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns, water shortages, changing storm patterns and intensities, and changing temperature levels

Opportunities

• Pursuit of economies and diversity of supply to address customer needs; development of new tobacco cultivars and diversification of roles in various agricultural supply chains

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB

Environmental Metrics

ESG Focus Areas

• Sustainable Tobacco Production
• Worker Rights and Safety
• Environmental Protection
• Supply Chain Traceability
• Business Integrity

Environmental Achievements

• Reduced GHG emissions by 32.5% from the prior year (largely due to COVID-19 factory shutdown)
• 98% of waste recycled

Social Achievements

• Implemented Agricultural Labor Practices (ALP) program to improve worker conditions on farms
• Conducted worker interviews to assess farm labor conditions
• Provided personal protective equipment (PPE) to farmers and their employees during COVID-19 pandemic
• Made extraordinary contributions to farmers during COVID-19 pandemic
• Donated €24,000 to three hospitals during COVID-19 crisis

Governance Achievements

• Established a Business Integrity and Compliance Program
• Implemented mandatory annual training programs on corporate compliance and ethical behavior
• Active member of several industry associations (APTI, Tobacco Italia, FETRATAB, ELTI)

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and supply chain
• Illicit trade in tobacco
• Maintaining sustainable labor practices across the supply chain
• Reducing environmental impact of tobacco production

Mitigation Strategies

• Suspended activities for six weeks during COVID-19 pandemic
• Provided financial support and PPE to farmers during COVID-19 pandemic
• Implemented ALP program and conducted farm audits to monitor labor practices
• Developed Good Agricultural Practices (GAP) program to reduce environmental impact
• Participated in OIT (Interprofessional Tobacco Organization) to combat illicit trade

Supply Chain Management

Responsible Procurement

• Sustainable and quality tobacco production
• Good agricultural practices training
• Technical support for sustainable tobacco growing
• Contracts defining quantities, qualities, and prices

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Core

Certifications: UNI EN ISO 9001:2015, UNI EN ISO 14001:2015, BS OHSAS 18001:2007 (transitioning to UNI EN ISO 45001)

UN Sustainable Development Goals

• 3 Good Health and Well-being
• 8 Decent Work and Economic Growth
• 12 Responsible Consumption and Production

Initiatives contribute to these goals through sustainable tobacco production, worker protection, and environmental stewardship.

Environmental Metrics

ESG Focus Areas

• Governance
• People
• Environment
• Value Chain

Environmental Achievements

• Installed a photovoltaic system at the Bastia Umbra plant (to start in 2023)
• Updated materiality analysis in line with new GRI Standards
• Added waste generation and water consumption KPIs to environmental reporting
• Reduced total GHG emissions (Scope 1 and 2) by approximately 18% due to lower processed volume compared to FY2021.
• 98.8% of waste was destined for recycling or reuse.

Social Achievements

• Strengthened support for farmers by improving contractual conditions and providing economic subsidies
• Implemented the “DELTAFINA finanzia i tuoi progetti” initiative, providing interest-free loans to employees.
• Offered 254 courses on Business Integrity and Compliance.
• Conducted 74 interviews with farm workers to ensure ALP compliance.

Governance Achievements

• Updated materiality analysis to reflect the new GRI Standard published in 2022.
• Implemented a compliance program aligned with Universal Corporation's Global Compliance Program, including a Code of Conduct and Anti-Corruption Compliance Manual.
• Established a Health and Safety Committee.

Climate Goals & Targets

Environmental Challenges

• Energy and raw material price increases
• Supply chain discontinuity
• Decreased production capacity of tobacco growers due to drought and geopolitical tensions in Ukraine

Mitigation Strategies

• Strengthened support of farmers through improved contractual conditions and economic subsidies
• Implemented projects to improve water and energy efficiency.

Supply Chain Management

Supplier Audits: 113 unannounced farm visits in FY2022

Responsible Procurement

• Sustainable Tobacco Programme (STP)
• Agricultural Labor Practices (ALP)
• Good Agricultural Practices (GAP)

Climate-Related Risks & Opportunities

Physical Risks

• Drought

Transition Risks

• Energy price increases

Opportunities

• Renewable energy investments

Reporting Standards

Frameworks Used: GRI

Certifications: UNI EN ISO 9001:2015, UNI EN ISO 14001:2015, UNI EN ISO 45001:2018

UN Sustainable Development Goals

• SDG 3
• SDG 6
• SDG 8
• SDG 10
• SDG 12
• SDG 13
• SDG 15
• SDG 16

The report links various initiatives to these SDGs.

Awards & Recognition

• Best Eco-partner AWARD 2021 by AMA S.p.A.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water
• Waste
• Forestry
• Child Labor
• Forced Labor
• Safe Work Environment
• Fair and Equal Treatment
• Freedom of Association
• Compliance with & Protection of the Law
• Supply Chain Integrity

Environmental Achievements

• Reduced absolute emissions throughout global operations due to increased renewable energy use.
• Increased water reuse in several operations with infrastructure upgrades.
• Decreased total amount of waste generated globally.
• Limited hazardous waste to 1% of all operational waste.
• Achieved 79% traceability in timber supply chain.
• Contracted farmers did not convert natural forest to a different land use type in FY 2023.
• Planted 16,841,467 trees during CY23.

Social Achievements

• Improved workplace safety with a 35% reduction in lost working days.
• Increased workplace inspections (15,000 in FY2023 vs 8,400 in FY2022), resulting in 2,500 action plans implemented.
• Implemented a mentorship program in Africa with 48 mentors and 68 mentees.
• Supported childcare centers in Mexico serving over 1,200 children.

Governance Achievements

• 100% completion rate for business ethics questionnaire.
• 100% completion rate for face-to-face and online compliance training.
• Robust anti-corruption compliance program, independently benchmarked by a leading global law firm.

Climate Goals & Targets

Environmental Challenges

• Changing weather patterns due to climate change
• Increasing climate change regulation
• Pressure on water infrastructure for availability and quality
• Increased pressures associated with responsible disposal
• Deforestation impact from curing fuel procurement
• Loss of biodiversity

Mitigation Strategies

• Developing drought-tolerant tobacco and other crop varieties
• Incentives and decreased costs associated with purchasing renewable energy
• Enhancing operational infrastructure to be more resilient by recycling water and capturing rainwater
• Reusing and recycling materials to reduce operational and disposal costs
• Controlling cost and distribution of wood supply
• Promoting the use of sustainably sourced wood
• Implementing managed agroforestry projects and biomass operations to reduce curing emissions
• Working with farmers to replace/upgrade curing infrastructure to increase efficiency

Supply Chain Management

Supplier Audits: All contracted farmers monitored and audited against Good Agricultural Practices and Agricultural Labor Practices programs

Responsible Procurement

• Good Agricultural Practices
• Agricultural Labor Practices
• Supply chain due diligence
• Traceability systems

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns
• Water shortages
• Changing storm patterns and intensities
• Changing temperature levels

Transition Risks

• Increasing climate change regulation

Opportunities

• Developing tobacco cultivars and diversifying agricultural supply chains
• Resilient farming techniques
• Economies of scale and diversity of supply

Reporting Standards

Frameworks Used: GRI Standards, SASB Agriculture Products Standard

Certifications: ISO (14 processing operations with ISO)