Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable Agricultural Practices
• Agricultural Labor Practices (ALP)
• Environmental Stewardship
• Community Development
• Supply Chain Traceability
• Climate Change Mitigation

Environmental Achievements

• 32% global reduction in processing fuel from 2010 levels
• Achieved Lost Time Injury (LTI) rate below 1 in 200,000 employee hours
• 100% of wood used for curing tobacco from sustainable sources (except Zimbabwe and Tanzania)
• Reduced total global factory water consumption every year since 2014
• 100% of FCV tobacco from Lombok, Indonesia cured from sustainable sources (using palm oil kernel shells)
• Nearly 1,500 barns converted to POKS curing barns, saving over 909,000 trees

Social Achievements

• 100% of contracted growers trained and monitored for ALP program
• 52% decrease in safe working environment incidences and 29% reduction in child labor incidents in Turkey (during the first full year of ALP implementation)
• 69% reduction in child labor incidents in Indonesia in areas with after-school program
• 92% of contracted growers' children in Indonesia (ages 6-14) attend school (compared to 80% nationally)
• Implementation of ALP committees in Malawi to increase awareness of ALP principles
• Over 200 volunteers across 10 growing areas in Malawi
• Improved profitability for contracted growers in Turkey by reducing labor days and sharing new techniques
• Improved quality of life for contracted growers in Malawi (example provided in report)

Governance Achievements

• Implementation of Ecometrica, a sustainability management software provider
• Independent third-party evaluations of ALP programs in Brazil, Indonesia, and Malawi
• Reporting of GHG emission estimates publicly through CDP since 2009 and water reporting since 2014
• Policies and procedures to ensure ethical business governance
• Code of Business Conduct with non-retaliation policy for reporting violations

Climate Goals & Targets

Environmental Challenges

• Operational risks
• Changes in consumer demand
• Legislation
• Climate change
• Water scarcity in certain regions
• Deforestation due to wood use for curing tobacco
• Child labor in some regions

Mitigation Strategies

• Transformation plan ('One Tomorrow') to drive future growth and reshape brand
• Development of new business lines (e-liquids, industrial hemp, legal Canadian cannabis)
• Working with agronomy and leaf teams to provide viable markets for non-tobacco crops
• Building value-added processes locally to diversify farmers' income
• Six core sustainability commitments
• ALP program to address labor issues
• Transitioning contracted growers away from unsustainable curing fuel sources
• Investing in boiler efficiency, converting from coal to natural gas, installing efficient lighting and motors
• Rainwater harvesting and water stewardship strategy
• Three-pronged approach to address deforestation (improve barn efficiency, transition to alternative fuels, reforestation)
• Use of palm oil kernel shells (POKS) as alternative fuel in Indonesia
• After-school programs to address child labor in Indonesia

Supply Chain Management

Responsible Procurement

• Direct contracts with growers (Integrated Production System)
• ALP program
• Good Agricultural Practices (GAP)

Climate-Related Risks & Opportunities

Physical Risks

• Changes in precipitation patterns impacting water availability

Reporting Standards

Frameworks Used: CDP

Third-party Assurance: SGS (GHG data assurance and reforestation audits); Clarity Associates (reforestation program management audits); Control Union (ALP program management and results audit); ABSustain (Sustainability in Tobacco Production (STP))