Climate Change Data

Environmental Metrics

ESG Focus Areas

• Harm reduction
• Marketplace
• Environment
• Supply chain
• People and culture

Environmental Achievements

• Reduced absolute energy consumption by 1.5% in 2010
• Reduced Group CO2e by 1.2% in 2010
• Reduced Group water use by 5.9% in 2010, exceeding the 2012 target
• Reduced Group waste to landfill by 5.3% in 2010

Social Achievements

• 90% of employees responded to the biennial opinion survey, with scores in all 11 categories more positive than the FMCG benchmark
• Improved Lost Workday Case Incident Rate (LWCIR) to 0.27 in 2010 (excluding Indonesia, 0.38)
• Global CSI expenditure of £15.4 million in 2010

Governance Achievements

• Completed biodiversity risk and opportunity assessments in all leaf-growing operations
• Developed a more integrated supply chain strategy
• Achieved a higher score than the sector average in 17 out of 18 categories in the Dow Jones Sustainability Indexes

Climate Goals & Targets

Environmental Challenges

• Difficult trading conditions affected by the global economic climate and consumer spending
• Growth in illicit trade in a number of markets (e.g., Romania)
• Sudden increases in excise leading to a sharp rise in illicit trade
• Supply chain disruptions due to natural disasters (earthquake in Chile, floods in Pakistan and Mexico), and port strikes in Nigeria

Mitigation Strategies

• Significant productivity savings (£327 million in 2010) achieved two years ahead of schedule
• Refining manufacturing footprint and developing new global systems to reduce costs
• Global AIT strategy development and cooperation with law enforcement agencies to tackle illicit trade
• Globally integrated sourcing strategy and contingency sourcing arrangements to maintain supply despite challenges

Supply Chain Management

Responsible Procurement

• Promoting high ethical, environmental, and workplace standards with suppliers
• Engagement with suppliers to address social, environmental, and economic impacts

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Loss of major leaf-growing areas

Transition Risks

• Changes in regulatory regimes

Opportunities

• Development of drought-resistant tobacco types

Sustainable Products & Innovation

• Potentially reduced-harm products

Awards & Recognition

• Inclusion in the Dow Jones Sustainability World Index (9th year running)
• Platinum status in the UK’s Business in the Community Corporate Responsibility Index

Environmental Metrics

ESG Focus Areas

• Harm reduction
• Marketplace
• Supply chain
• Environment
• People and culture

Environmental Achievements

• Reduced Group CO2e by 41% lower than 2000 baseline
• Reduced Group energy use by 13% lower than 2007 baseline
• Reduced Group water use by 22% lower than 2007 baseline
• Reduced waste to landfill by 52% lower than 2007 baseline
• Recycled more than 92.5% of waste generated

Social Achievements

• Employee engagement index score of 72% (2011: 68%)
• Reduced lost workday cases across the Group by 20%
• Global CSI expenditure of £11.6 million (2011: £13.7 million)
• Local staff account for an average of 62% of employees on top teams around the world (2011: 57%)
• Number of women in management roles remained steady at 32%

Governance Achievements

• Selected for the Dow Jones Sustainability Indexes for the 11th successive year
• Ranked in the top quartile of companies in a study on “Transparency in Corporate Reporting” carried out by Transparency International
• Revised Group Statement of Delegated Authorities approved by the Board

Climate Goals & Targets

Environmental Challenges

• Illicit trade in counterfeit and smuggled tobacco products (estimated at 12% of global consumption)
• Increasing excise rates encouraging consumers to switch to illegal products
• Adverse exchange rate movements impacting reported results
• Tough market conditions in Southern Europe
• Risk of injury, illness, or death in the workplace

Mitigation Strategies

• Dedicated Anti-Illicit Trade (AIT) teams
• Engagement with external stakeholders
• Cross-industry cooperation on AIT issues
• Global AIT strategy development
• Pricing and excise committees
• Engagement with local tax and customs authorities
• Globally integrated sourcing strategy and contingency sourcing arrangements
• Security risk modelling
• Insurance cover and business continuity planning
• Refreshed EHS strategy and training programs
• Analysis of incidents to identify high-potential risks

Supply Chain Management

Responsible Procurement

• Agronomy support to over 100,000 directly contracted farmers
• Social Responsibility in Tobacco Production programme

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, AA1000 Assurance Standard

Third-party Assurance: Ernst & Young LLP

Sustainable Products & Innovation

• Nicotine inhalation product
• Electronic cigarette technologies

Awards & Recognition

• Dow Jones Sustainability World and Europe Indexes (11th year)
• Ranked 5th overall out of 127 European companies for addressing biodiversity impacts by Vigeo
• Carbon Disclosure Project’s Carbon Disclosure Leadership Index
• Transparency International’s “Transparency in Corporate Reporting” study (top quartile)

Environmental Metrics

ESG Focus Areas

• Harm reduction
• Sustainable agriculture and farmer livelihoods
• Corporate behaviour

Environmental Achievements

• 45% reduction in CO2e emissions from 2000 baseline
• 24% reduction in water use from 2007 baseline
• 68% reduction of waste sent to landfill from 2007 baseline
• 92.6% of waste recycled

Social Achievements

• Over 100,000 contracted farmers worldwide supported
• More than £65 million invested each year in supporting farmers
• Over 2 million retailers reached by youth smoking prevention activities
• More than £60 million invested in community projects over the last five years
• 19% reduction in total accidents in 2014

Governance Achievements

• Published new Human Rights Policy
• Three cases of non-adherence to International Marketing Principles identified and addressed (down from 8 in 2013)
• Published Principles for Engagement providing guidance for external engagement with regulators

Climate Goals & Targets

Environmental Challenges

• Concerns about the health risks of e-cigarettes from some public health organizations
• Allegations of child labor in tobacco growing in Malawi and the US
• Challenges facing agriculture (rural poverty, food security, land and resource demand, water access, child labor, urban migration, ageing farmer populations)
• Tobacco trafficking
• Increase in fatalities (8 in 2014) due to road traffic accidents and armed attacks

Mitigation Strategies

• Conducting own research on e-cigarettes and sharing findings
• Engaging with government and international agencies to address child labor allegations
• Working with farmers to mitigate environmental and social impacts of tobacco farming (afforestation, alternative fuels, etc.)
• Investing over £50 million each year in fighting tobacco trafficking, implementing supply chain security systems, and working with law enforcement
• Launching a new program for trade and distribution teams to improve security and driver safety

Supply Chain Management

Supplier Audits: 12 on-site reviews in eight countries in 2014 through AB Sustain

Responsible Procurement

• Social Responsibility in Tobacco Production (SRTP) program
• Supplier code of conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4

Certifications: Null

Third-party Assurance: Ernst & Young LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Vype e-cigarette
• Voke nicotine inhaler
• Tobacco heating products

Awards & Recognition

• Inclusion in the Dow Jones Sustainability Index for 13 years, 12 as industry leader

Environmental Metrics

ESG Focus Areas

• Harm reduction
• Sustainable agriculture and farmer livelihoods
• Corporate behaviour

Environmental Achievements

• Achieved a reduction of waste sent to landfill from our 2007 baseline
• Achieved a reduction in CO2e emissions from our 2000 baseline
• Achieved a reduction in energy use from our 2007 baseline
• Achieved a reduction in water use from our 2007 baseline
• Recycled at least 85% of waste

Social Achievements

• Met the goal of at least 70% of spending on community investment activities in tobacco growing countries focused on sustainable agriculture (except for seven countries with valid reasons)
• Nearly met the target of less than 1% use of natural forest for contracted farmers’ curing fuels (1.8% achieved)
• Implemented initiatives in Brazil to show that farming can be a desirable and profitable way of life, resulting in a steady average age of contracted farmers and a growing number of 18–30-year-olds
• Conducted youth smoking prevention activities in all markets where possible
• Developed a new Supplier Code of Conduct aligned to the UN Guiding Principles

Governance Achievements

• Developed and published Vapour Products Marketing Principles aligned to UK Committees of Advertising Practice Codes
• Strengthened management of human rights through the development of a new Supplier Code of Conduct
• Investigated and took action on two incidents of non-compliance with International Marketing Principles

Climate Goals & Targets

Environmental Challenges

• Lack of direct control over leaf supply chain (farmers, farms)
• Major issues in agriculture (rural poverty, child labour, ageing farmer populations)
• Different challenges in various countries (illegal tobacco, poor human rights, no minimum age for tobacco sales)
• Conflicting messages about consumer safety and long-term health risks of Next Generation Products
• Overly restrictive regulation on Next Generation Products
• Allegations of child labour on tobacco farms in the US
• Allegations of bribery and corruption in East Africa business

Mitigation Strategies

• Embedding good practices in leaf supply chain (sustainable wood sourcing, biodiversity conservation, high labour standards)
• Collaboration with industry initiatives and local partnerships
• Upholding highest standards through Group policies and procedures
• Investigating and taking action on non-compliance incidents
• Developing and implementing own approach to product standards and marketing in the absence of consistent regulation
• Conducting independent on-site review of US suppliers
• Working with US suppliers to address issues
• Working with external legal firm to investigate bribery allegations

Supply Chain Management

Supplier Audits: 15 on-site reviews conducted in 11 countries in 2015; annual self-assessments completed by first-tier suppliers

Responsible Procurement

• Social Responsibility in Tobacco Production (SRTP) programme; new Sustainable Tobacco Programme (to replace SRTP)
• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4

Third-party Assurance: Ernst & Young LLP

Sustainable Products & Innovation

• Next Generation Products (Vype, glo iFuse, Voke)

Environmental Metrics

ESG Focus Areas

• Harm Reduction
• Sustainable Agriculture and Farmer Livelihoods
• Corporate Behaviour
• Environmental impact of operations
• People and culture

Environmental Achievements

• 46% reduction in CO2e emissions from 2000 baseline
• 33% reduction in direct Group water use from 2007 baseline
• 68% reduction in waste sent to landfill from 2007 baseline
• 8% reduction in waste sent to landfill per million cigarettes equivalent compared to 2016
• 93.2% of waste recycled in 2017
• 17% reduction in water usage at Casablanca factory in the first year of water recirculation

Social Achievements

• Launched Sustainable Farm program in Brazil providing business training
• Launched Farmer Loyalty program in Pakistan providing training on good agricultural practices
• 67,000+ farmers and rural community members benefited from training on human rights and child labor issues
• Women in Leadership program supported 145 delegates
• 83% score in the Engagement Index (employee satisfaction), 12 percentage points higher than the FMCG comparator norm

Governance Achievements

• Introduced Delivery with Integrity global compliance program
• Updated SoBC to reflect requirements of the US Foreign Corrupt Practices Act
• Launched a new third-party-managed Speak Up system
• Developed a new operational standard on child labour prevention

Climate Goals & Targets

Environmental Challenges

• Increased accidents to employees and contractors (217 in 2017)
• Increased fatalities (12 employee/contractor deaths and 11 public deaths)
• Increased violent attacks on TM&D representatives
• Water scarcity in some regions
• Regulatory obstacles to launching NGPs in some markets
• Illegal tobacco trade
• Ageing farmer populations
• Deforestation
• Soil degradation and water scarcity

Mitigation Strategies

• Reviewed telematics data and refreshed driver training programs
• Revised security approach to reduce visibility of escorts and reduce stock carried by reps
• Implemented water recirculation systems
• Expanded water risk assessments to all factories and green-leaf threshing sites
• Developed new varieties of tobacco seeds with greater yields and disease resistance
• Introduced drip irrigation in Mexico
• Transitioned to sustainable wood fuel sources (99% in 2017)
• Developed a new digital farm monitoring system
• Engaging with stakeholders to create appropriate regulatory and market conditions for NGPs
• Working in multi-stakeholder partnerships to address challenges

Supply Chain Management

Supplier Audits: 65 direct suppliers audited in 2017 (20% of total direct Procurement spend)

Responsible Procurement

• Supplier Code of Conduct, Sustainable Tobacco Programme (STP)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, water scarcity

Reporting Standards

Frameworks Used: GRI G4

Certifications: ISO 14001

Third-party Assurance: Ernst & Young LLP (limited assurance)

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 8 (Decent Work and Economic Growth)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)

Harm reduction initiatives align with SDG 3; sustainable agriculture and farmer livelihood initiatives align with SDG 8, 12, and 13; corporate behavior initiatives align with SDG 8 and 12

Sustainable Products & Innovation

• Next Generation Products (NGPs), including vapour products and tobacco heating products

Awards & Recognition

• Tobacco industry leader in the 2017 Dow Jones Sustainability Indices, Global Top Employer accreditation, PETA International Science Consortium Ltd recognition

Environmental Metrics

ESG Focus Areas

• Harm reduction
• Climate change
• Water and waste
• Sustainable agriculture
• Circular economy
• Human rights
• Farmer livelihoods
• Health and safety
• People and culture
• Business ethics
• Responsible marketing
• Regulation and policy engagement
• Board diversity
• Executive remuneration
• Tax transparency
• Stakeholder engagement

Environmental Achievements

• 7% year-on-year reduction in Scope 1 and 2 carbon emissions
• 10.8% of total direct energy use from renewable sources
• 5% reduction in total water withdrawn across the Group
• 13.7% of total water recycled
• 90.5% recycling rate across the Group
• 99% of wood used by contracted farmers for curing fuels from sustainable sources

Social Achievements

• 37% growth in New Categories business to £1.3 billion
• 11 million consumers regularly using a non-combustible product
• Over 5,000 human rights training sessions with more than 350,000 attendances
• Resolution of a 2016 human rights complaint in the US
• Reduction in total accidents to 194 from 236 in 2018
• Increased female representation in senior management from 11% to 23% since 2012

Governance Achievements

• 100% of employees completed annual SoBC training and sign-off
• 100% of markets reported adherence to YAP Guidelines
• Three women representing 27% of the Main Board

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on natural resources and supply chain
• Water scarcity in some operating locations
• Limited recycling and waste management facilities in some locations
• Human rights risks in tobacco leaf supply chain
• Illicit cigarette trade
• Maintaining a stable income in agriculture

Mitigation Strategies

• Accelerated science-based targets for reducing CO2e emissions
• Water-saving initiatives and increased water recycling
• Waste reduction and recycling programs
• Human rights risk assessments and supplier audits
• Collaboration with authorities to combat illicit trade
• Thrive program to enhance farmer livelihoods

Supply Chain Management

Supplier Audits: 94 audits in 2019

Responsible Procurement

• Supplier Code of Conduct
• Independent on-site audits
• Human rights risk assessments

Climate-Related Risks & Opportunities

Physical Risks

• Changes in temperature, rain, water balance, and climatic risks impacting tobacco growing conditions

Transition Risks

• Adverse domestic or international legislation and regulation
• Changes in domestic or international tax laws

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, SASB framework, World Economic Forum’s ESG framework

Certifications: ISO 14001

Third-party Assurance: Corporate Citizenship

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Vype and Vuse vapor products
• glo tobacco heating products
• Velo modern oral products

Awards & Recognition

• CDP’s ‘A List’ for climate change
• CDP’s Supplier Engagement Leaderboard
• Global Top Employer
• Financial Times Diversity Leaders report

Environmental Metrics

ESG Focus Areas

• Reducing the Health Impact of Our Business
• Environmental Management
• Social Impact
• Corporate Governance

Environmental Achievements

• 30.9% reduction in Scope 1 and 2 emissions, contributing to a total 37.4% reduction against 2017 baseline
• 10.8% reduction in water withdrawn, contributing to a total 22.5% reduction against 2017 baseline
• Over 99% wood used for tobacco curing by our contracted farmers is from sustainable sources
• 82% of our plastic packaging is reusable, recyclable or compostable

Social Achievements

• 13.5 million consumers of non-combustible products, up by 3 million (vs 2019)
• 99.7% of tobacco farms monitored for child labour
• 93 supplier labour audits conducted on product materials and high-risk indirect service suppliers
• Over 50% of tobacco hectares grown by our contracted farmers is from our hybrid tobacco seed varieties, boosting yields by up to 20%
• 27% reduction in total accidents (vs 2019)
• 38% female representation in management roles
• 100% of Group employees completed SoBC sign-off and training

Governance Achievements

• 100% adherence to our Standards of Business Conduct (SoBC), including our Lobbying and Engagement Policy
• Further strengthened compliance procedures and internal controls for IMP
• 100% markets reported alignment with YAP Guidelines

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic caused upheaval on a global scale impacting operations and stakeholders.

Mitigation Strategies

• Swift action across the business to ensure safe and effective operation
• Over £10.3 million in cash and in-kind donations to COVID-related relief funds and efforts
• Supporting stakeholders through the pandemic.

Supply Chain Management

Supplier Audits: 93

Responsible Procurement

• Independent labour audits
• Monitoring for child and forced labour
• Training programs for farmers

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity risks

Transition Risks

• Adverse domestic or international legislation and regulation
• Changes or differences in domestic or international economic or political conditions

Opportunities

• Sourcing renewable energy
• Reducing carbon impact across value chain

Reporting Standards

Frameworks Used: GRI Standards, SASB framework, World Economic Forum’s ESG framework, UN Guiding Principles Reporting Framework (UNGPRF)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Our Sustainability Agenda reflects how we are contributing to the UN Sustainable Development Goals (SDGs).

Sustainable Products & Innovation

• Vapour Products
• Tobacco Heating Products
• Modern Oral Products

Awards & Recognition

• Dow Jones Sustainability Indices (DJSI) World Index
• CDP Climate A List
• CDP Water A-
• Supplier Engagement Leader
• Global Top Employer

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Waste Management
• Water Stewardship
• Human Rights
• Responsible Sourcing
• Responsible Marketing

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI, GHG Protocol

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Biodiversity & Afforestation
• Waste Management
• Human Rights
• Farmer Livelihoods
• People & Culture
• Business Ethics
• Responsible Marketing

Environmental Achievements

• 8% reduction in Scope 1 and 2 carbon emissions against 2017 baseline
• 18% water recycle ratio achieved across sites
• All manufacturing and processing sites achieved zero waste to landfill and are operating at 99% waste recycling ratio
• 100% wood used for tobacco curing by contracted farmers is from sustainable sources

Social Achievements

• 15,988 attendees at 640 farmers training sessions on human rights and zero child labour
• 82% of tobacco farmers in the supply chain grew other crops as additional sources of income
• 21% female representation in management roles
• 67% reduction in total accidents (vs 2020)
• 2,591 solar home systems installed in the Chattogram Hill Tracts for marginalized communities

Governance Achievements

• 100% Group employees completed annual SoBC sign-off
• 100% adherence to International Marketing Principles (IMPs) reported

Climate Goals & Targets

Environmental Challenges

• Water scarcity risks may increase with the changing climate
• Maintaining a stable income in agriculture can be challenging in the face of an unpredictable climate and changing market forces
• Rural poverty is a primary root cause for issues such as child and forced labour
• Health and safety risks can have serious impacts on employees, contractors and farmers

Mitigation Strategies

• Driving water efficiencies across the value chain
• Helping farmers to build long-term resilience through sustainable farming practices and technologies
• Company-wide health and safety programmes and employee training
• Risk assessments, safe work procedures and protective equipment

Supply Chain Management

Supplier Audits: Eight supplier third-party audits conducted on product materials and high-risk indirect service suppliers

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-Being)
• SDG 8 (Decent Work and Economic Growth)
• SDG 10 (Reduced Inequalities)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 15 (Life on Land)
• SDG 16 (Peace, Justice and Strong Institutions)

BAT Bangladesh has mapped its Sustainability Agenda to these SDGs

Awards & Recognition

• Prime Minister’s National Award (five times)
• Chief Advisor’s Award
• Bangladesh Innovation Award 2021
• Top Green Company in Asia award at the Asia Corporate Excellence and Sustainability (ACES) Awards 2021
• Asia Responsible Entrepreneurship Award (2014)
• Global Equality Standard seal
• Most Female-Friendly Organization Award
• Top Employer Award (three years running)
• ICAB NATIONAL AWARD
• SAFA AWARD

Environmental Metrics

ESG Focus Areas

• Sustainability
• Tobacco Harm Reduction
• Diversity & Inclusion

Environmental Achievements

• 18 certified carbon neutral manufacturing and commercial facilities (with two added in H1 2022)
• Ranked among the top 3% of companies across Europe for reduction in core (Scope 1 & 2) greenhouse gas emissions intensity

Social Achievements

• Achieved first milestones towards 2025 Diversity & Inclusion ambitions, improving female representation in management and senior teams
• Vuse won the gold award at the Transform Awards Europe 2022 for ‘Best Use of Sustainable Packaging’

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Increasing macroeconomic pressures, exacerbated by the conflict in Ukraine
• Competition from illicit trade
• Tobacco, New Categories and other regulation
• Supply chain disruptions

Mitigation Strategies

• Robust pricing
• Operational agility
• Strong cash generation
• Transferring manufacturing from Russia to other Group facilities
• Continued investment in New Categories

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: KPMG LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Vuse Go (disposable vapour platform)
• glo hyper X2 (new THP innovation platform)

Awards & Recognition

• S&P Global’s Sustainability Yearbook 2022: highest “Gold Class” distinction
• WDI Workforce Transparency Awards: special mentions
• Global Top Employer 2022
• ISS Environment Disclosures Quality Score: highest rating
• Financial Times Europe Climate Leader Ranking 2022
• Vuse won the gold award at the Transform Awards Europe 2022 for ‘Best Use of Sustainable Packaging’

Environmental Metrics

ESG Focus Areas

• Harm Reduction
• Climate Change
• Circular Economy
• Biodiversity and Ecosystems
• Water
• Employees, Diversity and Culture
• Human Rights
• Farmer Livelihoods and Communities
• Marketing and Communications
• Ethics and Integrity
• Supplier Engagement

Environmental Achievements

• 33.1% reduction in Scope 1 and 2 GHG emissions in 2023 vs 2020 baseline
• 12.48% reduction in Scope 3 GHG emissions in 2022 vs 2020 baseline
• 28.2% reduction in waste generated in own operations vs 2017 baseline (surpassing 25% target)
• 39.2% reduction in water withdrawn vs 2017 baseline (surpassing 35% target)

Social Achievements

• 93.3% of farmers in Thrive Supply Chain also growing other crops in 2023
• 418,584 farmers and community members engaged in human rights training

Governance Achievements

• Updated SoBC Assurance Procedure
• New ambition for 40% ethnically diverse Management Board by 2027

Climate Goals & Targets

Environmental Challenges

• Continued macro-economic headwinds impacting consumer affordability in the U.S.
• Growth of illicit single-use vapor products in the U.S.
• Potential menthol ban in the U.S.
• Data availability and accuracy challenges in Scope 3 emissions reporting
• Cost and complexity of implementing carbon-smart farming techniques
• Global shortages in key materials (e.g., food-grade post-consumer resin)

Mitigation Strategies

• Investing in R&D and engaging with regulators to raise awareness of New Category products
• Strengthening portfolio management, route-to-market, and revenue growth management in the U.S.
• Challenging FDA Marketing Denial Orders for Vuse Alto products
• Working with external partners to find efficient solutions for renewable energy and technology
• Collaborating with CDP to improve access to supplier data
• Developing carbon-smart farming techniques suitable for different contexts
• Exploring alternative solutions and piloting new ideas for recycled content

Supply Chain Management

Supplier Audits: 36.6% of product material and higher-risk indirect service suppliers had an independent labour audit within a three-year cycle (2023)

Responsible Procurement

• Supplier Code of Conduct
• Leaf Supplier Manual
• Thrive sustainable agriculture and farmer livelihoods programme

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SASB, SFDR PAI, TCFD, TNFD

Third-party Assurance: KPMG

Sustainable Products & Innovation

• Vuse Go single-use vapor product
• glo Hyper Air heated product
• Velo Modern Oral products
• veo tobacco-free herbal heated product

Awards & Recognition

• MSCI A Rating (2023)
• Financial Times Climate Leader (2023)
• Global Top Employer (2023)