Climate Change Data

Environmental Metrics

ESG Focus Areas

• Appropriate manufacturing process and consumer services
• Supply chain management
• Strengthening of the business foundation
• Approaches to protecting the global environment
• Social contribution activities

Environmental Achievements

• Reduced greenhouse gas emissions by 19,200 tons from FY 2010 levels (or by 54.6% from FY 1995 levels) in FY 2011.
• Reduced water usage by 195,900 m³ year on year (or 74.5% from FY 1995 levels) in FY 2011.
• Reduced waste generation by 1,550 tons year on year (or 24.6% from FY 1995 levels) in FY 2011.
• 23 factories achieved zero emission with a recycling rate of over 99.5%.

Social Achievements

• Launched ARISE program to eliminate child labor through education and improvement of living standards in Brazil and Malawi.
• Implemented various community support programs in tobacco leaf producing regions.
• JT Volunteers to Support East Japan assisted in restoration and reconstruction work in disaster areas.
• JTI Japan Disaster Relief Fund raised nearly USD 6 million to assist victims of the Great East Japan Earthquake.

Governance Achievements

• Integrated “Principles of Conduct” and “Guidelines for Conduct” into the “JT Group Code of Conduct”.
• Restructured the Compliance Committee with over half the members being external experts.
• Adopted the Executive Officer System to separate decision-making from business management.

Climate Goals & Targets

Environmental Challenges

• Child labor in tobacco leaf producing communities.
• Forest destruction in tobacco leaf producing regions.
• Youth smoking.
• Power shortage following the Great East Japan Earthquake.

Mitigation Strategies

• Participation in ECLT Foundation activities and development of ARISE program.
• Reforestation and forest conservation activities in Africa.
• Youth smoking prevention campaigns, age verification cigarette vending machines.
• Electricity saving measures at factories and offices, relocation of some manufacturing.

Supply Chain Management

Responsible Procurement

• JT Group Responsible Procurement Policy
• Green Procurement Standards (domestic tobacco business)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 26000, Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard

Certifications: ISO 14001 (manufacturing establishments), OHSAS 18001 (cigarette factories), ISO 22000 (all frozen-food factories)

Sustainable Products & Innovation

• Mild Seven Style Plus series (uses less paper and plastic)

Awards & Recognition

• Eco Rail Mark Company
• 2011 Reduce, Reuse, and Recycle Contributor Award (JB Environment Network)

Environmental Metrics

ESG Focus Areas

• Youth Smoking Prevention
• Appropriate Manufacturing Process and Consumer Services
• Environmental Protection
• Harmonious Relationships with Local Communities
• Food Safety

Environmental Achievements

• Not disclosed

Social Achievements

• Organized Youth Smoking Prevention Council in cooperation with local tobacconists, municipalities, and police; implemented age verification cigarette vending machines; rolled out "Pick Up and You Will Love Your City" cleanup campaign; provided smoke separation consulting services to facility owners; conducted educational campaigns through newspaper ads and JT’s website; improved smoking areas in collaboration with municipalities.

Governance Achievements

• Strict compliance with laws and regulations related to tobacco advertising and sales promotion; adherence to voluntary rules set by TIOJ; implementation of food safety control programs across the JT Group; ISO 22000 certification for food safety in all frozen-food factories; implementation of food defense measures.

Climate Goals & Targets

Environmental Challenges

• Youth smoking; cigarette butt littering; lack of harmonious coexistence between smokers and non-smokers; potential risks in food supply chain.

Mitigation Strategies

• Youth smoking prevention programs; age verification vending machines; educational campaigns; smoke separation consulting services; "Pick Up and You Will Love Your City" initiative; ISO 22000 certification; food defense measures; improved product quality and traceability.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Traceability system for raw materials; quality assurance system for product freshness

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: ISO 22000 (for food safety)

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

• Fair Operating Practices
• Governance
• Anti-Corruption
• Combating Illicit Trade

Governance Achievements

• Established a Reporting Concerns Mechanism (RCM) for employees to report misconduct.
• Implemented a Code of Conduct addressing over 30 topics including health and safety, bribery, child labor, and anti-money laundering.
• Partnered with Deloitte for independent monitoring of customer operations.
• Implemented a ‘Know Your Customer’ (KYC) program.
• Achieved full compliance with the JTI/EU Cooperation Agreement and similar agreements outside Europe.
• Required compliance with the UK Bribery Act globally.
• Uses a GHE software application to record gifts, hospitality, and entertainment exchanges.

Climate Goals & Targets

Environmental Challenges

• Risk of corruption due to operations in over 120 countries and thousands of business partners.
• Illicit trade in tobacco products (contraband, counterfeit, illicit whites).

Mitigation Strategies

• Zero-tolerance policy on corruption with strict guidelines.
• Cooperation with government agencies, customs authorities, retailers, and consumers to prevent illicit trade.
• Robust compliance programs to monitor commercial partners.
• Participation in global product awareness campaigns.
• Founding member of the Digital Coding & Tracking Association (DCTA) to combat illicit trade using digital solutions (Codentify).

Supply Chain Management

Responsible Procurement

• Code of Conduct and Supplier Standards applied to business partners.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Waste
• Water
• Biodiversity
• Child Labor
• Agricultural Labor Practices
• Supplier Standards
• Human Rights
• Employee Development and Talent Management
• Equality & Diversity
• Responsible Marketing
• Food Safety
• Product Responsibility

Environmental Achievements

• Reduced total Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 11.5% since 2009
• Reduced overall waste generation by around 8% over 2012
• Reduced total water consumption by around 8% over 2012
• 75% waste recycling rate across the business
• Planted 3,304,679 trees in Zambia exceeding the target of three million

Social Achievements

• Launched ARISE program, withdrawing or preventing 3,071 children from child labor
• Invested ¥7,780 million in community investment and corporate citizenship programs
• Improved safety record in Sudan following acquisition of Haggar Cigarette and Tobacco Factory
• Reduced vehicle accidents by around 22% in the international tobacco business
• 96.1% participation in Employee Engagement Survey in Japan
• Established a Diversity Development Department in Japan to promote female representation in management

Governance Achievements

• Appointed an Executive Officer with dedicated responsibility for corporate social responsibility (CSR)
• Established a new CSR department in the international tobacco business
• Updated the anti-bribery and corruption requirements of JTI’s Code of Conduct in 2011
• 98.9% of eligible employees participated in compliance training in Japan

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (potential long-term risk)
• Child labor in tobacco growing communities
• Deforestation in tobacco growing regions
• Illegal trade in tobacco products
• Maintaining high safety standards across diverse geographies
• Improving the detail of waste monitoring to identify improvement initiatives

Mitigation Strategies

• Developed a Long-term Environmental Plan to 2020 focusing on climate change, waste, water, and biodiversity
• Launched ARISE program to address child labor
• Implemented agroforestry initiatives and reforestation programs to promote sustainable wood supply
• Established an Anti-Illicit Trade (AIT) team to combat illegal trade
• Implemented safety roadmaps and training programs to improve safety performance
• Ongoing, comprehensive energy survey in production facilities to identify energy saving opportunities

Supply Chain Management

Supplier Audits: 446 new supplier certifications in 2013; 11 supplier site assessments conducted by external auditors

Responsible Procurement

• Responsible Procurement Policy
• JT Group Principles in Leaf Tobacco Production
• Know Your Supplier (KYS) program
• Know Your Grower (KYG) program
• Agricultural Labor Practices (ALP)

Climate-Related Risks & Opportunities

Physical Risks

• Temperature changes
• Shifting weather patterns
• Water scarcity

Transition Risks

• Increased regulation
• Changes in consumer preferences

Opportunities

• Development of energy-efficient products and processes

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines (principles followed, not fully compliant)

Certifications: ISO 14001 (100% of Japanese domestic tobacco factories and 78% of international tobacco business factories), ISO 22000 (all Group and third-party contract frozen food factories)

Sustainable Products & Innovation

• Ploom (smokeless tobacco vaporizer)
• Zero Style (smokeless tobacco product)

Awards & Recognition

• Various local best employer awards and ratings

Environmental Metrics

ESG Focus Areas

• Sustainability (CSR)

Climate Goals & Targets

Environmental Challenges

• Different financial reporting periods for Japanese and international operations leading to varied data coverage.

Mitigation Strategies

• Transitioning towards calendar year reporting to improve data uniformity.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines (principles followed, not fully compliant)

Awards & Recognition

• Tokyo Stock Exchange Corporate Activity Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Capital Management
• Responsible Supply Chain Management
• Product Stewardship
• Good Governance

Environmental Achievements

• Reduced Scope 1 and 2 GHG emissions by 16% from the 2019 base year.
• Reduced Scope 3 emissions associated with purchased goods and services by 11% from the 2019 base year.
• Achieved 82% packaging recyclability and 18% recycled content in total packaging materials.
• Full ALP implementation in Bangladesh and Ethiopia.

Social Achievements

• Launched a new family leave policy granting 20 weeks of paid family leave.
• Invested around 51 million US dollars in corporate community investment.
• 92% employee engagement survey response rate (17% higher than the external benchmark).

Governance Achievements

• Board effectiveness evaluation yielded generally positive results.
• Established the JT Group Purpose: “Fulfilling Moments, Enriching Life”
• Unified tobacco businesses into a single business segment.

Climate Goals & Targets

Environmental Challenges

• Shrinking industry volume and downtrading in the tobacco business.
• Government reductions of official drug prices in the pharmaceutical business.
• Higher costs for raw materials and labor shortages in the processed food business.
• Growth in illicit trade.
• Tightening of tobacco regulations.
• Country risk.
• Currency risk.
• Pandemics.
• Unfavorable litigation developments.
• Natural disasters.
• Climate change.

Mitigation Strategies

• Raising prices to pass on tax increases to consumers.
• Optimizing product portfolio and improving cost efficiency.
• Strengthening global operational platform.
• Taking action to eradicate illicit trade.
• Pursuing constructive dialogue with governments and regulatory authorities.
• Optimizing product portfolio and strengthening sales capabilities.
• Formulating foreign-exchange hedging policies.
• Implementing preventive/anti-pandemic measures.
• Applying a system to cooperate internally and externally and respond to litigation cases.
• Adopting a Business Continuity Plan.
• Conducting climate scenario analysis and reducing GHG emissions.

Supply Chain Management

Responsible Procurement

• Human rights and environmental due diligence
• Agricultural Labor Practices (ALP) program
• Sustainable Tobacco Program (STP)
• RBA member

Climate-Related Risks & Opportunities

Physical Risks

• Impact on crop growth conditions due to changes in environmental conditions
• Water scarcity
• Higher-than-average temperatures and unusual precipitation patterns

Transition Risks

• Potential cost increases due to governments raising carbon taxes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, TCFD recommendations

Certifications: ISO 14001, ISO 50001

Sustainable Products & Innovation

• Ploom X
• RiceResin® packaging

Awards & Recognition

• Global Top Employer (JTI)
• White 500 (JT)
• Swiss LGBTI Label (JTI Geneva)
• PRIDE Index Gold status (JT)
• Member of FTSE Blossom Japan Indices
• Member of S&P/JPX Carbon Efficient Index
• CDP’s “A List” for climate change

Environmental Metrics

ESG Focus Areas

• Living with the planet
• Value creation that exceeds consumer expectations
• Investing in our people and supporting their growth
• Responsible supply chain management
• Good governance

Environmental Achievements

• Achieved a place on CDP’s prestigious “A List” for both tackling climate change and water security, recognized for its leadership in corporate sustainability (sixth recognition for climate change, fourth for water security)
• Recognized as Supplier Engagement Leader 2023 in addressing climate change for the fifth consecutive year
• Reduced water withdrawal associated with its tobacco business by 15% compared to 2015 levels ahead of schedule
• Achieved a 20% reduction in waste associated with its tobacco business compared to 2015 levels ahead of schedule
• 88% of packaging (including plastic) was reusable or recyclable in 2023

Social Achievements

• Achieved Gold status in the PRIDE Index for the eighth consecutive year
• JTI was certified as a Global Top Employer for the tenth consecutive year
• 100% of directly contracted growers are now covered by the Agricultural Labor Practices (ALP) program
• 66,825 at-risk children were withdrawn or prevented from child labor and enrolled in education through the ARISE program
• 11,310 Group employees volunteered and worked a combined total of 24,549 hours

Governance Achievements

• Strengthened corporate governance by making changes to the composition of the Board of Directors, establishing the Advisory Panel on Nomination and Compensation, and reviewing the executive remuneration policy
• Board effectiveness evaluation for 2023 yielded generally positive results

Climate Goals & Targets

Environmental Challenges

• Geopolitical risks, higher supply chain costs amid global inflation, and large exchange rate fluctuations
• Decline in total industry volume, ongoing downtrading, new and increasing geopolitical risks, tighter and more complex regulations and tax regimes on RRP, intensifying competition, and currency risks (Tobacco)
• High public pressure for drug price reductions amid a worldwide need to reduce healthcare costs (Pharmaceutical)
• Rising supply chain costs with inflation and greater investments in RRP (Tobacco)
• Lopsided sales mix by category and expansion of sales to overseas markets, rebuilding logistics network to ensure supply stability, contraction in domestic demand due to societal aging and population shrinkage; labor shortages due to working-age population shrinkage, industry inflation driven by global food shortages; distribution cost inflation due to labor shortages in logistics industry (Processed Food)

Mitigation Strategies

• Continued focus on future-oriented business investments
• Accelerate strategic investments in HTS, sustained share expansion and pricing opportunities in combustibles (Tobacco)
• Conduct research and development of next-generation strategic products and work to maximize the value of each product (Pharmaceutical)
• Allocate resources to high-value product groups and take necessary related measures (Processed Food)
• Implement initiatives to accelerate the development of new RRP platforms, adapt device procurement strategy to be more resilient in case of disruptions, accelerate the pace of environmental impact reduction initiatives, expand capabilities in areas of digital, advanced analytics and B2C, enhance e-commerce capabilities (Tobacco)

Supply Chain Management

Supplier Audits: 100% of key suppliers screened against ESG criteria (Tobacco)

Responsible Procurement

• Agricultural Labor Practices (ALP) program
• Leaf Supply Chain Due Diligence process
• JT Group Supplier Code of Conduct
• Supplier questionnaires
• RBA Code of Conduct
• RBA Validated Assessment Program
• OECD Due Diligence Guidance for Responsible Supply Chains of Minerals

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding, landslides, intense heat waves, heavy snowfall, drought, water-resource change, biodiversity loss

Transition Risks

• Increased carbon taxes, changes in growing environments due to rising average temperatures

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001

Sustainable Products & Innovation

• Ploom X
• Ploom X ADVANCED
• BEYOND FREE line of foods
• CORECTIM® Ointment
• ENAROY® Tablets

Awards & Recognition

• CDP A List (Climate Change and Water Security)
• Supplier Engagement Leader 2023 (Climate Change)
• Global Top Employer (JTI)
• Gold PRIDE Index (JT)
• Swiss LGBTI Label (JTI)
• Product of the Year award (Ploom X in the UK)

Environmental Metrics

ESG Focus Areas

• Biodiversity
• Emissions Reduction
• Renewable Energy
• Water Stewardship
• Waste Reduction
• Sustainable Agriculture
• Reduced-Risk Products
• Youth Access Prevention
• Diversity, Equity & Inclusion
• Talent Attraction & Retention
• Health and Safety
• Employee Development
• Supplier Screening & Supply Chain Due Diligence
• Grower Living Income
• Human Rights
• Community Investment

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: 100% key supplier screening by 2023 (Tobacco); Supply Chain Due Diligence maturity score >90% for all tobacco supplying entities by 2028 (Tobacco); Complete supply chain due diligence of all key suppliers for pharmaceutical and processed food businesses by 2025 (Pharmaceutical & Food)

Responsible Procurement

• JT Group Supplier Code of Conduct; supplier questionnaires (Processed Food); Agricultural Labor Practices (ALP) program (Tobacco)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Global Top Employer (Tobacco Business)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• More sustainable filter alternatives (Tobacco)

Awards & Recognition

• Not disclosed