A sustainable approach to environmental stewardship
We align our environmental and energy management systems with relevant international standards (namely IS0 14001 and ISO 50001) and have also developed the JT Green System (a simplified environmental management system) to promote a sustainable approach to environmental management in our smaller and less complex operations.
Recent revisions to ISO 14001:2015 have required ongoing actions during 2017, including aligning our environmental management systems with these updates. We also started to integrate energy management into our existing management systems.
Going forward, we will continue to explore how we can better integrate our environmental and energy management systems with other business considerations, such as Quality, Occupational Health and Safety, and other operations. While this presents challenges, it also brings with it opportunities. We are piloting the approach to developing an integrated quality, environment, health and safety management system at our Leaf factory in Malawi. We will use the insights gained from this process to help other factories build more efficient and integrated management systems.
JT Group long-term environment plan 2020
ISO 14001 Certification
We use ISO14001 as the framework for our environmental management systems to manage significant environmental aspects. We have this KPI to track the proportion of our cigarette and tobacco related factories that are certified to ISO14001. We have a target to achieve 100% ISO14001 certification of those factories by 2020. Data for current and past certification of our factories can be found under 'Environmental Data'.
Climate change remains the most important environmental challenge of our times. For the JT Group, and particularly for our tobacco business, climate change can directly affect the supply of key raw materials, including tobacco and many of the production materials used across our supply chain.
It is, therefore, critical that we reduce fossil fuel energy use and greenhouse gas (GHG) emissions for the benefit of the planet, and of our business.
GHG emissions in our operations
The JT Group remains committed to cutting its GHG emissions, notably through focusing on energy reduction, and increasing the proportion of renewable energy that we use.
We have reduced absolute GHG emissions between 2009 and 2017 by 21.2%, achieving the target set out in the JT Group Long-Term Environment Plan 2020*1. This was achieved through a number of initiatives, one of them being the use of renewable energy. GHG emissions relate to both Scope 1 emissions (those for which we are directly responsible), and Scope 2 emissions (those related to energy supplied by third parties). We are still working hard to meet our 2020 emissions intensity target. To achieve this, we have set a goal to improve our overall emissions efficiency by a further 5%, during the period 2018-2020.
Planning and Promoting Emission Reduction
As part of our efforts to tackle GHG emissions, we have established a cross-functional team for renewable energy, allowing for a more coherent approach towards renewable energy and emissions reduction. To help compare various GHG reduction projects, in terms of anticipated emissions reduction, the cost of that reduction, and also project payback, we have adopted a tailored MACC*2 tool. This helps us better plan and prioritize projects and focus our GHG reduction efforts. Our new Environment Plan will include revised emission targets in line with science-based approaches, taking into account the Paris Agreement on climate change.
We are pleased that more and more of our factories and offices now purchase or generate energy from renewable sources.
Examples of renewable energy purchased: Sweden, Romania, Germany, Canada, Switzerland, Poland
Examples of renewable energy generated on-site: Brazil, Turkey, Jordan, Nigeria, The Netherlands.
The majority of our factories continue to implement energy reduction opportunities. One impressive example of this is our factory in Malawi, which achieved an almost 65% reduction in electricity consumption from 2015 to 2017.
In 2017, our factory in Tainan (Taiwan) became the first JTI factory to be awarded a Leadership in Energy and Environmental Design (LEED) Certificate from Green Business Certification Inc. (GBCI®). This represents official recognition of our leadership in energy and environmental building design, and an acknowledgement of efforts made in the areas of energy and water efficiency and innovation, amongst others.
Water is a fundamental resource for the JT Group and, in particular, for our processed food business. Water is also a risk factor within our operations. Water-related issues, such as availability, quality, flooding, drought, and how water is regulated, represent potential risks to our business.
We take steps to ensure effective water management. We do this by ensuring our business units set annual withdrawal targets and by undertaking water risk assessments in our factories. We have a target to complete our water risk assessments at all of our manufacturing sites by 2020. By the end of 2017, we had completed water risk assessments at 40 of our factories (56%).
As part of our new Environment Plan we are committing to context-based water targets for relevant parts of our business.
Recent water-related improvement projects include water recovery and recycling at our factories in Turkey, Jordan, and Russia, and improved wastewater treatment at two of our Russian factories.
Recognized for Environmental Leadership
In 2017, we achieved Leadership status in both CDP Climate Change and CDP Water. In addition, we invited 47 of our suppliers to disclose information about climate change and water management through the CDP Supply Chain Program. We recognized World Water Day 2017 with a seminar at our Geneva headquarters, where we showcased our approach to water management and water-related community projects in Malawi, Ethiopia, and Bangladesh.
Going forward, we will be further investigating the potential environmental impacts, including water-related issues, in our Reduced-Risk Products supply chain.
Waste management is a key component of both our current and new Environment Plans. Across the company we apply a ‘Reduce, Reuse, Recycle’ philosophy approach to waste management. We believe that, if waste is reduced, resources can be reduced, and so can costs to the business. Our factories develop targets for reducing waste, and increasing the proportion of waste recycled.
We experienced an unexpected challenge in 2017 resulting from an unintended consequence of legislation: one of our European factories was faced with increased recycling targets, leading to more waste being diverted for recycling instead of being reused. This increased the overall quantity of waste generated, and resulted in higher costs.
We are also seeking ways to better manage electronic and electrical waste within our Reduced-Risk Products supply chain. To address this, we are developing guidance around improved waste management in this area. Turn to page 23 to read more about environmental practices for our Reduced-Risk Products.
Responsible management of biodiversity within our operations supports the long-term viability of our business, whilst protecting the environment.
Embedding biodiversity considerations into internal management processes and strategic decision making is fundamental to our business. This involves assessing our dependence and impact on biodiversity and natural resources and identifying how we utilize and manage these. We then deploy appropriate responses, such as good agricultural practices, initiatives on soil management, sustainable wood and water conservation, and natural forest restoration.
In 2017, we launched our project on nature restoration in Brazil. This was in collaboration with the Society for Wildlife Research and Environmental Education, and approved by the National Bank for Social Economic Development. Over the next five years, the project aims to restore 335 ha of Permanent Protection Areas at our integrated tobacco farms as well as in Flona de Irati, a National Forestry Reserve; seedling planting has already started in this area. The project will contribute to environmental conservation in Brazil, increase our efforts in protecting biodiversity, and impact positively on our farmer communities.
Our Miombo Woodland Project in Zambia is an initiative for the sustainable management of Miombo woodland. It includes, amongst other things, the conservation of wood, rehabilitation of existing woodland areas, and empowerment of communities to use these resources sustainably. Achievements from the first phase of the project, completed in 2017, include a baseline study, engagement with local communities and local authorities, and training on sustainable bee keeping, use of efficient cook stoves, and improved land management.
To improve farm productivity and reduce farming costs, we invest in innovation. This includes partnering with leading international academic institutions and non-governmental organizations. Our Agronomy, Development, Extension, and Training (ADET) centers in Brazil and Zambia carry out research into topics that ultimately enhance returns for farmers in the long term. We have recently developed a protocol to help farmers establish an inventory of biodiversity and how to monitor it. This enables farmers to implement action plans for environmental restoration in relation to native vegetation, water, soil, fauna, and climate.
Some of our environment data has been externally verified.