The 4S model, Materiality, Sustainability strategy, SDGs

Overview

The 4S model, Materiality, Sustainability strategy, SDGs

The 4S model

We strive to fulfill our responsibilities to our valued consumers, shareholders, employees and the wider society. Carefully considering the respective interests of these four key stakeholder groups, and exceeding their expectations wherever we can.

The 4S model

Consumers, shareholders, employees, and society - these are the four stakeholder groups (4S) at the heart of everything we do at JT. Our commitment to serving these groups is represented in the 4S model.

We always try to exceed the expectations of our four stakeholder groups wherever we can, based on the principles of the 4S model. For our consumers, this means offering superior products that meet or go beyond their evolving needs. For our shareholders, we aim to enhance returns based on our profit growth outlook and strike a balance between providing shareholder returns and investing in the business for future profit growth. For our employees, we will work to ensure that we maintain our reputation as a respected member of the community and a company that they can feel proud to be a part of. And we will continue to contribute to society as a whole, recognizing that our growth benefits from a sustainable society, and in doing so enhance our corporate value.

Our vision, based on the 4S model, is to achieve global growth by providing value unique to our Group. Our mission - our concrete action plan to achieve our vision - is to create, develop, and nurture our brands to meet consumers' needs while understanding and respecting the environment and the diversity present in society.

The JT Group’s material issues

To help the JT Group to grow, and to build a sustainable future as a member of the society in which we operate, we have identified a list of high-priority material issues. Our materiality is based on the JT Group’s management principle, the 4S model. In 2015, we performed a materiality assessment covering the entire Group for the first time, selecting material issues through interviews with our internal and external stakeholders.

To identify our material issues, we began with a media and peer review, which generated a list of sustainability topics relevant to the Group. In addition to interviews with employees, our CEO, and other members of top management, we held interviews with 17 external stakeholders, including suppliers, investors, labor unions, NGOs, and industry associations. Our top management then approved the results of the materiality assessment during a special workshop.

This process resulted in a final list of 22 material issues. We then divided these into two categories according to their level of importance to the JT Group and our external stakeholders: medium or high.

Since 2015, we have continued to listen to our stakeholders and adapted our materiality according to the changing external business environment.

In 2020, we focused on the following key issues across the entire JT Group.

  • Environment: (a) Supporting the TCFD (Task Force on Climate-related Financial Disclosures) and (b) the appropriate use and responsible disposal of materials, including plastics, used in our products and packaging.
  • Investing in people: Equality and diversity in the workplace.

The COVID-19 pandemic obviously also had a major impact on our approach in 2020. From the onset of the global crisis, we have prioritized the safety of our employees and their families, and all of our other stakeholders. We have taken many different steps such as strengthening occupational health and safety measures to protect our employees and to mitigate potential disruption to our consumers and partners. We have kept our business running by expanding existing systems such as remote working and flexible hours, and implementing ‘New Ways of Working’. The JT Group will continue to support the communities where we operate in any way we can.

In the tobacco business, which is our core business, we will strengthen our investments in Reduced-Risk Products (Reduced-Risk Products (RRP): Products with the potential to reduce the risks associated with smoking.), the pillar of our future business growth, while realizing steady profit growth through RMC. We will continue to work on ‘product innovation’ as a material issue to continue to provide new value to our consumers.

The business environment surrounding the JT Group will continue to evolve rapidly in 2021 and beyond. We will carry out periodic materiality assessments, reviewing and updating the priorities as necessary to ensure that they remain relevant and up-to-date.

The 4S model, Materiality, Sustainability strategy, SDGs

Sustainability strategy overview

The JT Group's sustainability strategy is based on the 4S model, our management principle, and encompasses our materiality analyses. It encourages us to look beyond our usual planning cycle period and think about the longevity of our business, the future of our planet, and the society we live in. The foundations of our sustainability strategy, which apply across the Group, are as follows.

The JT Group’s three absolute requirements for sustainability

  • Respect for human rights

    We are committed to respecting human rights across our global operations and value chains, as expressed in the JT Group Human Rights Policy.

    Read more

  • An improved social and environmental impact

    We are committed to protecting the environment and making a positive difference wherever we operate.

    Read more about how we are improving our social and environmental impact

  • Good governance and business standards

    We are committed to promoting transparent, fair and timely decision-making that carefully considers the respective interests of consumers, shareholders, employees and the wider society.

    Read more

Tobacco business sustainability strategy

We have selected the following four focus areas for the tobacco business, which is our core business. We have set 11 specific targets for the focus areas and have been reporting on progress since 2019. In 2020, we set a new target relating to the appropriate use and responsible disposal of materials, including plastics, used in our products and packaging.
Focus areas Aspirational goals
Products and services

We will be a total tobacco company offering consumers an even greater choice of products by focusing on quality, innovation, and reduced-risk potential.

People

We will be the employer of choice by investing in people.

Supply chain

We will reduce environmental and social risks, and enable transparent and responsible practices across our supply chain.

Regulatory environment and illegal trade

We will ensure the Company is included in policymaking leading to fair and balanced regulation, and enhance our cooperation with governments to combat illegal trade.

Pharmaceutical business sustainability strategy

The mission of our pharmaceutical business is to create innovative, original drugs to support patients in the shortest time possible. In view of this mission, in 2019, we selected the following three focus areas. We set five specific targets for these focus areas and 2020 is the first time we are reporting on our progress towards achieving the targets.
Focus areas Aspirational goals
Products and services

We will create innovative, original drugs to support patients in the shortest time possible.

People

We will strive to nurture talent development which enables us to create first-in-class (FIC) drugs.

Product safety and responsibility

We will strictly comply with all relevant laws, regulations, and industry standards in order to deliver safe drugs to patients.

Processed food business sustainability strategy

Our mission in the processed food business is to deliver safe, high-quality products to consumers. In 2019, we selected the following three focus areas. We set eight specific targets for these focus areas and 2020 is the first time we are reporting on our progress towards achieving the targets.
Focus areas Aspirational goals
Products and services

We will continue to provide high-quality, technology-driven products in response to our customer's needs, to satisfaction and trust.

People

We will ensure workplace safety for our employees, while continuously investing in people who can contribute to enhancing corporate value.

Supply chain

We will reduce social and environmental impacts and continue to deliver safe products to consumers.

Contribution to the SDGs

The JT Group supports the Sustainable Development Goals (SDGs) adopted by the United Nations. Through our business activities, the JT Group will contribute to the SDGs related to our business and its environment. We have mapped related SDGs against our initiatives for sustainable business, and identified the nine SDGs to which our business can best contribute.