Non-tobacco materials, other products, and services

Non-tobacco materials include packaging, filters, and cigarette-related materials. We also have a number of suppliers for factory machinery and logistics, including freight. We manage the sourcing of these centrally. Other products and services that flow through our supply chain include marketing-related services, facility management, IT, and other professional services, which are sourced globally, regionally, and locally.

We develop strong partnerships with our key suppliers in order to achieve mutual long-term success. Our strategic relationships are built on shared values and objectives, which allows us to find sustainable solutions together, ensure a stable supply in a dynamic environment, and be able to adapt to innovative technologies.

Target

SUPPLIER SCREENING

We will screen all key suppliers against environmental, social, and governance criteria by 2023.

Progress

At the end of 2019, 67% of our key suppliers were screened against ESG criteria*.

Read more about our latest progress on the JT Group's tobacco business sustainability strategy.

*Results for our international tobacco business.

Supplier screening

At the end of 2019, 67% of our key suppliers were screened against ESG criteria in our international tobacco business. As our supplier screening target shows, we are committed to achieving 100% by 2023.

We aim to achieve high standards of integrity across our business operations and supply chain. We can only achieve this through close cooperation with our suppliers.

In our international tobacco business, prior to entering into a commercial relationship, our key suppliers* undergo a screening process which includes onboarding and qualification. This process allows us to understand potential risks related to compliance, human rights, environment, and health and safety. If any risks are identified, we offer support and collaboration on how to mitigate these risks and make necessary improvements.

In 2019, we further enhanced our supplier screening process by introducing our ‘Lookback’ screening service to identify potential supply chain risks with new key suppliers. This service automatically reviews a potential key supplier’s business history over the previous five years using publicly available information. We have also strengthened and automated the annual process for renewing the certification of our existing key suppliers, by integrating a continuous key supplier monitoring service.

In Japan, suppliers of non-tobacco materials and other products and services are screened against the JT Group Supplier Standards, and we regularly monitor key suppliers though surveys.

*Key suppliers are defined as suppliers with a planned annual spend greater than 500,000 U.S. dollars, suppliers who either purchase or handle Japan Tobacco International tobacco products, leaf merchants, suppliers representing Japan Tobacco International before government, and contract manufacturing, and licensees.

Case study

Reducing the environmental impact of packaging

We take pride in the quality of our products. To make sure that our cigarettes reach consumers in optimal condition, they are delivered in packaging that utilizes cardboard and plastic film. To reduce the environmental impact of this packaging, we are running several initiatives across our operations to use less of these materials, or to replace them with more environmentally friendly alternatives.

For example, we have worked with our suppliers to optimize the use of cardboard and plastic film in our packaging, without compromising on quality. As a result, we have reduced our paper and cardboard-related consumption by approximately 1,700 tons per year, and our plastic film consumption by approximately 500 tons per year. This reflects our commitment to addressing growing consumer concern about single-use plastic and sustainability.

We are currently developing targets and action plans relating to the appropriate use and responsible disposal of materials, including plastics, used in our products and packaging. We are also committed to reducing waste by 20% in our own operations by 2030, and will continue to work hard to meet this target.