Tobacco is an agricultural crop which, like other farmed goods, faces a number of social and environmental issues. A sustainable supply of tobacco requires good agricultural practices to be upheld by our suppliers and farmers at all times. All of our tobacco suppliers are required to participate in our Sustainable Tobacco Programme (STP), which is one of our key platforms to ensure our minimum standards are met in the growing and processing of tobacco. We take pride in driving supply chain standards and we are committed to purchasing tobacco from socially and environmentally responsible suppliers.
WHY IS IT IMPORTANT?
It is important for us to know that the standards we expect in terms of quality, labour practices and environmental concern are being adhered to by the suppliers from whom we source tobacco. This has a direct financial impact to the business and has the potential to make a significant impact on our business sustainability.
We source tobacco from all around the world including Brazil, India, China and Sub-Saharan Africa. Approximately 97% of our tobacco is sourced from third party suppliers, with the balance coming from our own vertical operations in Madagascar and Laos. The tobacco supply chain varies from country to county. For example, in Sub-Saharan Africa there are tens of thousands of smallholder farmers, compared with the USA where there are large commercial tobacco farms. Despite these differences, we apply the STP globally and expect standards to be implemented consistently across our geographic footprint.
We also work in all areas of tobacco leaf research, aiming to improve resistance to plant disease and leaf quality amongst other areas. Please see our Science website for more information.
WHAT ARE WE DOING ABOUT IT?
We take a responsible approach to sourcing tobacco and work with our suppliers and farmers to address good agricultural practices, improve labour practices and protect the environment. The STP sets out the minimum standards we require of our tobacco leaf suppliers. It is a framework for continuous improvement and involves self-assessment questionnaires, improvement plans and independent reviews. The STP is an industry-wide programme administered by a third-party service provider.
We use the information provided through the STP to inform our supplier ratings, focus interventions, enrich supplier dialogue and enable our Leaf Sustainability team to work more effectively to support our suppliers.
We seek to drive continuous improvements through the STP framework. This framework enables our suppliers to generate their own action plans; build their own capabilities with support from their Leaf Technicians; and share good practice which is facilitated by a third-party service provider. Our leaf partnership investments and the work of our own Leaf Sustainability Team further support the farmers.
Through the STP, we have determined a baseline performance which is our minimum acceptable standard. If a supplier fails to meet the minimum performance requirements, our preference is to work with them to understand when and how the supplier will reach the standards.
The STP performance score is part of our formal supplier relationship management and it forms part of the suppliers’ ratings that we determine along with quality, cost and value. The better a supplier’s score, the more likely they are to receive repeat business.
We are in the process of redefining our requirements for the STP framework. Along with subject matter experts and the wider industry, we are enhancing the programme to better address the risks and opportunities arising from the different geographic locations where the tobacco farmers and suppliers are based. This will further enhance our transparency and reporting of our sustainability impacts and practices in our agricultural supply chain. We anticipate development of the STP framework through 2020.
As a result of our commitment to purchase tobacco from socially and environmentally responsible suppliers, we will cease to purchase from any suppliers who persistently fail to achieve our required performance standards; however, our preference is to partner and enable improvement.
FARMER LIVELIHOODS AND WELFARE
Through our leaf partnership projects we target our support to communities in tobacco-growing countries identified as having the most need. We focus our projects on enhancing tobacco farmer productivity, income, reducing labour requirements and improving farming inputs.
This is important in securing quality tobacco supplies for our business and at the same time providing farmers with better incomes, higher standards of living and also mitigating the potential risk of child labour.
We acknowledge the impact of declining tobacco consumption rates on our tobacco farming communities. For many years we have worked with our suppliers to support tobacco farmers to grow alternative crops to be consumed by their family and marketed for extra income. This includes growing crops such as vegetables, maize, beans and groundnuts.
The good agricultural practice training that farmers receive is used to improve the yield and quality of tobacco, as well as well as other cash or food crops. Not only does this improve their yield, but also protects and maintains soil nutrients which will ensure that these crops continue to flourish in the future. Through the support of our suppliers, farmers have a route to market allowing them to diversify their business and receive a supplementary income.
We allocate over ￡1 million annually into our Leaf Partnership projects. This is predominately to support farmer livelihoods and welfare and assist rural communities from where we source tobacco. Our Leaf Partnership projects are currently supporting a range of initiatives including the development of boreholes, dams and weirs in Malawi and Mozambique. We have also provided digital equipment for schools in India, personal protection equipment (gloves, hats and facemasks) to farmers in Lebanon and provided funding for fruit trees and tobacco-curing barn improvements in Laos.
We use wood in tobacco production, either as a fuel in the curing of tobacco or as construction material when building barns for the processing of tobacco. The issue of deforestation is most relevant to us in Africa, where we work with suppliers and communities to collectively address the issue.
We are committed to achieving wood sustainability in Africa by 2022, which means that by 2022, every tobacco leaf that we purchase from Africa will be with the knowledge that it has been cured using a sustainable and responsible source of wood. With a sustainable supply of wood, farmers are able to use wood in the tobacco curing process without damaging the local environment.
Since 2013 we have directly funded over 3,400 hectares of forest plantations in Malawi, Zimbabwe, Tanzania and Mozambique. Planting these trees decreases the pressures on the indigenous woodland that is being harvested to support the ever-growing population and their agricultural practices.
We are also financially supporting national forestry programmes in Tanzania, Mozambique, Zimbabwe and Malawi, promoting the value of trees to farmers. In addition to the environmental benefits of our forestry programme, there are also economic benefits for farmers in labour savings and the reduced cost of wood and transport. We are pleased with the survival rate of trees and are on track to be wood sustainable in Africa by 2022.
Our afforestation programme also considers the issue of biodiversity. Where possible, we encourage the planting of trees which encourages the development of local insect and bird populations. These projects improve wildlife habitats and food sources for a number of animal species. Furthermore, STP, which all our tobacco leaf suppliers are required to participate in, encourages suppliers to gather data on areas of biodiversity value in and around the tobacco growing areas to create and implement a biodiversity management programme. This involves mapping areas of high biodiversity value, such as ponds, watercourses and woodland that may be affected by tobacco production.
Since 2012, we have funded the construction of over 5,000 energy efficient tobacco-curing barns. These barns can use up to 30% less wood fuel compared to standard curing barns and have contributed to significant reduction in emissions from our tobacco supply chain.