OVERVIEW

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 their farmers at all times.

Our tobacco suppliers are required to participate in the Sustainable Tobacco Programme (STP), an industry wide programme which is one of our key platforms supporting our Environmental, Social and Governance (ESG) agenda. In addition to the STP we also conduct direct dialogue with our suppliers on key ESG priorities and support their efforts to improve farmer livelihoods through our Leaf Partnership Program.

We take pride in working with our suppliers to advance good agricultural practices and 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 impact to our business as well as the potential to impact 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 producing smaller volumes per farmer, compared with the USA where there are large commercial tobacco farms with a large individual output. Despite these differences, we expect a high level of consistency to be implemented across our geographic footprint.

We partner with suppliers in tobacco leaf research, aiming to improve resistance to plant disease and leaf quality amongst other areas. 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, which includes improving labour practices and protecting the environment. The STP is a framework for continuous improvement and involves annual self-assessment questionnaires, improvement plans and independent reviews.

The STP annual assessment is part of our formal supplier relationship management and it forms an integral part of how we assess supplier’s performance along with quality, cost and value. We maintain ongoing dialogue with suppliers on driving continuous improvement.

In 2020 the STP questions and guidance were reviewed to better align with the United Nations Guiding Principles on Business and Human Rights and the UN Sustainable Development Goals. The STP has been restructured to identify risks and opportunities based on the geographical location of our suppliers.

The STP will ask suppliers to focus on priority areas, and suppliers will need to provide details on what actions they are taking against these priorities and what measures they have in place to determine how successful any interventions are. This risk-based approach will allow us to better support our suppliers and further enhance our transparency and reporting of our sustainability impacts and practices in our agricultural supply chain.

We are committed to purchase tobacco from socially and environmentally responsible suppliers and will discuss successes and challenges with suppliers to enable improvement. Where a supplier persistently fails to demonstrate how they are managing their ESG responsibilities in a certain sourcing origin, we will consider ceasing to purchase from that sourcing origin. This is a last resort as we prefer to work in partnership to raise standards.

WHAT ARE THE KEY ISSUES?

CHILD LABOUR

Is unacceptable and we make every effort to stop it happening in our supply chain.

FARMER LIVELIHOODS AND WELFARE 

We're partnering with our suppliers to focus support in farming communities.

FORESTRY

We work with suppliers and local community groups to support wood sustainability projects.

FARMER LIVELIHOODS AND WELFARE

We are committed to supporting farmers to diversify income streams, in order to enhance farming community 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 access to basic needs.

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.  

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 also help support access to basic needs within supplying communities and, in 2020, we funded water projects that benefitted over 12,000 community members.
 

FORESTRY

We use wood in tobacco production, either as a fuel in the curing of tobacco or as construction material for building barns required 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.

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 for use in tobacco production. 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. 

In 2019 we took the decision to transfer the forestry projects to our major leaf suppliers so they may continue the goal to achieving wood sustainability. For more details see our case studies.

The focus will now be in burley tobacco production through the monitoring and driving the development of the national and live barn initiatives. A live barn is achieved by planting trees in the shape of a barn and as they grow, they become the barn structure. Performance of these initiatives will continue to be measured in all future business considerations through internal verification of survival rates.

Imperial has also financially supported national forestry programmes and as we purchase tobacco will continue to do so in Tanzania, Mozambique 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. 

Our afforestation programme also considers the issue of biodiversity. Where possible, we encourage the planting of indigenous 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, the Sustainable Tobacco Programme (STP), which all our tobacco leaf suppliers are encouraged 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.
 

OUR APPROACH

Our sustainability strategy is integral to the long-term success of our business and underpins our drive to create shared value for our stakeholders.

CASE STUDIES

Our case studies showcase our progress against our sustainability strategy.

ESG PERFORMANCE

See the progress we’ve made against our key performance indicators during 2020.