Category: Sustainability

JT Publishes Human Rights Report

Japan Tobacco has published its first Human Rights Report, showcasing the group’s contributions over the past decade to the U.N. Guiding Principles on Business and Human Rights, marking the 10th anniversary of their inception.
The report sets out the pillars of JT Group’s human rights strategy, which is an essential part of the group’s business activities and one of three absolute requirements of its sustainability strategy.
“This important milestone for the U.N. and the global business community is an opportunity to highlight our progress and the ongoing process of embedding human rights into every area of our business,” said Masamichi Terabatake, president and CEO of JT Group, in a statement.
June 16, 2021
Fearless Fighter

Mayiwepi Jiti
How Mayiwepi Jiti became a successful commercial grower in Zimbabwe’s male-dominated leaf tobacco industry.
By Stefanie Rossel
In sub-Saharan Africa, more than 60 percent of employed women work in agriculture. As shown by the example of Malawi (“This Is a Man’s World,” Tobacco Reporter, May 2021), they are at a significant disadvantage compared to men as women often lack control over land and access to financing while being excluded from important links of the agricultural value chain. Being dependent on a male relative to access the land, they are vulnerable; a husband’s death, a divorce or simply a man’s change of mind can leave a female farmer landless overnight.
Zimbabwe is no exception. Tobacco, which today is grown primarily by smallholder farmers, accounts for about 40 percent of the country’s exports. According to the Borgen Project, approximately 72 percent of the country’s population lives in chronic poverty, and 84 percent of Zimbabwe’s poor live in rural areas. Zimbabwe has yet to recover from the 2008 financial crisis. Its gross domestic product (GDP) has been declining since 2013, in part due to stalling investments and adverse climate conditions that hurt the agricultural sector.
“Zimbabwean women played and are still playing a pivotal role in resuscitating the country’s agricultural sector after its dilapidation by the Zimbabwean-British relations,” explains Mayiwepi Jiti. As a successful commercial farmer employing more than 200 permanent and seasonal workers and as the founder and president of the Zimbabwe Integrated Commercial Farmers Union (ZICFU), she is a rare example of a powerful woman in the country’s agricultural sector.
“Women are bearing positive results on the country’s economy, where tobacco accounts for 10.7 percent of the country’s GDP. However, the Gender Links 2013 Barometer on Zimbabwe reported that although Zimbabwe’s economic framework calls for women’s participation in key sectors of the economy, there are no gender-responsive policies in the agriculture sector. Plans are underway for the government to align legal frameworks that would ensure equal opportunities between men and women.”
Before the land reform of 1999, not a single woman owned a commercial farm in Zimbabwe’s mostly patriarchal commercial farming system. Females would inherit land only when there were no male heirs. Things gradually began to change from 2000, when the government redistributed land to redress the imbalances of landownership and a small number of Zimbabwean women secured land and became commercial farmers. Due to lack of funding in agriculture, contract farming was introduced as a temporary relief, but conditions remained unfavorable, especially for women.
Out of more than 110,000 small-scale farmers today, 39.5 percent are women, says Jiti—an increase triggered by a rise in the number of single mothers, either widowed or divorced or pressed with financial responsibilities. In tobacco farming, these women are accepted as equal partners when they are selling tobacco on the tobacco floors, but due to gender-based constraints and shortages of funds to compete with the patriarchal society, they are not yet fully involved in all stages of the tobacco value chain, Jiti points out. “This makes it difficult to be involved in decision-making and inclusion on finance issues. Women have a very limited voice in that aspect.”

In less than two seasons, I proved both the financiers and family members wrong
Mayiwepi Jiti
Rocky Road
Reflecting on her own career, Jiti says that raising her voice and getting heard as an entrepreneur was not easy. “I faced a lot of challenges when I took over running of the family farm when my husband suddenly passed away in 2004. I had small children to look after, I had over 300 farm workers who looked up to me and I had a farm to work on to make a living and run as a professional enterprise,” she says.
“Banks shunned me because of gender, and they looked down upon women as they had a feeling that as a woman, I was a nonperformer, and they did not know that behind every successful man there is a woman. Culturally in Zimbabwe, women tend to submit themselves to men and believe that it is the man who should initiate first before they follow. While men are discussing important issues, whether business or family issues, women are supposed to keep quiet or sometimes act behind the scenes. In most cases, the women are the brains, with brilliant and intelligent ideas. They are good at implementation and [are] naturally hard workers,” says Jiti.
A primary schoolteacher by training, Jiti married a man with a farming background. Together, they bought a farm in 1996 and set up the respective infrastructure, which involved clearing land, making bricks, constructing tobacco barns and preparing the land to plant a crop. Three years later, when Jiti was pregnant with twins, her husband persuaded her to resign from her job. Instead of teaching, Jiti became involved in farm work. “It was like he fully prepared me to eventually take over farming after him,” she says.
With both coming from farming backgrounds and having a lot of passion for agriculture, it was not difficult for her to proceed after her husband died in a car accident. At that time, they had just started construction of a dam for irrigation. The banks immediately stopped funding the project. “They demanded that I pay back what had been borrowed simply because they thought [that] as a woman, I was never going to finish off the project. Obviously, they judged me based on gender.”
However, Jiti managed to construct the dam to 75 percent of its intended capacity without bank funding. “I achieved this through planting and selling cash crops like potatoes, cabbages, tomatoes, with the assistance of well-trained supervisors whom I had groomed with the assistance of my husband.”
Today, Jiti grows tobacco on 80 hectares, whereas 50 hectares each are dedicated to maize and wheat, respectively. Most of the workers she employs are housed on the farm in self-contained houses with clean water and electricity.

While women are accepted as equal partners when they are selling leaf on the sales floors, they remain disadvantaged in other parts of the tobacco value chain. (Photo: Taco Tuinstra)
Successful Exporter
The start was tough. “Running the farm and the family was a huge responsibility which needed sobering up and tireless hard working. I had very limited time to rest as I had a huge responsibility. My two children were in junior primary school when my husband passed on. Most family members looked down upon my abilities as a single mother and businesswoman. But in less than two seasons, I proved both the financiers and family members wrong. I pulled through and became a very successful and prominent farmer as I managed to not only look after extended family members, but I also successfully joined the male and white dominated export field of fruits and vegetables to Europe and won an international gold award on production of quality products.” Due to racial discrimination, black farmers were not allowed to venture into export, she adds. As information was not easily and readily accessible, it wasn’t an attractive field of business for them either.
While more women are now in leadership positions, Zimbabwean farming is still dominated by men, according to Jiti. Women, she says, are often told to give their ideas to their husbands, who then take the credit. What’s more, female entrepreneurs also suffer the challenge of defying social expectations. “On the one hand, men tend to believe that to be successful in any business, there is a need to be competitive, aggressive and sometimes harsh. On the other hand, some successful women out there are mostly true to themselves and generally confident with their work,” says Jiti. “The societal perspective needs to change, and women must be embraced for who they are. They ought to be given a chance to display their wings on their own and not to be made to compete with men, who are born inherently different.”
Another issue is that most women have no access to funding. “In my opinion, if there are government grants, they must benefit women equally as much as they benefit most men,” says Jiti. “Other challenges need to be addressed as well. Examples are corruption, the bottleneck system on the certification on export permits and the middlemen in the tobacco industry who buy farmers’ produce at low prices and resell it at huge markups.
Contract farming, she believes, plays a positive role to most women farmers in Zimbabwe, where tobacco is typically sold in auctions. Under the current tobacco-selling regulations, farmers receive 60 percent of their tobacco payments in U.S. dollars and the remainder in Zimbabwe dollars.
Farm inputs are priced in U.S. dollars, and the Zimbabwean dollar has been subject to considerable inflation. “In a country like Zimbabwe, which is believed to have many small-scale farmers who are unable to participate in intensive agricultural production and lucrative export markets, contract farming will be the way to go, at least for now,” says Jiti. “It is the women who suffer most as they have restricted access to loan facilities, insurance, are treated unfairly, etc. Contract farming has been tried before and has proven to be useful to most women. I therefore believe that if it is upheld, it assists in the promotion of most women into intensive agricultural production.”
Representing Farmers’ Needs
Jiti founded the ZIFCU in 2018 after facing challenges with the existing farmers union, ZFCU, where she was vice president of administration. “ZCFU has been registered as a private company benefiting a few individuals and allocating themselves union properties that were acquired by farmers for the benefit of the union members,” Jiti says. “Being a woman founding the union would not be taken lightly by the men-dominated ZCFU as they think it is a direct challenge to their union and are scared of the competition as they are quite aware that women leaders deliver. As a result, they are trying by all means to tarnish my image by false accusations. It is so sad to note that ZCFU leadership has very little knowledge about agriculture, making them very passive leaders in as far as farming challenges is concerned.”
ZICFU provides support networks to farmers, ensuring they have access to resources and skills training and development for them to effectively utilize the land and market their produce. Groups represented by the association include subsistence agriculture, dairy farming, ranching, poultry and hobby farming. “ZICFU creates collaboration between farmers regardless of gender and other organizations, government and private partners to enable them to get the best out of their land,” Jiti explains.
Because irrigation equipment is expensive, small-scale to medium-scale Zimbabwean farmers tend to produce only rain-fed crops, which means low productivity. Most smaller farmers depend on government input handouts, which do not encourage them to expand production. When given these free packages, some farmers sell them to earn a small income for immediate household needs, eroding their credibility as borrowers in the eyes of the banks, according to Jiti. “The huge interest rates charged by the lenders are exorbitant and leave the farmer always in debt.”
To eliminate this—and to deal with the effects on precipitation of climate change—more dams must be constructed. “In addition, there is need for the Zimbabwean government to constantly give grants to the deserving citizens so that those that are into commercial farming can afford irrigation equipment and other inputs that assist them in their farming activity thereby also bringing foreign currency to Zimbabwe.
“I also believe that farmers need to be educated on the importance of evolving from subsistence to commercial agriculture. Commercial farming is highly rewarding, not only for the farmer but for the country at large,” Jiti says. Furthermore, she argues, people need to be educated on the importance of honoring the credit facilities. “This farming business can only succeed if we as farmers observe the need to be honest amongst ourselves and to the bank. The banking sector should charge reasonable interest rates for the sustainability of the farmers.”
It is at this juncture that ZICFU comes in as an organ that advocates for positive change in agriculture. “Our aims and objectives are centered on the evolution in the agriculture sector and being the voice of the women who are still downtrodden, who also need emancipation and empowerment. In addition, ZICFU educates farmers to stand on their feet instead of constantly relying only on government grants and to embrace the digital world. We therefore intend to bring more awareness campaigns to the Zimbabwean farmers from all spheres, which will assist them in moving from small-scale farming to commercial farming, which is also in line with the Zimbabwean economic blueprint.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

June 1, 2021
BAT: Vuse First Global Carbon Neutral Vape
Photo: BAT
Vuse has become the first global carbon neutral vape brand, according to BAT.
Vuse’s carbon neutrality has been delivered through carbon offset through reforestation projects. This includes a project in Uruguay to plant trees across 21,298 ha, where intensive cattle grazing has eroded soil and degraded land. As well as removing carbon dioxide and delivering better soil quality and biodiversity, the project will also result in increased availability and quality of employment opportunities, BAT noted.
The carbon neutrality of Vuse has been independently validated by Vertis based on product life cycle assessment data provided by an independent third party.
“Vuse becoming the first global carbon neutral vaping brand is a significant milestone,” said Kingsley Wheaton, chief marketing officer at BAT, in a statement. “It is testimony to BAT’s deep and long-standing commitment to being a responsible business and reducing our impact on the environment.”

Vuse becoming the first global carbon neutral vaping brand is testimony to BAT’s deep and long-standing commitment to being a responsible business and reducing our impact on the environment.”
Kingsley Wheaton, chief marketing officer, BAT
According to BAT, Vuse’s carbon neutrality status is part of a bigger ambition to become an environmentally sustainable vape brand with initiatives including:
Implementing a global device and pod collection scheme, with approximately 200,000 pods collected since the start of the pilot in 2020
Cutting single use plastics from packaging, which has saved 100 tons of plastic or the equivalent of 4 million plastic bottles in 2020
Transitioning from air to sea freight through changes to the distribution chain; Vuse aims to have 80 percent of international shipments transported by sea by the end of 2022
BAT says it is also reducing its carbon footprint by improving the energy efficiency of factories by upgrading to more efficient and lower impact equipment and by increasing the use of renewable energy through renewable energy purchases and on-site energy generation.
Today’s announcement by BAT coincides with the opening of the 100th Vuse Inspiration Store. Vuse Inspiration Stores are now operating in the U.K., Canada, Poland, Germany, South Africa and the U.S.
May 28, 2021
‘Reforestation Efforts Paying off in Brazil’

Photo: Joao Bispo
Tobacco industry reforestation efforts are paying off in southern Brazil, reports industry association SindiTabaco on National Atlantic Forest Day. Over the past 40 years, the tobacco sector has been working to eradicate the consumption of wood from native trees for curing. As a result, Forest cover on small-scale tobacco farms has now reached 24 percent, split into 15 percent native forests and 9 percent planted forests, according to data released by the Tobacco Growers’ Association of Brazil.
“For some decades now, the sector has been self-sufficient in fuel wood for curing tobacco, and thus native forests are preserved,” said SindiTabaco president Iro Schunke. “Incentives provided by the industries, which started in the mid-1970s, and the farmers’ willingness to plant eucalyptus trees played a fundamental role in the present enviable forest cover rates.”
In 2019, SindiTabaco partnered with the Federal University of Santa Maria to preserve forests while providing farmers with a sustainable source of energy.
“Tobacco is a centuries-old crop, and when it was brought to our region, it was strongly dependent on natural forests as a source of fuel wood, particularly because back then there were no planted forests,” says research coordinator Jorge Antonio de Farias.

For some decades now, the sector has been self-sufficient in fuel wood for curing tobacco, and thus native forests are preserved.
Iro Schunke, president, SindiTabaco
“Such common tree species as eucalyptus and acacia were rare at that time and little known, and, on the other hand, native forests were in great abundance. As of the 1970s, when the sector set targets to eradicate the consumption of wood from native trees, the farmers began to use wood from planted forests.
“Within this context, the target of the project consists in strengthening the conquests achieved so far—that is to say, the maintenance of the existing native forests—and at the same time come up with new elements and technologies capable of increasing the productivity rates of existing reforested plots whilst establishing new reforestation areas.
“To this end, we are creating reference units in tens of tobacco farms, testing new technologies and techniques, like spacing—distance between trees—new genetic materials and forest species that lead to higher productivity and energy performance.”
The results of the research will be shared through social media channels with tobacco farmers.
May 26, 2021
PMI Reports Progress Toward ‘End of Smoking’

Photo: krsmanovic
Philip Morris International on May 18 published its Integrated Report, a comprehensive overview of the company’s environmental, social and governance (ESG) performance and its progress toward its purpose of delivering a smoke-free future.
This includes its 2025 ambitions to have switched more than 40 million adult smokers to its smoke-free products, with half from non-OECD countries, and for smoke-free products to account for more than 50 percent of PMI’s total net revenues.
Further accelerating PMI’s transformation, this year, the company introduced two new 2025 ambitions linked to its business transformation metrics: for its smoke-free products to be available in 100 markets and for at least $1 billion in annual net revenues to come from “beyond nicotine” products. The Integrated Report also outlines case studies of early indications of PMI’s smoke-free products’ impacts in markets where such products have a meaningful presence.
“I present this report with pride in what we have already achieved in just five years, such as smoke-free products accounting for nearly one-quarter of our total net revenues in 2020 from essentially zero in 2015. I also have a deep recognition of the immense work ahead. Our new ambitious goals signal our confidence in our ability to monumentally change our company’s long-term future,” said Jacek Olczak, chief executive officer, in a statement.

I present this report with pride in what we have already achieved in just five years, such as smoke-free products accounting for nearly one-quarter of our total net revenues in 2020.
Jacek Olczak, CEO, PMI
“PMI is committed to serving as an agent of change and advocate of positive values. Innovation and inclusiveness are key to solving our challenges, whether related to tobacco harm reduction, environmental impact or social impact. We aim to create a sustainable future that benefits our company, shareholders, consumers and society.”
PMI’s Integrated Report 2020 demonstrates how the organization’s strategy, governance and performance create value. To showcase impact, the company reports on progress in various ESG areas, including toward achieving its ambitious 2025 Roadmap—a set of forward-looking targets pertaining to all Tier 1 topics from PMI’s sustainability materiality assessment.
The report highlights PMI’s most material sustainability topics, including the health impacts of its products—an aspect often not captured by external ESG assessments—and describes how the company is working toward researching, developing and commercializing scientifically substantiated better alternatives to continued smoking for those adults who do not quit. It also includes a new section on the company’s business transformation—which extends beyond changing the product—and an update on its business transformation metrics (BTMs).
The company’s BTMs are a set of bespoke key performance indicators introduced in 2016 to complement its ESG disclosure. These metrics allow stakeholders to transparently assess both the pace and scale of PMI’s transformation. Since then, based on stakeholder feedback, PMI has expanded the number of metrics to 28, with three new metrics introduced in this report.
The report also outlines the company’s belief that sustainability strategy is corporate strategy and that ESG issues are business issues. Reflecting this commitment to sustainability, the global sustainability team is now part of the finance function, reporting directly to the chief financial officer. In addition, executive compensation is now more clearly linked to ESG performance, complementing the strong product transformation incentives already in place.
“Sustainability stands at the core of PMI’s transformation and drives our development of strong ESG programs to mitigate the risks associated with our value chain while spurring innovation and growth to secure our success over the long term,” said Emmanuel Babeau, chief financial officer. “It is our firm belief that sustainability and corporate performance do not follow separate paths, and I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG is integrated into decision-making at all levels of our organization.”

I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG is integrated into decision-making at all levels of our organization.
Emmanuel Babeau, CFO, PMI
Acknowledging the unique and difficult challenges of the past year, PMI dedicated sections throughout its Integrated Report to showing how it addressed the impacts of the Covid-19 pandemic on its workers, business and value chain as well as instances where the pandemic directly affected the company’s sustainability efforts and the adjustments made in response.
“Despite the unprecedented challenges brought on by the global pandemic, we have not deviated from our efforts to show care, support those in our orbit and continue our quest to become a more sustainable company,” said Jennifer Motles, chief sustainability officer. “As we continue to transform, stakeholder engagement and constructive dialogue remain paramount to this evolution. In 2020, multi-stakeholder partnerships were key to the significant progress we made toward addressing many of our priority sustainability topics, ranging from protecting the health and safety of our employees to safeguarding the human rights of those impacted by our business and accelerating efforts to mitigate our impact on climate change throughout our value chain.”
The report was prepared following the Integrated Reporting framework and is in accordance with the Global Reporting Initiative Standards (core option).
It aligns with the principles and standards of the U.N. Global Compact and indicates contributions to the U.N. Sustainable Development Goals and corresponding targets.
PMI’s Integrated Report addresses some recommendations of the Task Force on Climate-related Financial Disclosures, with its environmental reporting to CDP covering most of the remainder.
Despite the unprecedented challenges brought on by the global pandemic, we have not deviated from our efforts to show care, support those in our orbit and continue our quest to become a more sustainable company.
Jennifer Motles, chief sustainability officer, PMI
It also considers guidance from the Sustainability Accounting Standards Board (SASB). Furthermore, for the first time—and as a result of PMI’s business transformation—it cross-references most aspects of the SASB standards defined for technology and communications, more concretely the Hardware Standard, and it also describes alignment with some aspects of the standards developed for the healthcare industry, specifically the medical equipment and supplies standard.
Finally, the content of PMI’s Integrated Report 2020 is mapped against the 21 metrics defined by the International Business Council/World Economic Forum’s “Measuring Stakeholder Capitalism: Toward Common Metrics and Consistent Reporting of Sustainable Value Creation” white paper to further reflect the importance of stakeholders, as per PMI’s statement of purpose.
On June 2, PMI will host an ESG-focused webcast during which the company will offer additional insight into how integrating sustainability across its business creates value for its shareholders and stakeholders. PMI will also publish in the coming week an ESG Highlights document, which will provide a more data-focused executive summary of the Integrated Report and will be made available on PMI.com/investor-relations.
Stakeholders can download the full Integrated Report 2020 as well as indexes mapping the company’s disclosures to internationally recognized frameworks on PMI.com/sustainability, including details about the company’s 16 Tier 2 sustainability topics.
May 19, 2021
Forestry Officials Sound Alarm in Zimbabwe

Photo: Taco Tuinstra
Zimbabwean forestry officials have raised alarms about the rate at which trees are being cut for tobacco curing, charcoal production and other purposes, reports The Herald. The country loses more than 262,000 hectares per year due to farming activities and fires, among other reasons.
“Within the next 10 years, we are likely to see a huge decrease in tobacco farming if alternatives are not found,” said Forestry Commission Director-General Abednigo Marufu. “We want to encourage chiefs to encourage sustainable tobacco farming.”
Because Zimbabwe’s native trees take many years to replenish, Marufu called on tobacco farmers to plant gum trees, which grow quickly and require little water.
“Farmers should embrace the species of gum trees that we have introduced in other parts of the country, except for Manicaland,” he said. “These have been under test since 1966, and they don’t require a lot of water.”
Marufu also urged growers to consider alternative energy sources, such as biogas.
The Forestry Commission encourages the use of trees that enrich the soil while lamenting the involvement of political figures in the illegal charcoal trade.
Every year, the Ministry of Finance and Economic Development releases funds to the Forestry Commission for tree planting. The money is deducted from each farmer’s total sale of tobacco for the Afforestation Fund, which is taken through the Tobacco Industry and Marketing Board.
Nurseries of trees have been set up in provinces and have produced over 6.8 million trees that are availed to tobacco farmers for free.

Zimbabwe’s Sustainable Afforestation Association aims to create sustainable wood sources, conserve indigenous forests and research alternative fuels. (Also see “Back in Business,” TR June 2018.)
May 18, 2021
BAT Recognized as a Climate Leader

Photo: BAT
BAT has been named as a 2021 Climate Leader by the Financial Times in an inaugural European ranking.
FT Europe Climate Leaders 2021 recognizes the top 300 of more than 4,000 companies across Europe that achieved the highest reduction in core greenhouse gas emissions in relation to revenues for the period between 2014 and 2019.
BAT’s climate targets include being carbon neutral in its own operations by 2030. In 2020, BAT achieved a 30.9 percent reduction in emissions from its operations, contributing to a 37.4 percent reduction against a 2017 baseline. In March this year, BAT announced a further ambition to be carbon neutral across its value chain by 2050, representing around 90 percent of its total carbon footprint.

This recognition by the Financial Times is a positive signal that we’re heading in the right direction.
Kingsley Wheaton, CMO, BAT
“We are very pleased to be named by the Financial Times as one of the companies leading the charge against climate impact,” said Kingsley Wheaton, BAT’s chief marketing officer, in a statement. “BAT is deeply committed to being a responsible business and reducing our impact on the environment.
“Last year, we said we’d achieve carbon neutrality for our own emissions by 2030, and we’re making good progress toward this target. In addition, considering the urgent global challenge of climate change, earlier this year, we committed to carbon neutrality across our value chain by 2050. This recognition by the Financial Times is a positive signal that we’re heading in the right direction.”
May 18, 2021
KT&G Aims to Become Carbon Neutral by 2050

KT&G CEO Bok-In Baek
KT&G has declared its goal of becoming carbon neutral by 2050 by reducing its greenhouse gas emissions.
First, KT&G is planning to reduce the greenhouse gas emissions by 20 percent by 2030 compared to the levels in 2020. To achieve carbon neutrality, KT&G plans to expand its scope of environmental responsibility not only to the workplace, but also to the entire chain, from raw materials to production and sales.
It will promote the expansion of renewable energy, improvement of energy efficiency and support energy efficiency improvement of leaf tobacco farms. In the mid-term to long-term, KT&G plans to engage in external greenhouse gas reduction projects in connection with domestic and overseas value chains and put forth effort to secure Certificated Emissions Reduction.
KT&G has also decided to reduce water consumption by 20 percent by 2030 compared to the levels in 2020 and to achieve 90 percent in waste recycling rate by 2030, accelerating the transition of the circular economy.
Meanwhile, KT&G is speeding up its environment, society and governance (ESG) ambitions by implementing environmental management that values a sustainable future. Last month, KT&G announced a plan to reduce greenhouse gases by more than 20,000 tons by converting business vehicles into eco-friendly vehicles, such as electric vehicles, by 2030.
“We have established a mid-[term] to long-term environmental management strategies, including carbon neutral, to recognize the magnitude of the climate change problem and to participate in global efforts to respond to the crisis,” said a KT&G spokesperson in a statement. “We will continue to actively participate in solving social and environmental issues and make additional efforts to establish an ESG management system that meets the global standards.”
May 17, 2021
PMI Recognized for ESG Strategy

Photo: patpitchaya
S&P Global Ratings’ ESG Evaluation report has assessed Philip Morris International’s (PMI) approach to environmental, social and governance (ESG) topics and confirmed that PMI has positively differentiated itself within the tobacco sector.
The S&P Global Ratings ESG evaluation assesses a company’s ESG strategy and ability to prepare for potential future risks and opportunities and provides a forward-looking, long-term opinion of a company’s readiness for disruptive ESG risks and opportunities.
It provides an overall score that allows comparison with other entities globally, including sector peers, and consists of a combined sector/region score, an entity-specific score and a preparedness score.
Based on entity-specific scores—designed to indicate how a company is actively and effectively managing its exposure to ESG risks and opportunities compared with its industry peers—PMI is placed third in the E-entity specific score, eighth in the S-entity specific score and 15th in the G-entity specific score among all 25 current publicly available ESG evaluations.
“I am proud that our dedication to sustainability, which is fundamental to the transformation of our company, has been recognized externally by S&P Global Ratings,” said Emmanuel Babeau, chief financial officer at PMI, in a statement.
“It is our firm belief that sustainability and business performance do not follow separate paths—they are fully interrelated and mutually reinforcing and should be organized and presented to all stakeholders, including shareholders, in an integrated way.”

Sustainability and business performance do not follow separate paths—they are fully interrelated and mutually reinforcing.
Emmanuel Babeau, CFO, PMI
In February 2021, PMI announced an increased ambition for the contribution of its smoke-free products to total net revenues to more than 50 percent in 2025, meaning that in five years, cigarettes would account for less than half of PMI’s total net revenues.
The company also stated its aspiration to commercialize its smoke-free products in a total of 100 markets by the end of 2025, up from 64 at the end of 2020. Additionally, PMI announced an aspirational target of at least $1 billion in annual net revenues from “beyond nicotine” products by 2025.
This new aspiration reflects additional growth potential and further acceleration of the company’s transformation, leveraging PMI’s significant capabilities within life sciences, device technology, consumer expertise and more.
“The company has made significant R&D investments, by sector standards, and is upskilling its management team to prepare for this transition. In our view, the company is well placed to meet its ambitions,” S&P Global Ratings said.
“We believe PMI is adequately prepared for future disruptions, reflecting its significant investments in [reduced-risk products (RRPs)], which smokers seem to accept as an alternative to cigarettes, and its solid track record of strategic execution despite headwinds.”
S&P also recognized PMI’s “approach to customer engagement—unique among its peers—which educates consumers directly about the health consequences of sustained tobacco use and supports low-income customers in making the transition from cigarettes to reduced-risk products.”
Later this month, PMI will release its 2020 Integrated Report, which details how the organization’s strategy, governance, performance and prospects create value over the short, medium and long term.
May 17, 2021
This is a Man’s World

Photos courtesy of the Foundation for a Smoke-Free World
Bridging the gender gap will strengthen Malawi’s economy.
By Stefanie Rossel
Imagine you own a piece of land, but you are not free to decide what to grow on it. You do most of the farm work in your family, but you earn only a fraction of the income of your male partner. You lack basic reading and writing skills, and you cannot easily get a loan with the bank because you do not own assets that can be used as collateral. That’s the situation for many women in Malawi’s tobacco sector.
Women represent a little more than half of Malawi’s estimated 21.2 million people, but they provide more than 70 percent of agricultural labor in the country. Malawi is one of the poorest countries in the world, with a young, fast-growing population. Its economy is heavily based on agriculture, which contributes 90 percent of exports and represents 22 percent of gross domestic product (GDP). Productivity is below 40 percent of potential because there is limited access to modern technologies such as mechanization and irrigation as well as to competitive financing and competitive structured markets.
With tobacco accounting for 54 percent of merchandise exports in 2019 and about 15 percent of GDP according to Trendeconomy.com, landlocked Malawi is one of the world’s most tobacco-dependent economies. It is also the 11th largest tobacco producing country. Ninety-five percent of the tobacco grown in Malawi is burley, supplied mostly by smallholder farmers (80 percent). Of these, less than 10 percent are female. Tobacco marketing is managed through two systems—auction (20 percent) and contract farming (80 percent).
According to the United Nations, poverty is a gendered phenomenon in Malawi, with female-headed households disproportionately represented in the lowest quartile of income distribution. Most Malawian women working in tobacco cultivation do not own farms but work as farm laborers. “Tobacco is predominantly a man’s crop,” says Candida Nakhumwa, country director for Malawi at the Foundation for a Smoke-Free World (FSFW). “The man is the tobacco farmer. The woman and other family members just support him. It’s the man who is on the payroll, but in terms of the work on the ground, you find that the bulk of that is still performed by women. They are involved in terms of land preparation, planting, weeding and reaping of the tobacco or grading when they’ve harvested.”
In addition to their farm tasks, women spend time on childcare and household chores, such as preparing food, fetching water and collecting fuelwood. “While women are actively involved at every stage of tobacco production, they are rarely present at the marketing stage. Tobacco marketing is mainly handled by men,” Nakhumwa says. “As such, proceeds from tobacco cultivation and decisions on use of this money are mainly in the hands of the man. Even among the roughly 10 percent of women who are tobacco smallholder farmers themselves, you can still observe that when it comes to marketing of the crop, they still look for a male figure to support them.”
Because tobacco is a labor-intensive crop and most of the labor is supplied by the family members, farmers in some parts of Malawi marry a second or third wife to have more support. “The more family labor you have, the more advantage you have,” Nakhumwa points out. For the most part, education levels among female smallholder farmers are low, and that makes them more dependent on the husband, who is the bread winner.

Backbone of Agriculture
Women take on a significant part of the farm work in most tobacco-growing countries. They represent about 43 percent of the global agricultural labor force and almost 50 percent in Sub-Saharan Africa, according to a 2011 U.N. Food and Agriculture report. A 2016 study commissioned by the Public Health Institute in Oakland, California, USA, looked at the role of women in tobacco farming in China, Kenya and Tanzania. In China, the world’s largest leaf-producing country, women spend 30 percent to 50 percent of their time in tobacco farming, according to the study. This amounts to six hours to eight hours per day on average and more than 16 hours during the harvesting season. Their husbands spend only 30 percent of their time in tobacco farming.
What’s more, female seasonal workers earned less than men, the study found. In Tanzania and Kenya, both women and men spend about 40 percent to 50 percent of their time on tobacco cultivation. Awareness of the health risks of tobacco cultivation was low in all three countries, and pregnant women were often working in the field.
In contrast to their African counterparts, however, most female tobacco farmers in China were decision-makers or joint decision-makers regarding farming activities and finances. Almost 55 percent of Chinese respondents, the study states, were the sole signatory to the contract with tobacco companies, with access to bank accounts and the payment from the tobacco companies. In Tanzania and Kenya, the situation was very different, according to the study authors.

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Substantial Disparity
In Malawi, women are mostly seasonal workers providing their labor to other farms. “These women may even own a small piece of land where they can grow other crops, such as maize, groundnuts or soybeans. But if they spend more time offering themselves as casual laborers, it compromises the amount of time they can invest on their own farms,” Says Nakhumwa. “Hence, these farmers tend to be food-insecure. They are not able to produce food that will last them from one harvest to another. So the food security dynamics for women are still a challenge.”
With an average of 6.6 family members, tobacco farmer households are larger than the national average, which stands at four family members, and this also influences the food availability of farmers’ households. Malawian farmers own far less land than their counterparts in Zambia and Mozambique. Coupled with low productivity among smallholders, tobacco cultivation does not guarantee a profit if the crop is grown on less than 0.75 ha. “This is not economically viable. The land women own is even smaller—that’s why they go out and offer their labor to other farmers,” says Nakhumwa.
Most of the smallholder land in Malawi is inherited. There are two types of inheritance. In the central region and southern regions, a matrilineal society prevails, so the inheritance is through the mother. The northern region has a patrilineal system, where inheritance is through the father. However, in the central region—the hub of tobacco growing—the married woman relocates to stay at the husband’s home. “In this situation, the woman cultivates land that belongs to her husband,” Nakhumwa says. “Therefore, these women do not control land nor other productive assets. In terms of decisions on how to make use of her land, she will still be looking up to a male figure. This could be her husband, but in most cases, it will be her uncle who is considered the owner of the clan.”
The fact that the women don’t control the land ends up affecting issues such as whether they are able to access financing from a commercial bank. “If you don’t own the land, it means you cannot present it as a collateral to access finance,” says Nakhumwa. “This also limits women in terms of which part of the value chain they participate in. Tobacco is a high-input crop, so if you cannot get access to financing for inputs, then it’s no longer your preferred crop, whereas for a man, because they are controlling the land, they can easily go to the bank and get a loan.”
Men are also the ones who negotiate the contracts with leaf companies because they benefit from larger land ownership than women. To be contracted, farmers need to demonstrate that they own enough land to be able to rotate tobacco with three other crops.
The pattern of women passing on responsibility to a male figure is deeply rooted. Families will dedicate their limited resources to the education of their male child, as he is expected to take on more responsibility over the woman he will marry, while the girl child is expected to get married and be taken care of by her husband. “This is also linked to a lot of school dropouts and early marriages among girls,” says Nakhumwa. “Around 10 percent of girls are married before the age of 15. Fifteen percent are married before the age of 18.” Laws against child marriages are in place, but enforcement is weak.

Long Way to Go
On the bright side, recognition of the hazards involved in tobacco growing, such as green leaf sickness, is improving, according to Nakhumwa. More leaf companies are working to create awareness about farm safety. “In a country where more than 80 percent of tobacco is contracted, more than 80 percent of farmers should get the message,” she says. “However, mostly male farmers take part in these awareness creation meetings, so it’s up to them to inform the women at home, but it’s not the extent to which this happens.”
While many leaf companies supply their farmers with protective gear, this is helpful only if enough equipment is provided for all farm workers rather than just for the men, Nakhumwa notes. “More needs to be done for women to understand the dangers of tobacco cultivation,” she says. Yet even if women know about the risks, they will likely continue working in tobacco fields because they have few alternatives, according to Nakhumwa.
Gender equality is one of the 17 U.N. Sustainable Development Goals (SDGs) supposed to be reached by 2030, which seems like an extremely ambitious target. Much work is needed to improve the situation of women working in Malawi’s tobacco sector. “The key priority is to provide women with increased opportunities and access to quality education,” says Nakhumwa. “If they attended school longer, their decisions would be different. They’d have access to other opportunities. Furthermore, we need to empower and enable women to have access and control over factors of production such as land and competitively priced finance, among others, to help them engage effectively in agriculture. If this happens, they can be involved in production and marketing of commodities other than tobacco.
“The third area is that women need to be empowered to be involved in nonfarm activities and in decision-making to reap the benefits of the labor they are putting in and get control over the money they have made. I think education and empowerment will help us close this gender gap and also deal with issues of population in which women play a big role.”
To close the gender gap, she continues, the men need to be taken along. “If this capacity building targets both the man and the woman to help them understand how much more they can do if they work as a unit, they might embrace that. I think men will be able to support women to be better off. In some communities, men and women are supported to have a joint vision for their families—if they don’t do that, you see that they are pulling in different directions. The man needs to understand that a woman is a critical player in this field and that he cannot leave her behind.”

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Diversification is Key
Elected in June 2020, Malawi’s new government is committed to reducing the country’s dependence on tobacco. Its “Malawi Vision 2063” plan aims to turn Malawi into a wealthy, self-reliant nation. The country is also a signatory to the African Continental Free Trade Area Agreement (AfCFTA), which is estimated to boost intra-African trade by 52 percent by 2022.
“For Malawi to be successful in this, our agricultural exports need to be competitive and prioritize value addition,” Nakhumwa explains. “Otherwise, we may be the losers and fail to exploit the 1.3 billion population AfCFTA market. Further, the total value of food imports in Malawi has more than doubled between 1998 and 2020. These imports mostly consist of products from crops that the country produces itself, which is cereals and oil seeds. This demonstrates the readily available domestic market and points to some of the things we have to focus on as part of an import substitution strategy.”
To support the country in its transition toward a more sustainable, diverse agriculture sector, the FSFW awarded a grant to a consortium led by Land O’Lakes Venture 37 to set up and manage the Centre for Agricultural Transformation (CAT) in Malawi in 2019. The CAT addresses an objective of Article 17 of the Framework Convention on Tobacco Control to assist tobacco farmers in the development of alternative livelihoods. The CAT includes several initiatives such as the science, technology, innovation (STI) program and business and incubation cohort (BIC), both of which will help smallholder Malawian farmers make economically viable, data-driven decisions for diversifying their livelihoods. The center facilitates the development of new technologies, partnerships and income opportunities to help farmers achieve greater economic success in the coming years, with a special focus on women and youth. Numerous programs under the CAT are dedicated to encouraging women and youths to engage in agriculture, link up farmers to markets to sell their produce at competitive prices or training them on vital entrepreneurship.
In addition, through a policy program led by Michigan State University, FSFW is supporting targeted policy reforms while also working closely with Malawi’s National Planning Committee. Michigan State University has also supported the establishment of the Malawi Agriculture Policy Advancement and Transformation Agenda Institute. Institutions play an important role in helping women to develop a vision of what they want to do and where they want to be. Policies have been aligned accordingly, Nakhumwa says. “What we have to do as development partners is to ensure that we generate evidence that supports these policies so that governments recognize that if they change certain aspects in existing policies, women will benefit. There is need for legal review to ensure that all policy and legal instruments are tailor-made to support equality between men and women.”
FSFW is also contributing toward human capital development efforts to strengthen the capacity of researchers and professionals, both men and women, in high-priority fields that will help the country transform its agricultural sector. Scholarships have also been awarded to candidates based in Malawi who are pursuing their master’s degrees and doctoral degrees and advancing their postdoctoral research in agriculture, business, data science, economics, ecology/environment and engineering. This effort is in addition to institutional capacity building and business incubation support offered through the CAT and policy programs.
Nakhumwa says that diversification will be good because other commodities will allow women to participate in production and marketing. However, she notes, women will benefit from diversification only if certain conditions are met. “To support farmers, we need to enhance access to improved technologies for women so that they can experience increased productivity in production of the crops or livestock they will be producing. If they continue to produce at low productivity, the women will still fall behind.
“We also need to help the woman to access competitively priced finance so that when she goes to the farm, she will be able to invest the required amounts of inputs and produce the volumes and quality that she can take to the market. Through the STI and BIC pillars of the CAT, tailor-made programs have been launched for women to learn about and access improved agricultural technologies and capital as well as develop necessary technical and entrepreneurship skills to grow their businesses. Focus on women and youth is at both the enterprise level—women and youth-led agri-enterprises—and the business model level, with emphasis on women and youth inclusion.”
Other important factors include investing in labor-saving technologies as well as ensuring that women get access to structured and competitive markets as well as control over land. Nakhumwa emphasizes that to benefit from diversification, the woman needs to be empowered to upgrade in the value chain.
“Instead of being laborers only, women need to be supported to own strategic factors of production and begin to add value to what they are producing to maximize the value they earn from their efforts. I also believe that when these women farmers are organized in groups, they can benefit from economies of scale. They can easily be taught new technologies and management practices. Finally, we need to deal with cultural barriers that exist so that even in these new commodities, the woman is treated like an equally important partner.”

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Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

May 1, 2021