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Environmental Sustainability

G4-EN3
Energy consumption within the organization

G4-EN6
Reduction of energy consumption

G4-EN15
Direct GHG emissions (Scope 1)

G4-EN16
Energy indirect GHG emissions (Scope 2)

G4-EN19
Reduction of GHG emissions

G4-EN3
G4-EN6
G4-EN15
G4-EN16
G4-EN19

Greenhouse Gas & Energy

We established GHG and energy goals guided by industry benchmarking, along with the results of the third-party environmental materiality assessment. These goals are outlined below:

GOALS
  • Stabilize GHG emissions by 2025 to the 2014 level;
  • Reduce GHG intensity (tons/$million revenue) by 20% by 2020 against 2014 baseline; and
  • Reduce energy intensity (GJ/$million revenue) by 25% by 2020 against 2014 baseline.

While these goals apply to Scope 1 and Scope 2 emissions, we also track and continue to work to reduce Scope 3 emissions, internally by making tools available to reduce the necessity for employee travel and increasing use of telecommunications, and externally by working with our supply chain partners.

We have reported to CDP since 2007 and are honored to be on the CDP Climate A List, receiving the highest possible score for our CDP Climate Change response (formerly known as the Carbon Disclosure Project Investor Response). We are proud to receive a score indicative of our subsidiaries’ continued efforts to address climate change and climate change transparency. We have reported on our subsidiaries’ progress toward reducing greenhouse gas and energy use to CDP since 2007 and expanded our submission to include Scope 3 emissions in 2015.

We are proud to receive a score indicative of our subsidiaries’ continued efforts to address climate change and climate change transparency.

TOTAL DIRECT & INDIRECT GREENHOUSE GAS EMISSIONS

309,614
294,252
274,495
276,554
243,266
247,529
238,711
2010 2011 2012 2013 2014* 2015* 2016
CO2 Equivalent (Metric Tonnes)

*2014–2016 data reflect updated emission factors, including AR4 (2007) GHG Global Warming Potentials

TOTAL ENERGY USE

3,531,349
2,181,993
1,349,356
3,458,457
2,185,841
1,272,616
3,243,564
2,063,141
1,180,423
3,276,133
2,096,237
1,179,896
3,183,253
2,018,983
1,164,270
3,252,678
2,067,678
1,185,000
3,264,783
2,057,606
1,207,177
2010 2011 2012 2013 2014 2015 2016
Direct Energy Use (Gigajoules)      
Indirect Energy Use (Gigajoules)


Each operating company is responsible for identifying and executing its own strategy to meet greenhouse gas and energy reduction goals. Through the environmental materiality assessment results, operating companies are equipped with specific opportunities and able to prioritize effective reduction strategies. 

R.J. Reynolds

In 2016, R.J. Reynolds conducted lighting surveys to determine where to make lighting upgrades in three manufacturing facilities. The surveys identified areas for luminaire utilization improvements, as well as areas where luminaires should be changed to modern LED. As a result of these surveys, R.J Reynolds reduced energy use by more than 1.3 million kilowatt hours, reducing energy costs by almost $57,000. The upgrade to new LED luminaires in other manufacturing areas reduced energy usage by nearly 722,000 kilowatt hours, saving more than $34,000 each year in energy costs. Lastly, nearly 945 modern LED fixtures were installed during facility renovations; further reducing energy usage and the universal waste associated with fluorescent lamp maintenance. 

Chillers, which are used to cool machinery, can sometimes be the single biggest users of electricity in facilities. In 2016, R.J. Reynolds evaluated and received internal approval to replace several older chillers with new high-efficiency chillers containing R123 refrigerant, which conforms to a higher ASHRAE standard for operational efficiency. Instead of selling the older R11 refrigerant, R.J. Reynolds Tobacco Company has decided to send the R11 refrigerant to a licensed third-party contractor for destruction, completely removing greenhouse gas emissions from entering the environment. Once fully implemented in 2017, the total RAI greenhouse gas emissions should be reduced by approximately 6 percent.

Santa Fe Natural Tobacco Company

SFNTC has purchased wind power for 100 percent of its facilities since 2009, making it the only tobacco company to be awarded membership in the U.S. EPA’s Green Power Leadership Club. SFNTC operations have been certified ISO 14064-1 as Carbon Neutral since 2011 and its manufacturing facility’s Energy Management System was certified under the ISO 50001 standard in 2014. SFNTC was audited and recertified for both ISO 14064-1 and ISO 50001 in 2016. SFNTC uses metering technology on much of its machinery, enabling the quick identification and repair of faulty equipment. This year, SFNTC added additional monitoring equipment to identify future energy reduction projects. SFNTC’s manufacturing facility underwent a compressed air analysis and installed a master controller for the compressor system, reducing compressed air energy by 10 percent. SFNTC explored several additional energy reduction projects, including adding anaerobic digestion to create energy from the waste steam and purchasing hydrogen fuel cell fork lifts. Read more about SFNTC’s sustainability initiatives here.

American Snuff Company

ASC continued reducing energy use at its three manufacturing facilities throughout 2016. ASC’s Memphis, Tenn., facility installed lighting sensors and controls to increase lighting efficiency, and increased loose-leaf pallets from 24 to 26 per truck, reducing miles driven on outbound shipments. At ASC’s facility in Clarksville, Tenn., a compressed air project resulted in approximately $30,000 in energy savings. Taylor Brothers, ASC’s manufacturing facility in Winston-Salem, N.C., created an energy conservation team, which implemented several projects over the course of the year:

  • Reduced operating hours of an air compressor, saving 333,000 kilowatts of energy and more than $23,000 per year;
  • Removed three non-essential processes and installed automatic air cutoff devices on machinery; and
  • Adopted a program to update motor efficiency throughout manufacturing facilities.

Taylor Brothers also improved compressed air system efficiency, reducing energy use by 5.5 percent, and improved boiler operating efficiency, resulting in a 25 percent reduction in natural gas consumption and decreased water use. 

Following the 2015 Lorillard acquisition, 2016 total energy use increased over 2015 due to increased production volume and the installation of additional process equipment. However, total GHG emissions fell by nearly 4 percent. This is partially due to our operating companies’ emissions reduction activities, as well as a change in fuel types. Our 2016 GHG intensity is down almost 34 percent from 2014, exceeding our 2020 goal. Our 2016 energy intensity is down almost 31 percent from 2014, exceeding our 2020 goal.