RAI’s operating companies work closely with suppliers to deliver high-quality, innovative products to adult tobacco consumers. To do so, RAI’s operating companies partner with suppliers to innovate and drive capacity and to minimize environmental and other adverse impacts throughout the supply chain.
RAI’s impact on society and the environment is driven not only by the behavior of RAI and its subsidiaries, but also by the behavior of their suppliers. RAI's operating subsidiaries hold suppliers to the same high standards to which they hold themselves. Each supplier is expected to have systems and processes in place to ensure compliance with applicable laws and regulations, and to go beyond compliance in managing environmental, social and governance (ESG) practices. RAI's operating companies encourage responsible and sustainable practices in the supply chain through a variety of mechanisms.
RAI's operating companies source from numerous suppliers covering a range of categories, including leaf growing and processing; manufacturing support; marketing; and distribution. In addition to tobacco leaf, other suppliers include:
- Direct materials suppliers;
- Indirect materials and services suppliers;
- Maintenance, repair and operations; and
- Logistics and finished goods suppliers.
While we source from suppliers around the world, almost 95 percent of our non-leaf suppliers are located in the United States.
In 2015, we completed a comprehensive third-party environmental materiality assessment to determine where our largest environmental impacts exist. Not surprisingly, we found the significant majority of our environmental impacts occur in the supply chain and with our contracted tobacco growers and suppliers. Read more about our approach to responsible agriculture.
Goals & Leadership
RAI's operating companies strive to minimize the negative environmental and other impacts in the supply chain. We work with suppliers to ensure they comply with applicable laws and adhere to responsible employment practices. This collaborative effort helps us achieve our mutual sustainability objectives.
The executive vice president of operations for R.J. Reynolds Tobacco Company is ultimately responsible for supply chain management and goals. In addition, the executive vice president of corporate sustainability and commercial integrity for RAIS provides oversight on sustainability in the supply chain. The R.J. Reynolds procurement department has service agreements with each RAI operating company, enabling an integrated, comprehensive supply chain management system. Executives from procurement, along with corporate sustainability and commercial equity, collaborate to develop, coordinate and execute programs to achieve company-wide goals and targets, including:
- Actively engaging with our supply chain partners and sharing best practices to identify and reduce environmental impacts;
- Broadening our companies’ engagement with diverse suppliers; and
- Achieving an 8 to 10 percent spend rate with certified diverse suppliers by 2020.
In 2016, RAI created the Upstream Team of the Corporate Sustainability Committee, composed of individuals from throughout operations, including both procurement and leaf. In addition to the Upstream Team, other sub-teams of the Corporate Sustainability Committee have been formed and are responsible for projects such as incorporating environmental and social sustainability initiatives into RAI and its operating companies’ supply chains. An example of these projects includes participating in the U.S. Environmental Protection Agency’s SmartWay program.
RAI and its subsidiaries offer a Supplier Guide, which outlines the code of conduct with which suppliers must comply. This guide outlines requirements and expectations for which suppliers are screened during the onboarding process, and against which we conduct periodic audits. Our supplier requirements and expectations cover a range of environmental, social and governance factors (ESG), including:
Programs & Priorities
RAI is proud of the efforts to promote responsibility in its operating companies’ supply chains. Suppliers are truly our partners — working together to identify innovative opportunities, best practices and policies.