Reynolds American and its subsidiaries are pleased to present this view of their businesses through the lens of sustainability. These are the processes and initiatives, the investments in people and brands, that drive sustainable success and responsibility.
You will see that 2016 was another milestone year for the business. Our companies delivered excellent operating performance, and RAI delivered a total return of 26% to its shareholders while making continued progress down the path of transforming the company and the industry.
- We formed RAI Innovations Company, a new subsidiary focused on product development, innovation and commercialization of next-generation vapor and nicotine products that are at the fore of our efforts to reduce the harm associated with combustible tobacco products and provide alternative products for adult tobacco consumers.
- Our innovative “game changer” bonus program paid off and paid out, as we successfully completed the integration of Lorillard ahead of schedule thanks to the tireless efforts of our game changers—the employees of RAI and its subsidiaries.
- For me, the year was one of personal transformation as RAI announced succession plans, and I prepared to take the mantle of president and CEO on January 1, 2017, from Susan Cameron, who is now the non-executive chairman of the board.
- In October 2016, British American Tobacco proposed acquiring the remaining 57.8 percent of RAI it did not already own. The merger agreement, executed on January 17, 2017, envisions a truly global tobacco company with a portfolio of strong, growing brands and expanded capabilities in Next Generation Products and research and development. The combined strength of BAT and RAI will accelerate the transformation of the tobacco industry once the transaction, which remains subject to certain conditions, is closed.
2016 was also a year of continued focus on sustainability. Our 2016 Sustainability Report microsite details the many initiatives and processes, goals and metrics, that drove and measured sustainability and success at RAI and its subsidiaries. These include:
- Being included in the Dow Jones Sustainability World Index as the top-ranked tobacco company based on environmental, social and governance criteria;
- Significant reductions in the amount of greenhouse gases generated per dollar of revenue;
- Governance initiatives to embed sustainability more deeply in the culture of RAI and its subsidiaries; and
- A robust topic prioritization and disclosure initiative conducted following the Global Reporting Initiatives (GRI) G4 guidelines.
These are just a few of the ways we are continuing to transform tobacco by working to prevent youth tobacco usage, reducing the harm associated with tobacco products and operating with commercial integrity. As you read through our sustainability microsite, I hope you will agree that RAI and its subsidiaries have made enormous progress toward our Transforming Tobacco vision.
Debra Crew, president and CEO, Reynolds American Inc.