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Sustainability Homepage - Stakeholder Engagement & Materiality
Sustainability Approach

G4-18
Process for defining report content

G4-19
Material aspects identified in the process for defining report content

G4-20
Aspect Boundary-Internal

G4-21
Aspect Boundary-External

G4-23
Changes to scope and aspect boundary

G4-24
List of stakeholder groups engaged by the organization

G4-25
The basis for identification and selection of stakeholders with whom to engage

G4-26
Approach to stakeholder engagement

G4-27
Key topics and concerns raised through stakeholder engagement

G4-18
G4-19
G4-20
G4-21
G4-23
G4-24
G4-25
G4-26
G4-27

Stakeholder Engagement & Materiality

Stakeholders & Transforming Tobacco

RAI’s sustainability initiatives and commitment to transformation have evolved over time. In 2004, RAI launched a dialogue process to regularly and systematically engage with our stakeholders. Through this process, we aim to speak with and hear from representatives of stakeholder groups that are affected by, and affect our businesses. Led by a third- party engagement specialist, this ongoing dialogue process provides RAI and its subsidiaries with important insight into stakeholder perceptions, expectations and valuable feedback on our companies. The recurring topics discussed have become the catalyst for our ongoing sustainability strategy and led to the creation of the RAI Guiding Principles and Beliefs and our three pillars: Youth Tobacco Prevention, Tobacco Harm Reduction and Commercial Integrity, which collectively serve as the foundation of the Transforming Tobacco vision.

We believe stakeholder engagement is an important tool in identifying, prioritizing and managing sustainability issues and for this reason continue to regularly interact with our stakeholders. Key components of our engagement processes include:

Legislative and Regulatory Engagement: RAI Services staff and representatives regularly meet with legislators and regulatory agencies with oversight of our industry to discuss issues related to our businesses and the tobacco industry. We believe it is important that we share with these critical stakeholders significant commercial events that support our Transforming Tobacco vision, such as Youth Tobacco Prevention and Tobacco Harm Reduction, and we want to understand their positions on key issues. We also annually report corporate political contributions in the Governance section of RAI’s website.

Stakeholder Dialogues: To date, RAI companies have conducted 60 formal, third-party facilitated stakeholder engagements, including two in 2016. The conversations are focused on gaining insights into stakeholder perceptions and expectations and building strategic partnerships.

Association Engagement: Through our association memberships, we participate in public discussions about important industry and scientific issues. Currently, RAI and its subsidiaries participate in the following organizations, along with many other national, state and regional groups:

  • National Conference of State Legislatures (NCSL);
  • Carolina Farm Stewardship Association (CFSA) (life member);
  • National Association of Tobacco Outlets (NATO);
  • Farm Labor Practices Group (FLPG) (founding member);
  • National Association of Convenience Stores (NACS);
  • National Foundation for Women Legislators (NFWL); and
  • Cooperation Centre for Scientific Research Relative to Tobacco (CORESTA).
RAI and its companies will continue to evolve our vision to lead the industry as we engage with diverse stakeholder groups. Together, we are Transforming Tobacco.

MATERIALITY

In 2016, RAI and its subsidiaries conducted a robust materiality assessment to further our sustainability efforts. This process helped validate and prioritize the most significant environmental, social and governance (ESG) topics to our business.

We began by compiling a universe of potential ESG topics identified through the dialogue process, as well as through industry research and from peer benchmarking. Following this identification process, we collected feedback, evidence and recommendations from the stakeholders engaged through the dialogue process, and mapped this feedback to ESG topics. This direct engagement was supplemented by a review of stakeholders’ relevant publicly available information.


Stakeholder Group

Dialogues Conducted
by Third-Party

Review of Relevant
Public Information

Review of Relevant
Internal Information

Adult Tobacco Consumers

  

Addiction Specialists

  

Legislators

 

Public Health Officials

 

Investors

 

Tobacco Leaf Growers

 

Suppliers

 

Non-Governmental Organizations (NGOs)

  

Communities

  

Scientific Community

  

Media

  

Executives

  

Employees

  

 

With the help of a third-party firm, stakeholder feedback was scored to prioritize these topics and identify where they occur along our value chain.

 


Materiality Matrix

Youth Tobacco Prevention
RAI and its subsidiaries lead corporate, educational and legislative initiatives intended to accelerate the decline in youth tobacco use.
 
Click on a topic in the matrix to learn more.

Youth Tobacco Prevention

Eliminating the possession and use of tobacco products, including vapor products, by minors.
Primary Stakeholders Impacted
All stakeholders
Tobacco Harm Reduction
RAI and its subsidiaries drive product and thought innovation that embrace science-based evidence of the comparative health risks associated with tobacco use.
 
Click on a topic in the matrix to learn more.

Product Innovation

Research and development of next-generation tobacco products that present or may present less risk than cigarettes.
Primary Stakeholders Impacted
All stakeholders

Tobacco Harm Reduction

Reducing the risks faced by adult smokers by providing them with accurate information about, and instituting regulatory policies that reflect, the comparative risks between cigarettes and non-combustible tobacco products and nicotine replacement therapies.
Primary Stakeholders Impacted
All stakeholders
Commercial Integrity
RAI and its subsidiaries operate with integrity and strive to promote economic, environmental and social well-being across our value chain.
 
Click on a topic in the matrix to learn more.

Community Engagement

Enriching the communities in which we live and work through strategic philanthropy, volunteerism and economic development.
Primary Stakeholders Impacted
Internal, Communities, NGOs

Excise Taxes

Taxes on tobacco products, which often have negative, unintended consequences, such as escalating the amount of illicit tobacco trade and other illegal activity.
Primary Stakeholders Impacted
Adult Tobacco Consumers, Legislators, Public Health Officials, Growers, Suppliers, Communities

Governance, Codes of Conduct & Ethics

Ensuring policies and practices are in place to promote ethical behavior and lead the transformation of the tobacco industry.
Primary Stakeholders Impacted
All stakeholders

Illicit Trade

The illegal production, import, export, purchase, sale and possession of tobacco products.
Primary Stakeholders Impacted
Adult Tobacco Consumers, Legislators, Public Health Officials, Growers, Suppliers, Communities

Litter Prevention

Maintaining a clean and healthy environment through proper disposal of adult tobacco products.
Primary Stakeholders Impacted
Adult Tobacco Consumers, Legislators, Scientific Community, Communities

Operational Eco-Efficiency

Reducing the environmental impacts of RAI and its subsidiaries’ operations.
Primary Stakeholders Impacted
Internal, Suppliers, Growers, Communities

Responsible Agriculture

Promoting environmental and social Good Agricultural Practices (GAP) throughout the tobacco leaf supply chain.
Primary Stakeholders Impacted
Growers, Communities

Responsible Marketing

Directing communications to adult tobacco consumers in a responsible manner and complying with laws and regulations.
Primary Stakeholders Impacted
All stakeholders

Safety

Ensuring the safety and welfare of RAI’s subsidiaries’ workforces.
Primary Stakeholders Impacted
Internal, Suppliers, Growers

Supply Chain Management

Partnering with suppliers who share the commitment to doing what’s right for their employees, the environment and society.
Primary Stakeholders Impacted
Suppliers, Communities

Talent Management

Creating a culture where employees can thrive while Transforming Tobacco.
Primary Stakeholders Impacted
Internal, Investors

MATERIALITY MATRIX

In 2016, RAI and its subsidiaries conducted a materiality assessment to identify and validate the most important economic, environmental and social topics impacting our stakeholders and our businesses.
 
Click on a topic in the matrix to learn more.
Youth
Tobacco
Prevention
Product
Innovation
Tobacco Harm
Reduction
Community
Engagement
Excise Taxes
Governance, Codes
of Conduct & Ethics
Illicit Trade
Litter
Prevention
Operational
Eco-Efficiency
Responsible
Agriculture
Responsible
Marketing
Safety
Supply Chain
Management

Talent Management
SIGNIFICANCE TO REYNOLDS AMERICAN
IMPORTANCE TO STAKEHOLDERS
HIGH
HIGHER
HIGH
HIGHER

 

Through this materiality assessment, RAI and its subsidiaries confirmed the importance of the three pillars to our stakeholders. Our work on these issues enhances our long-term economic, social and environmental sustainability, and supports our strategy to transform tobacco. RAI and its subsidiaries incorporate our Transforming Tobacco vision into our decisions, integrating stakeholder expectations into our strategy.

By committing time, energy and resources to the principles that drive the three pillars, we continue to transform the tobacco industry and achieve sustainable growth for RAI’s shareholders, employees and other stakeholders.