The RAI business strategy is the sustainability strategy, and consequently, the initiatives and activities that are undertaken in furtherance of Transforming Tobacco are subject to regular business processes and governance. To further ensure that sustainability is fully embedded throughout RAI and its subsidiaries, and to ensure that the tools and processes associated with sustainability are comprehensively managed and implemented, there is a specific sustainability governance structure.
Sustainability Governance Organizational Chart
The RAI board of directors is responsible for preserving the long-term interests of the company’s shareholders by overseeing the management, strategy and governance of RAI and its subsidiaries, including the Transforming Tobacco vision. In 2016, the Corporate Governance, Nominating and Sustainability Committee was responsible for direct oversight for our sustainability strategy. Effective January 1, 2017 the Regulatory, Sustainability and Public Policy Committee assumed responsibility. The charters of both the Corporate Governance, Nominating and Sustainability Committee and the Regulatory, Sustainability and Public Policy Committee list the following responsibilities (among others):
- Monitoring and reviewing programs and practices of RAI and its subsidiaries on sustainability topics, including Youth Tobacco Prevention, Tobacco Harm Reduction and Commercial Integrity (including environmental and social impacts of RAI, its operating companies and supply chain);
- Monitoring and reviewing the policies, programs and practices of RAI and its subsidiaries on political contributions and lobbying, and support of charitable organizations; and
- Monitoring the reputation generally of RAI and its subsidiaries, and their relationships with external stakeholders regarding significant social responsibility matters.
In addition, the executive vice president of public affairs annually reports sustainability progress to the full board.
Throughout 2016, the Governance and Sustainability Committee of the RAI Leadership Team met monthly, providing oversight of:
- Employee engagement;
- External stakeholder relations;
- Financial activities;
- Sustainability agenda; and,
- Enterprise risk management.
Each function within RAI and its subsidiaries has specific goals supporting the Transforming Tobacco vision, which are reflected in employees’ individual goals. Annual performance for each employee is evaluated against these goals, creating common goals and accountability within each company.
The Corporate Sustainability Team is a cross-functional team formed for the purpose of identifying, evaluating and recommending social and environmental sustainability initiatives; developing and recommending sustainability goals; ensuring the development and dissemination of best practices across the enterprise; and engaging employees in the sustainability mission of the company. It is sponsored by the executive vice presidents of public affairs, marketing and operations, and chaired by the vice president of corporate sustainability. The Corporate Sustainabilty Team is composed of members from human resources, leaf, procurement, brand, trade marketing, public affairs and operations, and having representation from each operating company. The team meets monthly to prioritize initiatives, report progress and address issues impacting the company and the industry. It includes three sub-teams, which also meet monthly. They are:
- Conversion & Distribution Team – responsible for improving environmental sustainability across RAI and its subsidiaries’ facilities, operations, distribution and logistics, and field sales;
- Culture & Engagement Team – responsible for engaging employees to increasingly embed sustainability within the corporate culture and to support the development of competencies necessary for sustainability to be an ongoing source of competitive advantage;
- Upstream Team – responsible for improving the environmental and social sustainability of RAI and its subsidiaries’ supply chains.