JT Group Human Rights Report

From principles

to practice
Our contribution to the 10-year anniversary of
the endorsement of the United Nations Guiding
Principles on Business and Human Rights

CONTENTS

05

Sustainability strategy

06

Board oversight and governance

07

Climate change

08

COVID-19 human rights response09

Key milestones and evolution

10

UNGPs anniversary11

Human rights metrics at a glance

12

Sustainability
strategy

Overarching
human rights
strategy

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

19

Role of local governance

22

SALIENT ISSUES	

23

Identification of salient issues

24Child labor

25

Environmental impacts

30

Fair wage

33

Forced labor

36

Harassment and gender impacts

39

Health and safety

41

Health risk

48

Non-discrimination and equality

50

Working hours

54

ENGAGEMENT55
Collaborations and partnerships

56

Stakeholder engagement

59

Remedy60
Culture change through training

63

Human rights regulations

64

TOWARDS 2030	

65

Vision 2030

66

UN Guiding Principles Reporting Framework
Index of Answers

71

R E S P ON D

04

IDENTIFYING
HIGH-RISKCOUNTRIES16DANY IZ ET

Our humanrights strategy

RE

Our assessments

SU

15

EA

Due diligence approach

M

14

ENGAGEMENTTOWARDS 2030

Environmental
impacts

Nondiscriminationand equality

50

06

STRATEGY13
Overarching human rights strategy

SALIENT ISSUES

ARISE:
multistakeholder
approach30

Harassment
and gender
impacts39

O RT

About the company

Messagefrom ourGroup
CEOSTRATEGY

REP

04

IDE
PR NTI
IO F
RI

Message from our Group CEO

E MB E D

INTRODUCTION03

INTRODUCTION

26

14

Stakeholder
engagement

Forced
labor

59

36

COVID-19
humanrightsresponse

09

VISION

2030

66
2

CONTENTS

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Introduction
Message from our Group CEO

04

About the company

05

Sustainability strategy

06

Board oversight and governance

07

Climate change

08

COVID-19 human rights response09

Key milestones and evolution

10

UNGPs anniversary11

Human rights metrics at a glance

123

CONTENTS

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Message from our Group CEO“When I contemplate who we are as a company
and how we operate, I am drawn back to the basic
idea at the heart of our management approach.”Our 4S model1 has been a fundamental partof our DNA for many years. It helps us to be
mindful of our key stakeholders – consumers,
shareholders, employees, and society – anddrives us to exceed their expectations in all that
we do, wherever we can.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

As an international company with a reputation
for the highest operating and reporting
standards, we frequently publish reports forinvestors, current and future employees, andthe wider public. We now add our first-everstandalone Human Rights Report to this list.
It is particularly appropriate this year, comingon the 10th anniversary of the unanimousendorsement by the United Nations of
their Guiding Principles on Business andHuman Rights.

The publication of this report has
provided us with an opportunity
to highlight both the achievementsof which we are so proud as well as
the challenges we have faced.
When I look back over the past decade at
our approach to human rights, I can see just
how far we have come. Internally, within thecompany, we have worked to embed respect
and tolerance across gender, race, religion,and sexual orientation and do not tolerate any
form of inappropriate behavior or discrimination.

And with our business partners, we have worked
to ensure that they integrate and adhere to ourhigh standards.
Respect for human rights is a key componentof who we are and how we conduct ourselves.
The JT Group Human Rights Policy is based oninternationally recognized guiding principles,
and together with our Code of Conduct,
guides how we operate in our daily operations.
We manage human rights due diligence as acontinual process and are constantly learningfrom the feedback we receive from stakeholder
engagement programs and Human Rights
Impact Assessments.
Changing times
Our business, particularly our tobacco business,
which includes some well-known brands thatdate back to the early 20th century, has seena significant change in recent years. Heightened
perceptions regarding smoking and health,the emergence of new reduced-risk products2
categories, more stringent regulations, andthe increasing importance of sustainability
issues are just some examples of a new
operating environment.
How we react to these changes affects how
we are viewed by our stakeholders.
In the area of reduced-risk products, for example,
we have adapted our strategy to respond to
fast-changing consumer expectations.

1

Read about our 4S model on page 5.

2

Reduced-Risk Products (RRP): products with the potential to reduce the risks associated with smoking.

In sustainability, we have embedded
three absolute requirements that
apply to our whole business, the firstof which is a commitment to respecthuman rights across our global
operations and value chain.

While every company is different, we havea collective responsibility to do business ina way that upholds people’s freedoms andhuman rights. In doing so, we will advance
progress to a more respectful world.

Rights-based approach
The most significant recent change, however,has been brought about by the COVID-19
pandemic. It has affected every part of our value
chain. Our priority throughout has remained
the safety of employees and their families andour stakeholders’ wellbeing. I am proud that wehave risen to the challenge and have adapted to
the new ways of working with agility and speed.
We have continued to apply our rights-based
approach throughout this time. For years, wehave used this strategy to drive improvements
in supply chain labor practices via ourAgricultural Labor Practices program, to support
communities with projects where we feel
we can make a real difference, and to bringcomfort to the disadvantaged in times of needor after natural disasters. And crucially, weare committed to upholding and safeguarding
human rights everywhere. The Guiding Principles
have shown themselves vital in shaping ourhuman rights approach and will continue toguide and inform us in the decade to come.

Masamichi Terabatake
Representative Director and President,
Chief Executive Officer

4

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

About the company
1985

1994

1998

1999

2007

2008

2010

Japan Tobacco (JT) Inc.
was established

JT stock was listed on
the stock exchange in Japan

JT acquires a majority
stake in Torii
Pharmaceutical Co., Ltd

Japan Tobacco International (JTI) is
founded as a result of JT’s acquisitionof the non-U.S. tobacco business of
R.J. Reynolds Nabisco Inc.

JT acquires Gallaher.
These two acquisitions
significantly strengthened theinternational tobacco businessJT acquires Katokichi CO., Ltd,
renamed to TableMark Co. Ltd.

JT acquires Fuji Food
Corporation, enhancing
the processed food businessHistory at glance

Read more about
the JT Group history.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

JT acquires Asahi Kasei Corporation’s
food business

The JT Group is a leading global
tobacco company headquarteredin Tokyo, operating in over
70 countries/regions and selling
products in over 130 countries/
regions. The Group employs morethan 58,000 people. In addition
to the tobacco business, we also
operate pharmaceutical andprocessed food businesses.

+58,000
Employees+130
Countries/regions where
JT Group sells its productsInternational
tobacco businessJapanese-domestic
tobacco businessPharmaceuticalbusiness

Processed foodbusiness

Our management
principle

Japan Tobacco
International, ourinternational tobacco
business headquarteredin Geneva, manufacturesand offers tobacco
products worldwide
except for Japan anda few Asian countries/
regions. It is the sourceof roughly 62% of the
JT Group’s revenue,
and its key markets
include France, Italy,
Russia, Spain, Taiwan,
Turkey, and the U.K.

The Japanese-domestic
tobacco business,headquartered in Tokyo,
manufactures and offers
tobacco products
mainly for Japan.
The Japanese market
is the source of roughly
27% of the JT Group’s
revenue and the world’s
largest market for heated
tobacco sticks (HTS).

The pharmaceuticalbusiness focuses on
the R&D, manufacturing,and sale of prescription
drugs, concentrating on
three specific therapeuticareas: metabolic
diseases, autoimmune/
inflammatory diseases,
and viral infection.

The processed foodbusiness handles thefrozen and ambient foodbusiness, mainly forfrozen noodles, packaged
cooked rice, and frozen
okonomiyaki (Japanesesavory pancakes); theseasonings business,
focusing on seasonings
including yeast extracts;
and the bakery businessthrough bakery chain
outlets, mainly in theTokyo metropolitan area.

Under our 4S model,
we strive to fulfill
our responsibilities
to our valued consumers,
shareholders, employees,
and the wider society,carefully considering
the respective interestsof these four key
stakeholder groups
and exceeding
their expectations
wherever we can.

Its international brandportfolio includes
the following:leading brands incigarettes and FCT(fine-cut tobacco),such as Winston,Camel, MEVIUS, and LD,
as well as in RRP, suchas Logic and Ploom.

Its brand portfolio includes
the following:
Ploom in the RRP
category and key
brands such as MEVIUS,
Seven Stars, Natural
American Spirit, Winston,and Camel in thecigarette category.

Main products include
the following:
CORECTIM® Ointment,
Riona® Tablets,
and REMITCH®
CAPSULES/OD Tablets.

Major products
include the following:
Reito-Sanuki-Udon(frozen noodles),Takitate-Gohan(packaged cooked rice),and the Vertex (yeast
extract seasonings).

Our vision and mission

Our vision is to be a growing global
company that provides diverse
value, unique to the JT Group.
Our long, rich history has endowed us
with three key strengths: a solid financialbase, superior brand equity, and a diverse
workforce. To realize our vision, we plan
to leverage these strengths as sources ofcompetitiveness in our business activities.
We will create a variety of products andservices that meet the needs of ourconsumers and society, enhance thecorporate value of the JT Group, andcreate social value that contributes tothe development of a sustainable society.

Shareholders

Consumers

Employees

Society

Our mission is to create, develop,
and nurture our unique brands
to win consumer trust while
understanding and respecting
the environment and the diversityof societies and individuals.
For more details on the above, including
our value creation process, see the JT Group
Integrated Report 2020.

5

CONTENTS

Sustainability
strategy
Sustainability permeates our wider
business strategy and is an integral
part of delivering value to ourstakeholders.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICEThe United Nations
Sustainable Development Goals
By working towards oursustainability targets, we aim
to fulfill our responsibilities tothe United Nations’ Sustainable
Development Goals (SDGs)
by prioritizing nine Goals.

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Absolute requirements
Our sustainability strategy, which applies acrossthe Group, is driven by three absolute requirementsthat are at the heart of everything we do.
1.

Respect for human rights

2.

An improved social and environmental impact

3.

Good governance and business standards

Focus areas
For our tobacco business, our core business,
we have set four focus areas with aspirational goals
and specific targets.
1.

Products and services

2.

People3.

Supply chain

4.

Regulatory environment and illegal trade
Read more about our sustainability
strategy, including pharmaceuticaland processed food businesses.

6

CONTENTS

Board oversightand governance
The CEO of the JT Group (JTG) and the Board of
Directors play a key role in formulating the JTG
Sustainability Strategy, which has respect for humanrights at its core. They oversee and are accountable forthe effectiveness of this strategy, as they are committed
to the Group achieving its sustainability targets.
The Chief Sustainability Officer, who is a memberof the Board, is responsible for driving sustainability
across the Group, including respect for human rights.

Our Executive Committee, management, and regional
teams are informed on the policy implementation.
Externally, we publish information via our website tokeep our stakeholders informed of news and progress.

Our reporting Concerns Mechanism helps
us ensure that we listen to and act on thegrievances of those whose human rights
might be impacted by our activities.

We take counsel from our External Human Rights
Advisory Board that was set up in 2017 and met on
an annual basis up until the time of the pandemic.
The Advisory Board plays an important role in providing
us with a broad external perspective in the human rights
area. Made up of international experts on businessand human rights, the Advisory Board advises us on
all issues relevant to the implementation of our humanrights strategy. They guide us with their expertise andchallenge us where they believe we need to improve,
helping strengthen our efforts to deliver on our humanrights commitments. We are intending to resume ourAdvisory Board meetings later in 2021.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Our human rights governance and management system
While the JTG CEO and Board of Directors areaccountable for the strategy, governance, and reportingof adherence to the JTG Human Rights Policy, each
local business unit is responsible for the operational
implementation and has an appropriate management
system to execute human rights initiatives.
For example, in our international tobacco business,markets are responsible for the operational
implementation of key programs to support Human
Rights Policy execution. Our Corporate Sustainability
and Leaf teams follow our core due diligence principles
to embed a culture of respect for people. A global
network of Human Rights Champions and local leaf
Supply Chain Due Diligence Committees provide
guidance and best practice sharing.
The Business Ethics Committee, internal corporate
functions, the External Advisory Board, and external experts
are consulted to provide input and support concerning
human rights and the JT Group Human Rights Policy.

1

The JTI External Human Rights Advisory Board.

External Human Rights Advisory Board1

Our commitment to do business with respect forhuman rights is anchored in a set of policies, covering
governance and compliance, environment, community
investment, and the supply chain. These policies defineand set expectations for JTG on human rights and guide
how we strive to do business every day.

To advance the rights of our stakeholders, it is importantthat we listen to the advice, concerns, and criticismsof people outside the JT Group.

Our JT Group Human Rights Policy follows theframework provided by the UN Guiding Principles
on Business and Human Rights (UNGPs).

Advisory Board members include:
Donna L. Westerman
Sustainable Purchasing Leadership Council

Review of our policies
At the start of our human rights due diligence process,the corporate-level Human Rights Impact Assessment(HRIA) was conducted by a third party to identify any
gaps in the context of human rights.

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

“Corporate governance is one of the mostimportant management issues. Governanceis a mechanism for ensuring that transparent,
fair, prompt, and resolute decision-making
is carried out in line with the 4S model, ourmanagement principles. Going forward, we
will keep our governance under review forcontinuous improvement to ensure it is fit
for the purpose.”

The findings of this assessment showed that humanrights are embedded across JTG framework of
corporate policies and procedures, including the means
to investigate and mitigate human rights risks across
our operations and business relationships.
Some of the most relevant policies within our
Supplier Standards, Agricultural Labor Practices (ALP)
guidelines, and Code of Conduct were also updated
and strengthened following this assessment.

Jonathan Drimmer
Paul Hastings
Paul Bowden
The Nottingham Law School
Richard Karmel
MazarsRona Starr
Association for Professional Social Compliance Auditors

Kazuhito Yamashita
Director and Senior Vice President,
Chief Sustainability Officer,
Compliance and General Affairs

7

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Climate change

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Whether fires in Australia, droughts in South America,
or tropical cyclones in Asia, we must respond to
emergencies quickly and with determination. We mustalso remember that these events are symptoms ofa larger, underlying pattern: the breakdown of global
environmental systems that makes them more frequent.
While our immediate focus has to be on adressing
the COVID-19 pandemic (another example of fragile
relationships in nature), we must also look to thelonger-term goal of restoring the balance between
people and the planet.
At JTG, we believe that we have a key role in tacklingclimate change as a global company. We are committed
to reducing our greenhouse gas (GHG) emissions to
support the Paris Agreement on global climate change,
with the longer-term aim of achieving net-zero carbon
emissions from our operations. We also recognize thatclimate change has the potential for profound negative
impacts on human rights as the most vulnerable inour societies are likely to be most negatively impacted
as average temperatures rise.

We are a memberof the Dow Jones
Sustainability Indices
Asia Pacific for theseventh consecutive
year and achieved
a perfect score of 100
in Environmental
Reporting andClimate Strategy
in 2020.

In 2020, we achieved a place on CDP’s prestigious ‘A List’for tackling climate change and acting to protect water
security for the second consecutive year. In addition,
CDP recognized us as a global leader in engaging our
supply chain in addressing climate change. This marks
our second recognition for CDP Supplier Engagement
Leader following 2019.
At JTG, we recognize that by empowering workers andcommunities and listening to their voices, we will be able
to meet our responsibility to operate in a low-carbon
future. As we embrace our obligation to respect humanrights, it is vital that our actions equally reflect theclimate crisis. Looking after our people and respecting
the planet go hand in hand, and together, this drives
our sustainability ambition.

“Climate change directly and indirectly interferes with theenjoyment of all human rights, including the rights to life,
housing, water and sanitation, food, health, development,
security of person and an adequate standard of living.
Furthermore, the impacts of climate change exacerbate
inequalities disproportionately affecting persons, groups andpeoples already in vulnerable situations including children,indigenous peoples, and persons with disabilities.”
United Nations Office of the High Commissioner for Human Rights (OHCHR),
Human Rights, Climate Change and Business (January 2021)

JT Group Environment Plan 2030
Our approach to environmental management
Our commitment to climate action with our science-basedtarget in line with the Paris Agreement

8

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COVID-19 humanrights response

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

At JTG, people come first. Despite hopeon the horizon with the global rolloutof the vaccines, the lasting effectsof the pandemic are likely to havetremendous impacts on everyday lives
and fundamental human rights.
Respecting human rights is acornerstone and key requirement of
the way we operate and do businessand is especially important in timesof economic hardship and a publichealth crisis. As a company with a
global footprint, we take an approachconsistent with global human rights
expectations. Whether you work on
a farm, in a factory, or in an office,
we strive to put people first.
The safety and wellbeing of our workers,
their families, and communities are at
the forefront of every decision we make.
Safeguarding employment
and wellbeing
For many of our employees andcontractors, working from home is not
an option because they work in factories,
sales distribution, and other field-based
jobs. To ensure they can work safely,
we put in place stringent measuresthat take a risk-based approach andput people first.

Throughout the pandemic, key decisions
have involved many of those directly
impacted, enabling us to effectively
safeguard their rights and see impacts
and issues through the eyes of people
who might be harmed. In addition,
our international tobacco businessdeveloped global guidelines that help
identify and try to protect employees andcontractors who are most vulnerable.
We have taken the same risk-based
approach for office-based workers.
No one should feel unsafe in theworkplace. In locations where conditions
have allowed employees to return tothe office, individuals are empowered
to decide whether they deem it safe
to return based on the new safetymeasures in place.

“In full alignment with my ExComcolleagues, I would like to reassure
you that caring for our employees
remains our key priority. If, so
far, our attention has focused on
measures of safety and wellbeing(working from home, split shifts,etc.), we also want you to knowthat you should feel reassured
about your employment status.
Despite the unpredictableenvironment, employment andcompensation arrangements willcontinue unaltered as a resultof our responsive measures to
the COVID-19 crisis.
Why are we doing this? Simply
because it is the right thing to do,and simply to reassure those of you
who might feel that their jobs, or theirpay, are at risk because of the crisis.”

The exceptional nature of the pandemicmeans that many of our employees arereporting increased anxiety and stresscaused by isolation and uncertainty.
To address this, our international
tobacco business developed a Mental
Health Toolkit and accelerated the rolloutof our Employee Assistance Program,which offers employees and up to five
family members access to mental
health counselors.
Read more about our approach
to mental health.

Eddy Pirard
Chief Executive Officer, JT International S.A.
In a letter to all staff on 27 March 2020
in response to the COVID-19 pandemic outbreak 1

1

Certain headcount changes were made that were unrelated to the crisis, not as a direct result of the pandemic.

Protecting those most at risk
To prioritize our actions, we focus ourattention on those whose human rights
are most at risk, taking concrete steps
to respect their rights. Our approach isinformed by the framework provided by
the United Nations Guiding Principles on
Business and Human Rights (UNGPs), in
particular, Guiding Principle 17 Protecting
those most at risk To prioritize ouractions, we focus our attention on those
whose human rights are most at risk,taking concrete steps to respect theirrights. Our approach is informed by
the framework provided by the United
Nations Guiding Principles on Businessand Human Rights (UNGPs), in particular,
Guiding Principle 17, which speaks aboutcarrying out human rights due diligence.
With our ability to conduct in-person
human rights assessments disrupted
by the pandemic, we have had to adapt.
One of the ways we have done this is byrolling out human rights self-assessment
questionnaires (SAQs). The SAQ is a setof approximately 100 questions basedon JTG’s human rights due diligence
methodology, our operational model,
and our salient issues. The responses
to these questions are reviewed byboth internal and external human rights
experts with relevant gaps and risks
identified, which the business is able toaddress through targeted action plans.
The large deployment of SAQs is astop-gap measure for high-risk countries

INTRODUCTIONSTRATEGYSALIENT ISSUES

until on-site assessments can be
conducted again.
To ensure our responses align withhuman rights best practice, we follow
the United Nations Development
Program Human Rights Due Diligence
and COVID-19 Rapid Self-Assessment
for Business which provides structure
to our response and ensures wemake rights-respecting decisions
across the business.

ENGAGEMENTTOWARDS 2030

Viable vaccines are now the reality,
which appears to be bringing the
pandemic under control in those countries
with an effective vaccine program.
However, we recognize that the economic
and human fallout will last for years.
That is why we firmly believe ourpeople-first approach is the right one.
It is in the interest of the private sector,
governments, and the public to safeguard
and protect human rights everywhere.

“The UN Guiding Principles on Business and Human Rights makethe pathway clear: companies have a responsibility to respect the rightsof those they impact through their business operations and supply
chains. That is especially important during a global pandemic. Ourcommitment to respect human rights and conduct due diligence neverwavered during the COVID-19 crisis. Our people, our suppliers, andour communities make us who we are, and it is vital that we continue
to care for them, hear their voice, and respect their human rights.”

Charlie Watson
Human Rights Director,
JT International S.A.

9

CONTENTS

Key milestones and evolution

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Introduced the Group’s
Sustainability Strategy.
The Strategy outlines threeabsolute requirements, andrespect for Human Rights
is one of them.
Determined how ourapproach to sustainablebusiness is alignedwith the SDGs.
Completed our pilot
year of HRIAs in six
high-risk countries3.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

2011
Founded ARISE - Achieving
Reduction of Child Labor
in Support of Education,as part of our sustainablesupply chain management.

2011

Published our first
Sustainability Report.

Publilshed the JT Group
Human Rights Policy,
which is based on
the framework provided
by the UNGPs.

Established human rights
governance at the country
level via a network of
Human Rights Champions4.

Undertook remote
human rights due
diligence with SAQs in
10 high-risk countries.

2013

2016

2018

2020

2007

2012

2015

2017

2019

2021

Established the Reporting
Concerns Mechanism toensure that we listen to
and act on the grievancesof those whose humanrights might be impacted
by our activities1.

Developed our Agricultural
Labor Practices (ALP)
guidance and kicked off
the program in 2013.

Carried out a company
materiality assessment byengaging internal and external
stakeholders and selected
a list of material issues.
Respecting human rights was
identified as a key issue.

Established theExternal Human Rights
Advisory Board2.

Completed another seven
HRIAs in high-risk countries
for the international tobacco
business and three HRIAs
in high-risk countries forthe processed food business.

Continued our remote
human rights due
diligence through SAQs.
Completed the identificationof our salient issues.

Published our firstIntegrated Report.

Will launch our new digitale-learning platform5.

Ran an externally facilitatedcross-functional workshop
to identify our salient humanrights issues.

Published our first Human
Rights Report as ourcontribution to the UNGPs
10-year anniversary.

Published our first JTI
UK Modern Slavery
Act Statement.
Conducted HRIAs
across JT Group
Conducted thecorporate-level HRIA
to review our policies
and procedures.
Launched a human rights
e-learning programin 25 languages,
available to ouremployees globally.

1, 2, 3, 4, 5This applies to our international tobacco business.

Made public our human rights
correspondence with Human
Rights Watch, the UN Human
Rights Council, and The
Guardian on our website.
Read more about our humanrights correspondence.

10

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

UNGPs anniversary

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

In June 2011, the United Nations Human
Rights Council unanimously endorsed
the UN Guiding Principles on Businessand Human Rights (UNGPs). Rather thancreating a new set of international law
obligations, these soft law principles
are a set of guidelines for states
and companies to prevent, address
and remedy human rights impacts
committed in business operations.

The publication of the
JT Group’s first standalone
Human Rights Report isour way of celebrating the
10-year anniversary of the
UNGPs, a set of principles
that the JT Group applauds
and strives to align with.
One of the key achievements of the
UNGPs has been the introduction into
the lexicon of business the terminologyof human rights due diligence. This isfundamentally different from the oneoff exercises of due diligence when
one company buys another. Moreover,human rights due diligence is a recurring
exercise of understanding, selfimprovement, and remedy.

greater health and economic impacts
and risks. The UNGPs, however, remaina baseline for corporate and statebehavior and present a great
opportunity for States and businesses
to drive improved and wider respect
for people. More and more companies
are now embedding the key conceptsof the UNGPs such as prioritizationand salience, risk assessments andintegrating improvements, and to a lesser
extent providing access to remedy.
At the JT Group, we are excited to see
the debate about mandatory humanrights taking place at the highest levelsof our society as it will not only senda clear message to all companies,
but it will amplify the positive impacts
that companies, such as the JT Group,
can have on society. More consistentmessaging and more significant efforts
from both corporates and governments
should help bring the UNGPs into themainstream andincrease respectfor human rights.

This year, however, should be a real
inflection point as COVID-19 has
amplified and laid bare the inequalities
to the most vulnerable in our societies.
The pandemic has disrupted supply
chains and exposed many workers to

11

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Human rights metrics
at a glance9
87% 
Of all the entities
that provided us withtobacco leaf reported
against Agricultural
Labor Practices.

Human rights
salient issues
CHILD LABORENVIRONMENTAL IMPACTS
FAIR WAGE
FORCED LABORHARASSMENT AND
GENDER IMPACTS

10th

1

20

12

Anniversary of ARISE
with 64,000 children
enrolled in formal andinformal education

Grower Livelihoods
Assessment conductedin Zambia

Weeks full paid
parental leave
regardless of gender 1

Remote humanrights due diligenceassessments
during COVID-19

HEALTH AND SAFETY

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

HEALTH RISKNON-DISCRIMINATIONAND EQUALITY
WORKING HOURS

7

64

38

66

551

20th

32

Years in a row as
Certified Global
Top Employer

Countries, in which weare certified as a Top
Employer by the Top
Employers Institute

Human Rights Impact
Assessments conductedto date with actionplans in place

Countries withlocal community
investment fundedby the JT Group

Organizations
supported oncommunity
investment programs

Anniversary of
the JTI Foundationthat supports withdisaster relief, disaster
risk, and building
community resilience

Human Rights
Champions working
across the company
to embed respectfor human rights

1

This applies to our international tobacco business.

2

25 HRIAs were conducted in Japan at our subsidiary companies, with 2 HRIAs conducted in China.

Read more about our external recognitions.

12

CONTENTS

Overarching human rights strategy

14

Due diligence approach

15

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Strategy
Our assessments

19

The role of local governance

22

13

CONTENTS

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Overarching humanrights strategy
R E S P OND

IDE
P R NT I
IO F
RIJT Group Code of Conduct
ReportingConcerns Mechanism
Supply chain
policies and standards

REP

JT Group
Human Rights PolicyO RT

ILO Declaration on
Fundamental Principles
and Rights at WorkEM B E D

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

International Billof Human Rights

Our humanrights strategy

RE

Our human rights strategy is based on five pillars:
Embed, Identify and Prioritize, Respond, Measure,and Report. This circular due diligence modelaligns with the UNGPs, the OECD Guidelines forMultinational Enterprises, and the OECD-FAO Guidancefor Responsible Agricultural Supply Chains.

Universal Declarationof Human Rights

SU

Our commitment to human rights is reinforced by our
Board of Directors through our Code of Conduct. Humanrights due diligence is an essential and integrated partof our business processes allowing us to identify andassess actual and potential human rights risks. Thisis enhanced by our Reporting Concerns Mechanism,
which, as well as acting as an early warning mechanism,
helps us ensure that we listen to and act on thegrievances of those whose human rights might be

Our suppliers and other business partners worldwide
are required to respect human rights by adopting andmaintaining internationally recognized labor standards
regarding child labor, rights of workers, and workplace
health and safety. Those requirements are embeddedin the JT Group Responsible Procurement Policy,
JT Group Supplier Standards, and ALP, which govern
our relationship with our business partners.

Principle documents
and policies

EA

Our JT Group Human Rights Policy is aligned withthe framework provided by the UN Guiding Principles
on Business and Human Rights (UNGPs). This means
working to avoid infringing the rights of others andaddressing any adverse impacts arising from our local
operations, which the business might have caused orcontributed to. We require compliance from our JT
Group employees, our Board of Directors, our suppliers,and our business partners.

impacted by our activities. Through this legitimate, fair,
and accessible mechanism, we encourage employees
and suppliers to speak up on human rights, without fearof retribution, about any concerns they may have.

M

We respect human rights across ourvalue chain and recognize the Universal
Declaration of Human Rights, theInternational Bill of Human Rights, andthe International Labor Organization’s
Declaration on Fundamental Principles
and Rights at Work.

D
N
A E
Y IZ
T

UNGPs
OECD Guidelines forMultinational Enterprises
OECD-FAO Guidancefor Responsible
Agricultural Supply Chains

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Due diligence approach
Embed

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We are working hard to embed human rights
thinking in our corporate culture and improve
employees’ understanding of the human rights
implications of business decisions. To do this, we
provide regular training, including online e-learning,and continuously share information about humanrights and the JT Group Human Rights Policy.

Read more about our human rights e-learning program.

Identify and prioritize
There are many ways within our due diligence
ecosystem, through which we identify and assess
actual and potential human rights risks in our value
chain. These include the following:1.

A broad-based approach acrossour entire value chain, fromfarm to store, via Human Rights
Impact Assessments (HRIAs)

2.

A deep dive approach via Supply
Chain Impact Assessments in
our Leaf Supply Chain

3.

A systemic process via ourAgricultural Labor Practices(ALP) and the Extreme Breachconcept in our Leaf Supply Chain

4.

Human Rights Self-Assessment
Questionnaires (SAQs)

RespondOur assessments are a means to an end, not an
end in themselves. They are part of a wider suiteof mechanisms that enable us to build a pictureof where our greatest human rights risks andimpacts might lie. The information generated
by these assessments helps focus our work tomeet our responsibility to respect human rights.
Specific country action plans are developed,
including the local business, employees, andcommunities, to address issues identified
through HRIAs and SAQs, and other tailored
programs. These plans enable the relevantbusiness unit to drive improvements and integrate
human rights into the existing management
processes in a consistent way. The plans havedefined responsibilities, clear timelines for
implementation, and key performance indicators
to monitor progress.
Read more about our action plans.

MeasureWe are committed to continually measuring theeffectiveness of, and improving where possible,
our approach to respecting human rights.
Since we started our broad HRIAs in 2017, we
measure the effectiveness of our actionplans. Each action plan includes anindividual set of key performanceindicators that measure theeffectiveness of our improvements
over time. Our local Human
Rights Champions track theimplementation of each action
item and report on a quarterly basis
to the central human rights team.
All human rights action plans are
discussed on a quarterly basis withlocal management.
Read more on our measurement
approach and local governance.

ReportOur understanding of our obligations under the
UN Guiding Principles is to ‘know and show’ that
we are aware of the potential human rights-relatedrisks to which we may be connected, and that weare taking appropriate steps to manage those that
occur. The UN Guiding Principles encourage
corporate transparency to the benefit ofa broad set of stakeholders. We always
work to meet this level of transparency
and disclosure.
Our first human rights report builds
upon our Integrated Reports, theregularly updated online reporting via our
websites, and the ARISE Annual Reviews
on our work to eliminate child labor in
our supply chain.
ARISE Annual Reviews
Integrated Reports
jt.comjti.com

In line with the UNGPs, these assessments focus
on the greatest risks to people, both within our own
company and through business relationships with
our suppliers and other related stakeholders. As aresult of the assessments, we aim to address theidentified risks of rights-holders, meet our stakeholder
expectations on respecting human rights, andmitigate the overall risks to people and the business.
Our approach and methodology are tailoredto match exactly what we are assessing. Thanks
to this flexibility, we continue to conduct humanrights due diligence throughout the pandemic.

15

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Due diligence approach

Identifying high-risk countries as part of a due
diligence roadmap1
In 2017, we began to prioritize our human rights workby identifying where we believed our greatest potential
risks to people lay. We started by using Maplecroftcountry risk indices, which provided geopoliticalinformation on how human rights are upheld in every
country we operated in.

Combining the Maplecroft data with these additional
business-focused criteria helped us focus on the
countries where people are most at risk. For us,
prioritization is not dictated by what is easiest to assessbut by the severity and scale of our potential impacts.

In 2019, our Human Rights External Advisory Board
recommended that we link the Maplecroft geopolitical
data with information on our value chain, as this would
better identify where the greatest risk to people in ourmarkets may be present. We set about adding additional
criteria into a much larger risk matrix. This information
helped us achieve a greater understanding of actualand potential human rights impacts, which we caused
or to which contributed.

As our business changes, so do our impacts on humanrights, and our responses equally need to evolve.
As such, we update our list of high-risk human rights
countries every two years.
We are committed to assessing all current
high-risk countries by 2025 in our international tobacco
business. By the end of 2020, we have assessed
25 out of 67 high-risk countries on human rights.
This equates to 37% in 2021, and we believe
we are on track to meet our 2025 objective.
Read more in Assessments.

Programs

To address our human rights issues,
local teams put in place their own
customized corrective measures throughhuman rights action plans. We also haveglobal programs available to the local
markets to ensure a consistent approachacross the Group.
JT Group Code of Conduct
JT Group Health and Safety
Agricultural Labor Practices
ARISE Annual Reviews
Community investment
Diversity and inclusion

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Using this country-level data, we were able
to identify which countries were at thehighest risk from a human rights standpoint
and start our due diligence work accordingly.
In our pilot year, we conducted five HRIAs of
our list of ‘high-risk human rights countries’,
which included Myanmar, Tanzania, andthe Dominican Republic.

The Maplecroft data provided valuable information
for us to start our journey, but we needed to apply
our business operations and activities into the risk
assessment to understand the whole humanrights context.

1

This applies to our international tobacco business.

16

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Due diligence approach

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Improving livelihoods
through the Leaf Sustainability Framework

Leaf Supply Chain Due
Diligence (SCDD)The wellbeing of growers andworkers is central to the long-termsustainability of our business.
For this reason, addressing humanrights impacts in our agricultural
supply chain is a key focus of ourwork to embed doing business
responsibly in the culture of JTG.

We source tobacco leaf from
more than 30 countries,
either directly fromgrowers via our verticallyintegrated operations orfrom third-party suppliers.
In 2020, we worked with more than
76,000 directly contracted growers
in our vertically integrated operations
in Bangladesh, Brazil, Ethiopia, Japan,
Malawi, Serbia, Tanzania, Turkey,
the U.S., and Zambia. Contracting
leaf growers directly enables us
to monitor and attempt to improvelabor and agricultural practices
carefully. It also has the wider
benefits of allowing us to produce
a more customized crop and helping
improving growers’ livelihoods,
productivity, leaf quality, and integrity.
Across our leaf supply chain,
we are not just buying leaf.
We are focusing on strengthening
a resilient, sustainable andtransparent leaf supply chain,supported by a robust processof continuous improvement.

The Leaf Sustainability Framework
consists of 3 pillars: economic,
social, and environmental; and six
focus areas: crop integrity, crop
production, resource management,
climate change, human rights, andgrowers’ livelihoods. The continuous
improvement process aroundthese pillars and focus areas isdefined as our Leaf SCDD Process,based on our five-step framework:
identify, prioritize, respond,measure, and report.
We see all these elements asinterlinked similar to how the UN
SDGs are interlinked. The elements
within our framework complement
the overall approach to responsible
and sustainable leaf sourcing.
For example, we encourage
growing complementary crops as
this practice is beneficial, both forpeople and the environment, and
it is one of the ALP components.
Crop rotation is necessary forsoil health, and complementary
crops create an opportunity for
additional income and food security.
Complementary crops, continuous
agronomic advice on improving
yield and quality, best agroforestry
practices, and responsible ALP, toname a few initiatives, contributehand in hand to the economic,
social, and environmental pillarsof sustainable and responsible
agricultural production.

Agricultural Labor Practices (ALP)
One of the targets of our Groupsustainability strategy is toimplement ALP in all leaf sourcing
countries by 2025. ALP sets ourposition and expectations regarding
three pillars of labor practices at
the farm level: Child Labor, Healthand Safety, and Rights of Workers.
ALP implementation began in2013 with pilots carried out by JTI
subsidiaries in Brazil and Serbia,
where local JTI entities contract
growers directly. ALP has since
been implemented in all othervertically integrated operations,
namely: Malawi, Italy, Zambia,
Tanzania, Turkey, USA, and Japan.
ALP implementation in newly
acquired businesses in Ethiopia and
Bangladesh is expected in 2021,
following on-the-ground HRIAs.
In 2015, engagement on ALP with
our appointed regular third-party
leaf suppliers began. Findings weremade available as of 2016 throughan online reporting platform every
six months. These findings provide
greater transparency on labor andhuman rights at the farm level andhelp us to facilitate dialogue at the
local level. This dialogue includes
annual face-to-face meetings with
our key suppliers.
Today, ALP is integrated into thebroader SCDD process that is carriedout locally and aligned to the UN
Guiding Principles on Business andHuman Rights, OECD/FAO Guidanceon Responsible Agricultural
Supply Chains, and OECD Due
Diligence Guidance for Responsible
Business Conduct.
How we operationalize the UNGPs
to identify and act on impacts at
the farm level
At JTG, we take the steps needed
to protect rights-holders as well as
train our agronomy technicians on
the ground to better identify andact upon any human rights impacts
they observe. One way in which
we do this is through our Extreme
Breach Concept.
Read on our Extreme Breach Concept.

+30
Countries where JT Groupsource tobacco leaf

+76,000
Contracted growers

100%
ALP implementationin leaf sourcing countries by 2025

17

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Due diligence approach
Key suppliers screened against Environmental,
Social, and Governance (ESG) criteria in
JT Group tobacco businessDue diligence in the non-tobacco
supply chain
We aim to achieve high standards ofintegrity across our business operations
and our supply chain. Our SupplierStandards define the requirements for
suppliers providing goods and services
to our company. We require suppliers
to comply with our Supplier Standards
and ensure that their suppliers involvedin providing goods and services to us
comply with our Supplier Standards.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Our suppliers shall respect human rights
by adopting and maintaining standardsof labor practices and working conditions
that comply with all applicable local
legislation and international conventions.
For example, several governments haveenacted legislation that prohibits any
form of modern slavery, which may
include forced labor, human trafficking,or child labor. For example, the UK
passed the Modern Slavery Act in2015. Accordingly, JTI UK has been
publishing the annual Modern Slavery
Act Statement in accordance with the UK
Modern Slavery Act 2015 since 2017.
JTI UK Annual Modern
Slavery Act Statements

Supplier screening
Our Group-wide supplier screening
process ensures that we apply
enhanced due diligence. Before entering
into a commercial relationship, our
key suppliers go through a detailed
qualification and selection process,including screening and onboarding.
This process allows us to learn more
about the supplier and understandany gaps versus our standards
and requirements. In particular, ithighlights any potential risks relating tocompliance, human rights, environment,
and health and safety.
If any risks are identified throughthis process, we offer support andcollaboration on mitigating the risks andmaking the necessary improvements. We
follow progress on a yearly basis and, if
there is no improvement after an agreed
duration, we may consider terminating
our relationship with the supplier.

2020

2023

64%

100%

In 2020, we revised the JT Group
Supplier Standards and reflected theincrease in transactions with overseas
suppliers. We have been embedding
these standards into all requests for
proposals and contracts to ensurethat all of our suppliers are awareof our requirements.
Working in collaboration with our
suppliers enables us to mitigate risks
and improve standards across our
supply chain, no matter what products
or services we procure.
JT Group Supplier Standards

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Our assessments
Our Human Rights Impact
Assessments (HRIAs) andLeaf Supply Chain Impact
Assessments (SCIAs) arefocused on those areas
where we believe ourbusiness activities may
have the greatest potential
impacts on people.

Activities during an impact
assessment are carefully planned
before onsite attendance to ensurethat we can achieve the objective offully understanding the actual andpotential impacts of our operations
on all stakeholders.
Key activities during HRIAs include
visits and observations of farming,
processing, manufacturing, and sales
and distribution operations. During
the assessments, we conduct a series
of interviews with employees andworkers, as well as representativesof suppliers, clients, partners,
and the community.

Despite the global restrictions on travel,
our commitment to maintain humanrights due diligence as part of our
Human Rights Policy never wavered
during the pandemic. We tailored ourapproach and used additional tools
where necessary, such as Human
Rights Self-Assessment Questionnaires(SAQs). These consist of around
100 questions based on our humanrights due diligence methodology.
We also undertook on-the-groundassessments in Bangladesh andZambia during the pandemic.

At the end of the assessment, wemeet with local management toreport on the findings and discuss
recommendations to address
the root causes.
Read more about our human rights
governance and management system.

Rights-holder involvement andconsultation are a fundamental
component of effective due diligence,so we plan to address this elementin our SAQs going forward.

See an example ofour assessmentsin the Ethiopia
2019 case study.

We recognize that relying solely on
SAQs can never be a panacea on theirown. However, they have enabled us
to stay connected with those areas
where the most vulnerable could
be perceived as being more at risk,
particularly in times of pandemic.

Due diligence through HRIAs, SCIAs, and SAQs
HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

For more details on the findings and how we address them, see our human rights assessment country map.

ThailandSAQ
Jul 2020

Japan
HRIA

India
SCIA

2018

Dec 2016

2019

Sep 2018

Switzerland
Corporate HRIA

Tanzania
HRIA

MexicoHRIA

Malaysia
HRIA

Oct 2017

Feb 2018

Sep 2018

Nov 2018

Malawi
SCIA

Ethiopia
HRIA and SCIA

Egypt
HRIA

Mar 2019

Jun 2019

Oct 2019

China
HRIA
(processedfood business)

Sep 2018

MyanmarHRIA
Nov 2018

ThailandHRIA(processedfood business)
May 2019

South Africa
SAQ

Jan 2020

Jun 2020

2020

Indonesia
SAQ

UAE
SAQ

Jul 2020

Oct 2020

Ethiopia
SCIA

2021

Jul 2021

Bangladesh
HRIA

Kazakhstan
HRIA

Colombia
SAQ

LebanonSAQ

Vietnam
SAQ

Bangladesh
SCIA

Jul 2019

Sep 2019

Dec 2019

May 2020

Sep 2020

Feb 2021

ZambiaGrowerLivelihood
Assessment

May 2019

Dominican
Republic
HRIA

Morocco
SAQ

Kyrgyzstan
HRIA
Sep 2019

Mar 2020

RussiaSAQ
Jul 2020
Tunisia
SAQ

GuatemalaSAQ

May 2020

Sep 2020
BrazilSAQ
Jul 2020

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Our assessments

Rights-holder identification1
We recognize that our operations
and products can have impacts
on individuals. Identifying andengaging these rights-holders
is a central component of ourhuman rights work.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Rights-holders are thosethat we focus on in
our human rights due
diligence and with whom
we work to protect fromhuman rights abuses.

Identifying and engaging with rights-holders through our assessments isvital in helping us make decisions that will drive long-term sustainability.
Our key rights-holders and vulnerable groups are listed below:

7

9

Vulnerable groups

Rights-holder groups

JT GROUP EMPLOYEESCHILDREN AND YOUTHCONTRACTORS ACROSS ALL SEGMENTS OF VALUE CHAINWOMENGROWERSMIGRANTS ANDREFUGEES

SUPPLIERS AND THEIR EMPLOYEESINDIGENOUS PEOPLE

DISTRIBUTORS / LOGISTICS SERVICES PROVIDERS AND
THEIR EMPLOYEESLGBTI PEOPLE

SALES / MARKETING AGENCIES AND THEIR EMPLOYEESTEMPORARY WORKERSCOMMUNITY MEMBERS, INCLUDING FAMILIES OF THOSE
AFORE-MENTIONEDETHNIC, RELIGIOUS, AND
CULTURAL MINORITIESJT GROUP CUSTOMERSInternal audit
To further increase our humanrights due diligence work, we
integrated human rights into existingrisk identification tools such as
our internal audit procedure. We
adapted the methodology to include
a greater focus on risks to people,
rather than simply risks to thebusiness, and trained our internal
auditors accordingly. This meansthat our internal audit procedure is
now better equipped to identify andunderstand risks to people.
The findings of the internal audits
are shared with our human rights
team, helping to build a wider
picture of potential risks to people
and allowing for more targeted andeffective human rights assessments
and, where appropriate, remedy.

JT GROUP CONSUMERS

1

This applies to our international tobacco business.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Our assessments
Case study – Assessment in Ethiopia 2019

Step 1

Step 3

Step 5

Step 7JANUARY 2019

MAY 2019

JULY 2019

AUGUST 2019

Introduction

Impact Assessment 1

Report on findings

Action Plan Launch• JTI Ethiopia started
the HRIA planning andpreparation phase
to define objectives,
timeline, and support
required to the team.

In-depth assessment in Jehwa, one of ourmain leaf production areas in Ethiopia, withthe support of third party twentyfifty Ltd.

• Presenting findings to Ethiopia
management of both assessments• Developing local governancestructure via human rights
champions to lead theimplementation of theaction plan

• Conducting the on-site assessment andstarting the fieldwork• Following up on any clarifications
required or further information needed• Holding introductory discussions with
community leaders in the Leaf area
• Building trust and promoting discussion
with rights-holders

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE• Consulting with potentially affectedstakeholders directly, effectively,
and meaningfully• Executing of action points
by the local team (respond,measure, and report)• Commencing a Deep Dive Studyof the Root Cause Analysis onChild Labor in Ethiopia at tobacco
growers and farms for ARISE• Identifying individuals that may beat heightened risk of vulnerability

2019

2020

Step 2

Step 4

Step 6

Step 8MARCH-APRIL 2019

JUNE 2019

AUGUST 2019

JULY 2021 (planned)

Desktop research starts

Impact Assessment 2

Prioritization workshop

ALP Integration• Gathering data and info on JTI Ethiopia
and reviewing all available reports

In-country assessment across all value chain segments
Leaf, Processing, Manufacturing, Offices, and Sales andDistribution, with the support of third-party BSR• Analyzing identified impacts of both assessments• Conducting an additional
assessment in July 2021
to cover all leaf production
areas in Ethiopia. This willbuild on the initial assessment
undertaken in 2018 in Jehwa.
The prioritized issues from thisassessment will guide the ALP
observation criteria when the
program is launched in Q4 2021.

• Identifying key rights-holders andstakeholders in assessment scope• Securing interviews with all
stakeholders, planning logistics
and agendas for assessments• Giving feedback to local management
based on initial findings, reconfirming
timeline and action points• Conducting the on-site assessment andstarting the fieldwork• Interviewing relevant company staff across functions,non-leaf suppliers, and other rights-holders• Systematically reviewing against salient issues
and the long list of human rights across the whole
JTI value chain• Prioritizing based upon scope, scale, and remediability• Drafting findings, opportunities, and a set of
impacts/indicators• Defining prevention and mitigation measures• Attributing whether caused, contributed, or directly
linked to the impact• Leveraging the ability to affect change in the wrongfulpractices of an entity that causes harm

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Role of local governanceFor every country where an assessment has
been undertaken, a robust local governancestructure is established. Having the proper
governance structure in place at the local
level is critical to driving improvements andintegration of human rights management
into everyday processes.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Human rights action plans are developed after every
assessment and fall under the responsibility of the
management in each country. To ensure the actionplans are implemented effectively and meaningfully,
we appoint human rights champions and contact
points in each country. To date, we have a network of
32 human rights champions in our international tobacco
business across 22 countries and 28 contact points
across 3 countries in our Japanese operations.

Q&A with champions – JTI Tanzania
Q: What is yourrole as JTI Human
Rights Champion?

Angela Mangecha
People & Culture Director

The human rights champions are selected by the generalcountry manager and local management, typically fromthose operational activities where human rights risks are
relevant. The champions manage the implementation of
the action plans locally, and the activities and progressof these champions across JTI’s global footprint aremonitored by the Human Rights Director at JTI HQ.
Our head office provides the champions with training
materials on the UN Guiding Principles on Business andHuman Rights, as well as support and guidance for the
implementation of specific points within the action plans
when requested by the champion.
After each leaf Supply Chain Impact Assessment, aSupply Chain Due Diligence Committee is established.
This committee works across the operations to ensure
meaningful processes are developed and implemented
to act on the assessment findings. Led by senior
management, the committees are crucial to ensuringthat we meet our long-term improvement objectives.

Bright Kiwia
Corporate Affairs
Business Partner, Leaf

Bright: Together withAngela, I am a focal
person for all issues
related to human rights,
where I monitor andcoordinate the agreed
action plans with local
teams and update
management andHQ on progress.
Q: Do you think the role
helped drive positivechange and ensured
local accountability forhuman rights following
the assessment in 2018?
Bright: Indeed, I have seena change in how we thinkand conduct ourselves.
Led by the leadership team,
we have communicateda human rights stanceacross the business,starting with updating ourcontracts with growers,
suppliers, service providers,etc. Championing this,I have been consulted
on human rights-related
issues and led various
discussions on several
topics, e.g., ALP reports.

Q: What has been
the biggest challenge
for JTI Tanzania
to respect humanrights and implement
the Action Plan?
Angela: JTI Tanzania
always respected
human rights, but ourbiggest challenge wason National ID cards
since this was notenforced initially. Once
the Government enforced
it, we were able to ensure
all staff had a National
ID. Another challenge isthat we are one of the
few companies that gives
a more reasonable andfair wage for outsourced
staff. We want to ensure
outsourced staff getsbasic rights, and trying
to get vendors on thesame page has been achallenge. We continue
working closely with themto ensure this is done.

Q: What has been the
biggest success story
or progress with regards
to the Action Plan?
Can you give 1-2
examples of progress or
improvements resulting
from the Action Plan?
Angela: Our vendors
actually mentioned thatworking with a company
like JTI Tanzania
ensures they also stepup their services andstandards, making them
adopt best practices
more proactively rather
than relying on publicauthorities. JTI Tanzania
cares for all people,
not just its staff. This
makes people want
to work with us.
Q: How did JTI HQ
support you during
the process so far?
Bright: They provided
expertise, timelines, andguidance as per agreed
action plans. They
provided me with further
clarity on some issues
and shared best practices
from other markets andorigins that we could
apply in Tanzania.

Q: How has theknowledge andunderstanding of humanrights changed sincethe 2018 HRIA?
Bright: Personally,
the assessment hasenhanced my knowledge
and understanding of
human rights. We see an
improved understanding
across our growers with
programs like the ALP.
We have also managed toshare this knowledge with
employees and growers
across the supply chain.
Q: Does the management
team engage on humanrights issues, and isthere leadershipand responsibility
from the top?
Angela: Yes, they do.
Human rights cut acrossthe business, with eachdepartment having arole to play. Based on
identified risks within
the leaf business, theleadership agreed on
the priorities and adopted
the action plan thathas been successfully
implemented, withmost issues having
been addressed. The

leadership team has
been responsible for the
execution of the action
plan, which is ongoingand from which we
continue to learn. For
instance, understanding
our leaf footprint outsideof the Tabora region has
led us to take greater
account of humanrights obligations inthe supply chain.
Q: How do you feel about
having human rights
integrated into yourperformance objectives
and annual appraisal?
Will it be useful to embed
this into our objectives
to help drive change?
Angela: I think it means a
big step, and this signifies
that the company has
seen human rights as
integral to the businessand has made its
commitment clear.
Adopting a responsible
business and humanrights culture won’t only
drive change but showthat we walk the talk.

Q: Looking ahead,
while the immediate
action plan has largely
been addressed, will
you continue to act asa champion and drive
improvements in humanrights in Tanzania?
Bright: Yes. Embedding
a culture of respecting
human rights is neverending. With the businessenvironment changing
rapidly, human rights
issues are becoming thecenter of attention in our
supply chain operations
requiring constantmonitoring. The drive for
improvement on humanrights performanceis unavoidable.

22

CONTENTS

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Salient
issuesIdentification of salient issues

24Child labor

25

Environmental impacts

30

Fair wage

33

Forced labor

36

Harassment and gender impacts

39

Health and safety

41

Health risk

48

Non-discrimination and equality

50

Working hours

54

23

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HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Identificationof salient issues
The UN Guiding Principles on Businessand Human Rights require a company to“identify and assess any actual or potential
adverse human rights impacts with which
they may be involved either through theirown activities or as a result of their business
relationships.” It further states, “Humanrights due diligence (…) should be ongoing,
recognizing that the human rights risks
may change over time as the businessenterprise’s operations and operating
context evolve.” Therefore, revising ourhuman rights risk map on a regular basis
and reflecting changes in our internal andexternal business landscape is critical.

In 2016, we created our first human rights risk maps
for all our businesses: tobacco, pharmaceutical andprocessed food. The maps helped us understandpotential human rights impacts associated with ouroperations and activities as well as assist us in thedevelopment of the JT Group Human Rights Policy.

As external and internal environments have evolved,
we have further reviewed our salient issues in 2021.
This resulted in the identification of two further salientissues associated with our own operations, value chain
and new business relationships, thus having nine salientissues in total.

In 2019, our international tobacco business identified
seven salient issues through an externally facilitatedworkshop involving key stakeholders across thebusiness. To ensure that our ongoing human rights
program and due diligence processes already target
these salient issues, we have integrated them into our
HRIA and SAQ methodology used locally. These issues
are now also included in our methodology for identifying
high-risk countries. This helps the business to prioritize
the due diligence process based on where our greatest
potential impacts lie.

Going forward, our plan is to corroborate these salientissues with rights-holders on the ground, so we canbetter understand and focus our efforts and resourceson those issues perceived most at risk in each market.

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

“Identifying salient issues is the initial step for thehuman rights due diligence process under the UN
Guiding Principles. The concept of salience uses
the lens of risk to people, not the business. It is key
that we as a business pay special attention to allrights-holders but in particular those individuals
that may be perceived as vulnerable. Therefore, we
prioritize our resources where we have identified
that the most severe negative impact to people mayarise through our business activities.”

Kyoko Fujita
Human Rights Manager, JT

We identified nine salient issues at the Group level:

1

2

3

4

5

6

7

8

9

Child
labor

Environmental impacts

Fair
wage

Forcedlabor

Harassment& genderimpacts

Health& Safety

Healthrisk

Non-discrimination& equality

Workinghours

24CONTENTS

INTRODUCTIONSTRATEGYSALIENT ISSUES

The international community
has made clear that thepersistence of child labor
in today’s world is
unacceptable.

+152m
Children in child labor globally

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE+121m
Estimated child labor
globally in 2025

JT Gr
o

TOWARDS 2030

up

Risk
locationCo

The challenge of ending child labor worldwide
remains formidable. The latest global estimatesindicate that 152 million children are engaged inchild labor globally, accounting for almost one in
10 of all children worldwide. Africa accounts fornearly half of all child labor (72 million children),followed by Asia and the Pacific (62 million).
Agriculture employs 70% of children in childlabor. Almost half of all of these children workin occupations or situations that are hazardous
to their health and safety. Maintaining thecurrent rate of progress in tackling the issue
would still leave 121 million children engaged
in child labor in 2025.
Child labor occurs for many complex reasons:from poverty and tradition to a lack of awarenessof the hazards of using child labor. We believethat significant progress can only be achieved
when there is a wider understanding as to howsocial, economic, and cultural factors cause
child labor to exist in the first place.
There is broad consensus that an effective way
to stem the flow of school-aged children into
child labor is to improve access to and qualityof schooling. This is in addition to economic
empowerment and the proper legislation and theenforcement of this. Having the opportunity toinvest in children’s education will enable families
to recognize that, in the long-term, the returns
are greater than those associated with involving
children in work. Universal quality education
promotes all children’s rights and helps breakintergenerational cycles of poverty and relianceon child labor.
Eliminating child labor and regulating the use ofjuvenile labor is an essential element of our JTG
Supplier Standards, and we strive to evaluate our
suppliers on their practices around recruitment,
age verification, and working conditions.

Sup

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ply

1. Child labor

ENGAGEMENTn s u m er

All suppliers sign and are bound to respect
the Standards, which state:“Child Labor is prohibited. Suppliers mustcomply with ILO Convention 138 (Minimum
Age Convention) and ILO Convention
182 (Worst Forms of Child Labour Convention)
if local legislation does not impose more
stringent requirements. Suppliers undertake
not to source any supplies from providers
using child labor.”
Through our assessments and ALP program,
we regularly work with suppliers on how they
understand and respect this requirement andagree on remediation measures when gaps
or potential non-compliances are identified.
JTG has been committed to tackling childlabor in our four tobacco-growing communities
since 2011, through our flagship program –Achieving Reduction of Child Labor in Supportof Education (ARISE).
ARISE
ILO statistics on child labor
JT Group Supplier Standards
ILO Convention 138
ILO Convention 182“We will not end child labor until every child is inschool, and we will not succeed in ensuring every
child is in school until we eradicate child labor.”
Kailash Satyarthi
Nobel Peace Laureate

25

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

1. Child labor
ARISE – Multi-stakeholder approach

The ARISE program isa multi-stakeholder dialogue
and cooperation to address
an impact.
Child labor was identified as a risk, but
we knew that we could not fix it alone.
The business engaged and consulted
with relevant stakeholders and built the
ARISE program in partnership with theInternational Labour Organization (ILO)
and Winrock International.

Brazil, Malawi, Tanzania, and Zambia
Children enrolled
in formal andinformal education
2020
6,358

2011–201957,736

Community members
and teachers educatedabout child labor2020
328,315

2011–2019
431,350

Householdswith improved
income2020
6,119

2011–201917,927

Government policies
and plans developedwith our input
2020
0

2011–201974

To date, the ARISE program has directly
helped educate over 64,000 children,with 6,358 children placed into formal
education in 2020, despite the pandemic.
ARISE

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

International Labour Organization (ILO)
Winrock International

Total

64,094

Total

759,665

Total

24,046

Total

74“With ARISE, we have launched and developed
over ten years a strong, flexible program toeliminate child labor in our grower communities.
In the future, we will work even more directlywith communities to achieve this.”
Stefan Rissi
Community Investment Director,
JT International S.A.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

1. Child labor
ARISE – Multi-stakeholder approach

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Key milestones
ARISE partnership between
JTG, ILO, and Winrock
International marked
the beginning of our childlabor elimination efforts

ARISE program
launched in Zambia

2011

2013

Assessment and preparation
for ARISE Tanzania

Learning from the past,embedding best practices,and driving innovation

Extended role forWinrock Internationaland ILO's exit

Implementation of a new
ARISE model with new local
implementing partners

2015

2017

2019

2021

2012

2014

2016

2018

2020

ARISE program launchedin Malawi and Brazil

Independent evaluation
performed to enhance
the program and define
the future strategy for ARISE

ARISE launchedin Tanzania

Increased focus
on livelihoods

New ARISE model
developed with increased
program responsibility
and accountability for
our local business

Project criteria and activities
Pillar 1

Pillar 2

Pillar 3

Education
and awarenessSocio-economic
empowerement

Legal
frameworks

EARLY CHILDHOODEDUCATIONCOMPLIMENTARYBASIC EDUCATION

1VOCATIONAL TRAININGWOMEN AGRIBUSINESSGROUPS

ANTI-CHILD LABOR CLUBSYOUTH PRODUCER CLUBSAFTER SCHOOL ACTIVITIESMODEL FARMS SCHOOLSEDUCATION AND SCHOOLRELEVANT INFRASTRUCTURE

DEVELOPING AND
PROMOTING MARKET ACCESSAs per local context and capacity.

LOBBYING1 FOR ANTI-CHILDLABOR POLICYSUPPORT FOR THE REVIEWOF THE NATIONAL ACTION
PLAN ON CHILD LABOR

Alignmentwith SCDD
assessment

LOCAL ARISE PROJECTSSHOULD FIT UNDER
CRITERIA AND GO HAND IN
HAND WITH OTHER GROWER
RELEVANT PROGRAMSDESIGNED TO
EFFECTIVELY ADDRESSTHE NEEDS ASSESSED –CHILD LABOR ISSUES

27

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

1. Child labor
ARISE – Multi-stakeholder approach

ARISE presence

COVID-19

Br zil

Ma awi• Training child protection workers• Promotion of decent work and the Right Development• Technical assistance for the developmentof government plans• Support for Community-Based Childcare Centers

Successful program initiatives include:• Training mothers in entrepreneurship, property
management, and income-generating activities

Za

bia

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Successful program initiatives include:• Developing sustainable village saving groups, which
improve the livelihoods of vulnerable families• Partnering with the Ministry of Education to provide
formal vocational training to selected youths identified
and withdrawn from child labor (the certification isnationally recognized)• Breaking through strong cultural barriers in
the communities to accept, embrace and own
the ARISE Program
Watch video
to learn more
about ARISE.

Successful program initiatives include:• Vocational skills development courses andincome-generating activities• Community empowerment through Community
Infrastructure Programs• Teacher education, including use of the SCREAM(Supporting Children’s Rights through Education,
the Arts and the Media) methodoloogy, which
supports children’s rights through education,
the arts, and the media

Tanz nia

Successful program initiatives include:• Partnering at the national, regional, and district level
and taking action together on child labor• Increasing workers’ and employers’ organizations
capacity to combat child labor in thetarget communities• Ensuring that community members, including leaders,have increased knowledge, and awarness of child labor

ARISE operations were largely halted in all four countries
from mid-March to June 2020 but resumed in our
African communities by the beginning of the third
quarter of 2020. Our partner Winrock International has
carefully monitored the security and safety situation and,once project activities resumed, enforced preventative
measures at all activities. These include limitation ofgroup size and provision of masks and handwashingfacilities to participants.
Despite the COVID-19 pandemic, the ARISE
program adapted and developed iterative
contingency plans to continue working for andwith ARISE communities to fight child labor.
Global Child Forum
We were recognized as a leader by the
Global Child Forum, as part of their 2019
Global Corporate Sector and Children’s
rights benchmark study ‘The State ofChildren’s Rights and Business: From
Promise to Practice’. This benchmark
analyses just under 700 of the world’s
largest companies and how they aresafeguarding children’s rights as part oftheir business value chain. We are proudthat the study recognizes the concrete
actions we have taken to embed respect forchildren’s rights, notably through our flagshipchild labor elimination program ARISE.
Read more about the Global Child Forum

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

1. Child labor
ARISE – Multi-stakeholder approach

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Case study – Malawi: rescued, empowered, and resilient

For 48-year-old
Philipina Maudzu,
family problems
forced her to takecare of her fivechildren alone.
She dependedon small-scale
farming to earna living, but thisdid not give herenough time
to take careof her children.

78
Village Savings andLoans groups“I had no idea what to do and how to do things differently to improve my income,”
she stated. “My children and I were eating only once a day because we had no time
to work in our garden. Instead, we were working in the tobacco fields to make ends
meet,” continued Philipina.
Her Grade 3 boy was withdrawn from working in the tobacco fields and enrolled at
the nearby Livulezi school in Ntcheu District. She also enrolled in one of the three
Women Agribusiness Groups (WAG) in their community. “I did not object because
I knew it was for the good of our home and children,” responded Philipina when
asked how she felt about joining a business group for the first time in her life.

“I believe thatmost men andwomen canimprove theirlives and thatof theirfamilies ifthey areinvolved
in smallbusinesses.”Philipina Maudzu
Community Investment Director

Alongside fellow women in the group, Philipina
received training on savings, basic business skills, andpig farming production, where she was later selected
to be the leader of the group. “In the group, I learned
record keeping, marketing, and how to plan mybusiness,” she recounted.
She later took a loan from her WAG in 2018 andstarted low-level petty trading where she was
supplying fish and tomatoes in Muuso II village.
She was also given one pig by the WAG. In 2019,
she managed to make a profit of MK 195,000(194 USD) from her petty trading. Further, she now
owns a total of six pigs. “I can eat three times a day,and I have managed to pay school fees for my threechildren in secondary school. My child who waswithdrawn from child labor is now in standard 6,”
she explained with joy.
Philipina’s children no longer work in tobacco
fields, and she is a role model for other womenin Muuso II village.
ARISE has helped establish over 78 Village Savingsand Loans groups with close to 1,200 participantsin Dowa, Ntcheu, and Lilongwe districts.
Read more case studies on ARISE website.

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INTRODUCTIONSTRATEGYSALIENT ISSUESHUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

JT Gr
o

TOWARDS 2030

Risk
locationCo

Environmental issues
are of increasing global
concern and have brought
many challenges to oursociety. Climate change,
biodiversity loss, andpollution have profoundnegative impacts on
people globally. A healthy
environment is essential to
the full enjoyment of a wide
range of human rights.

In recent years, the recognition of thelinks between human rights and theenvironment has greatly increased.
We know that action now to safeguard
environmental services and tackle
climate change is the action that places
value on the future fulfillment of humanrights. We all need to address theseissues and, as a global organization,
we recognize that we have a key role
in reducing our environmental impact.

Sup

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2. Environmental impacts

ENGAGEMENTn s u m er

Our approach follows 7 steps:

1.

Identify environmental
risks and opportunities

2.

Implement effective
environmental
management systems

3.

Assure compliance incountries and regions
where we operate

4.

Manage change
associated withour business2. The environment impacts ouroperations. Our primary raw material
as well as many of our other nontobacco materials (e.g., card, paper)
are agriculture-based.

5.

Consider our value
chains, and engage
with suppliers andservice providers

We strive to reduce the environmental
impact of our operations and supply
chain, focusing on the most significant
environmental risks and opportunities forour business and stakeholders. These
currently include climate change, water,
the sustainable use of resources, andresponsible waste management.

6.

Improve awarenessand competency among
employees about
environmental issues

7.

Engage with
our stakeholders

We have a two-way relationship withthe environment.
1. As with any organization, our activities
impact the environment: the resources(energy, water, materials) that we use,
our emissions, and the waste that
we generate.

All actions related to the environment
are guided by our JT Group
Environment Policy.
JT Group Environment Policy

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

2. Environmental impacts

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

JTG environmental
commitments

In addition to
reducing ourgreenhouse gas
emissions, we
focus on reducing
the amount ofwater we consume,
reducing theamount of waste
we generatefrom our own
operations,and ensuring asustainable wood
supply for our
tobacco growers.

Case study – Recognitions for our greenhouse gas emissions reduction
Our efforts to address climate change are recognizedexternally. In 2020 we were included in the ‘A List’by CDP Climate Change in recognition of our leading
position in managing climate-related risks andopportunities.
The JT Kansai factory (tobacco manufacturing)received two awards from Kyoto City and the Kyoto
prefecture government for its emission reduction
initiatives. The factory is proactively tackling the
reduction of greenhouse gas (GHG) emissions byimplementing projects such as high-efficiency freezer
installation and eco-friendly compressor use.
In December 2019, Nihon Syokuzai Kakou, asubsidiary of our processed food business, wasselected as a leading company and awarded by
the government of Miyazaki prefecture for its effort
to reduce GHG emissions.

Our factory in Jordan was awarded the ‘Environmental
Stewardship Award’ by the World Bank, as the firsttobacco factory in the world to use direct solar steam
generation. A rooftop-mounted collector, steam
storage, and a steam-driven absorption chiller provide
the site with energy and building heating and cooling.
The solar steam installation provides approximately
20% of the factory’s steam demand, with a reduction
in CO2 emissions of approximately 100 tons per year.

We continuously strive to further reduce ourenvironmental impact by combining technology-driven
innovation with the Japanese philosophy of Kaizen,
meaning ‘continuous improvement’.

Water and waste
The water required for tobacco crops
comes predominantly from rainfall.
However, our operations and processes
need water, even if solely for drinking andsanitation. Therefore, water is an essential
resource in our manufacturing supply
chain. But good water stewardship is notjust about reducing the amount of waterused. It is about the management of water
resources. Our approach to managementof water-related issues was recognizedwith a place on CDP’s 'A List' in relation
to Water Security in both 2019 and 2020.
From a societal and stakeholder perspective,
waste, and particularly plastic waste, isof increasing concern. From a businessperspective, all waste has a direct cost(handling and disposal) and an indirect cost(resource and processing costs, etc.). Acrossthe company, we apply a ‘Reduce, Reuse,
Recycle’ approach. We also set targets for
waste reduction as we believe that reducing
waste helps conserve resources, which inturn helps to minimize our environmental
impact and cut business costs.
We are in the early stages of our journey
towards full circularity. However, we alreadydemonstrate a circular approach at many
stages of our value chain. These include
recycling tobacco waste into fertilizers
for use by our growers, reusing cardboard
packaging between our operations, andreducing the amount of plastic in our
make-your-own packaging in Germany.
We have recently announced new
targets to improve the recyclability of our
packaging and to increase the recycledcontent of our packaging materials.

Case study – WASH Initiative
Access to clean water and sanitation is vital and a basic humanright. Many of us take it for granted that we have clean water
available at the turn of a tap. However, in many of the countries
where we operate, water is a scarce resource. That is why we havelaunched the Community Investment in Emerging Market WASH
Initiative, which aims to help one million people access water,
sanitation, and hygiene (WASH) facilities by 2025.
WASH is a focus for JTG because it is a key development issue
where we can make an impact on improving the lives of people
through focused and scalable projects. The program is being
funded by reinvesting money from our well-established markets
to emerging or developing markets, where the need is greater.
Over the next five years, we will invest up to USD 15 million in
the WASH Initiative. This is key to our Corporate Sustainability
Community Investment 2030 target of USD 600 million to help
build more inclusive, resilient, and sustainable communities.
Watch the video
about WASH.

4
Long-term projects have been successfully launched to date
2 in Bangladesh

1 in Ethiopia

1 in Mexico

Partnerships
Habitat for Humanity
Bangladesh
and Swisscontact
Bangladesh

Partnership
Habitatfor Humanity
Ethiopia

Partnership
Habitatfor Humanity
Mexico300,000

beneficiaries with access toclean water and sanitation

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

2. Environmental impacts

Wood production and forest conservation
Wood is a critical resource for our tobacco supply chain
to be sustainable in many countries. It is used for barnbuilding and as fuel in the curing process as well as fordomestic purposes. It is important that we play a role inensuring that the natural wood is protected and that ourforestry practices for wood production, management,
and conservation across our business are sustainable
and responsible.
Ensuring a sustainable wood supply and further
contributing to forest conservation and rehabilitation
are key objectives set out in the JT Group
Environment Plan 2030.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We do this by proactively working to improve themanagement of natural resources throughout our
supply chain and tobacco-growing communities.
Our Agroforestry Programs address sustainable
forestry, wood use, and management.
In Malawi and Zambia, we
encourage growers to build ‘live
barns’ by planting trees thatwill form the main structureof a Burley curing barn
within three years.
This helps conserve
vital wood resources
and reduces growerbarn maintenanceefforts and costs.
We also contribute toforest restoration andrehabilitation, collaboratingwith NGOs, universities, andindependent experts. By
encouraging a sustainable wood
supply for our operations and the communities
we work with, we have a better chance of a sustainable
future for the environment and our company.
JT Group Environment Plan 2030

Case study – Contributing to forest

rehabilitation in Brazil

JTI Brazil has partnered with the Wildlife Researchand Environmental Education Society to restore over
300 hectares of permanent protection areas in
Brazil, with funding from the National Bank forSocio-Economic Development. These areas
include land owned by tobacco growers and partof the Irati National Forest. The restoration work
started in 2018. In Irati National Forest, 35 hectaresof pine trees were replaced by native species tohelp restore the natural landscape. The project also
involved the training of 33 local college students
in ecological restoration.
JTI Brazil defined priority areas instrategic river basins, based on
factors such as soil, rain, andproximity to other projects,
to create green corridors(strips of land with sufficient
habitat to support wildlife)
connecting different
regions. One of thefirst sites we selected
was the Taquaral
river basin in
Parana State. The
local businessintroduced the
project through aseries of mobilization
meetings attended by 200
local growers. The partnershipprovides growers with technical assistanceand support before and after the restoration work
begins. The team in the market is committed
to protecting and restoring natural forests andsupporting local communities.

Our target
To replace all wood from natural forests used in the
tobacco curing process of our directly contracted
growers with renewable fuel sources by 2030.
What we are doing:• Through our Agronomy Development and Extension
Training (ADET) centers, we have developed the
Minimum Forestry Standards (MFS) – a set ofForestry specifications and guidelines designed
to achieve sustainability of wood supply for tobacco
production and curing. When well adopted by growers,
MFS result in improved tree seedling production andquality, and woodlot establishment with improved
productivity potential. This approach brings us closer
to achieving sustainability in the wood supply, helps
avoid deforestation, and improves the conservation
prospects for natural woodland.

300
Hectares of permanent
protection areas
restored in Brazil• Another innovation that was developed and further
improved at ADET in Zambia is the Matope (mud) barn.
This more fuel-efficient curing barn reduces wood
consumption by up to 75% and carbon emissions
accordingly, compared to its predecessor (the‘Pepper Pot’ barn). This is an important improvement,
as emissions associated with curing tobacco leaf
represent the largest single source of indirect GHG
emissions for our business.
• The number of Matope barns installed by growers
in Zambia are the following: over 1,300 units in 2018,
1,884 units in 2019 (32% cumulative coverage),
1,704 units in 2020 (43% cumulative coverage).
The target is 100% Matope barns coverageby 2024. Based on the 2020 sustainable tree
planting activities in Tanzania, Zambia, and Brazil,
we estimate that the business is on a path toachieve 41% renewable wood sourcing by 2027
(accounting for 7 years wood production cycle).

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INTRODUCTION“Although there is no universally accepted amount that defines such
remuneration, it can be described as a wage from full-time work thatallows people to lead a decent life considered acceptable by society,”says ILO senior economist Patrick Belser. We believe this includes
adequate food, clothing, housing, and medical care for themselves andtheir families together with a small amount of discretionary income.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Numerous NGO and media reports cite concerns about the
tobacco supply chain’s management of wages and working
hours. As can be seen from our case study, there are growers
who have difficulty paying workers on time, where wages canbe low, and problems with indebtedness. These practices areendemic in the tobacco-growing industry but are particularly
acute where we don’t have a direct relationship with thegrowers or their employees. Processing and manufacturing
roles, particularly in high-risk markets and areas, also carryan inherent risk of low wages and long hours due to thedegree of informality and low skills these jobs may require.
Our Supplier Standards do not currently call for a living
wage but stipulate minimum standards for remuneration,and that remuneration must comply with local legislationand international conventions. While our Agricultural
Labor Practices (ALP) program includes initiatives at theagricultural and supply chain levels to promote paymentof a fair wage and respect for working hours, one of theareas that we will be looking at in the future is how local
JTI entities can introduce more formalized policies andprocesses that address the levels of wages and working
hours at our direct growers while also helping growers in
our wider value chain to do the same. This may include
informing ourselves of the current wage gap between theactual wages of the lowest-paid and the rural living wage
per region and the tools we can deploy to help our
growers and suppliers progress towards payment ofa fairer wage.

ENGAGEMENTTOWARDS 2030

JT Gr
o

SALIENT ISSUES

Sup

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location
Co

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ply

3. Fair wage

STRATEGYn s u m er

“One of the fundamental human rights is
the right to a just remuneration that ensures
an existence worthy of human dignity.
The preamble to the Constitution of theInternational Labor Organization (ILO)
identifies the provision of an adequate living
wage as one of the conditions for universal
and lasting peace based on social justice.”
Patrick Belser
ILO senior economist

JT Group Supplier Standards

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

3. Fair wage

Enhancing grower livelihoods in Zambia

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

In 2019, JTI Zambia undertook an assessment ofworkers’ rights on its directly contracted growers’ farms
in Zambia's Eastern and Western provinces. While thisassessment found significant improvements in relation
to child labor and the provision of Personal Protective
Equipment (PPE), it also highlighted some wages
for farm workers and a lack of written employment
contracts for those workers as areas of further focus.
Subsequently, a recommendation was made to conduct
a more detailed assessment to better understand theseissues, and in 2020 we commissioned twentyfifty Ltd.,an internationally recognized human rights consultancy,
to undertake a Grower Livelihoods Assessment in
carefully selected pilot communities in Zambia from
where we source tobacco leaf.

The Grower Livelihoods Assessment
involved 184 grower interviews and engaged
291 people from our growing communities
through focus group discussions.
What JTI Zambia found was that the directly contracted
growers were on average earning well above a rural
living income of 14,000 Zambian Kwacha per annum
and that a significant proportion of our growers’ income
was non-tobacco-related (50% in Eastern province and
30% in Western province). It also became apparent that
more income does not always mean a better standardof living, and that the revenue we create within our
growing communities does not always lead to poverty
alleviation. Other poverty indicators such as a lack ofaccess to basic services and low levels of education
play a much more significant role.

6,614
Growers under contract withJTI Zambia

62
JTI Zambia Agronomy Technicians

87%
Growers average yields and income
increase since the introductionof an Integrated Production
System in Zambia

Integrated production system
JTI Zambia is committed to helping our
growers earn as much income from theiravailable hectarage as possible. JTI Zambia
directly contracts 6,614 small-scale growers(production area ranging from 1-3 hectares).
These growers are contracted to grow acustomized tobacco crop under our local
stewardship and are required to follow Good
Agricultural Practices and our Minimum
Agronomic Standards (MAS). In return, theyreceive credit for prescribed crop inputs(e.g., seed, fertilizer, Crop Protection Agents,
and PPE) as well as dedicated extension
service provision from our Agronomy
Technicians. This support includes
recommendations delivered through ascheduled visitation program for the durationof the crop cycle. JTI Zambia has a team of
62 Agronomy Technicians who look after
approximately 107 growers each. By enabling
growers to become more productive andefficient in growing, harvesting, and curing
tobacco leaf, JTI Zambia supports them inbecoming more profitable. The economic
benefit for all the directly contracted growers
who fully observe our local MAS program issignificant. Since introducing an Integrated
Production System in Zambia, our contracted
growers have seen their average yields andincome increase by 87%.
Market Match
The farming practices we apply in partnershipwith our directly contracted growers are
not limited to tobacco. We encourage ourgrowers to use seasonal crop rotations,
i.e., growing complementary crops such asmaize, groundnuts, or soya on the same landin alternate seasons. The benefits of this are
additional income, improved food security,and soil conservation.
To develop this concept further, we introduced
the Market Match program that links ourcontracted growers to viable global market
off-takers of non-tobacco commodity
crops. JTI Zambia spent the last two years
conducting groundnut field trials at its
Agronomy Development and Extension
Training (ADET) facility with a pilot groupof 713 growers in partnership with a large
groundnut off-taker based in the United
Kingdom. This partnership has flourished,
and JTI Zambia has received positive
feedback from both the off-taker and our
directly contracted growers. JTI Zambia
now has 1,895 growers participating in thisprogram and has plans to increase grower
coverage from 28% in 2021 to 50% for the2022 crop year.
In collaboration with the groundnut off-taker,
JTI Zambia provides input packs consistingof seed and inoculant to the growers, and thegroundnut off-taker delivers comprehensive
training on groundnut production to ourAgronomy Technicians, who then deliver
the training to our growers. After harvesting,the groundnuts are delivered to our buying
stations and are graded by the off-taker,
and shipped to their central facility before
export. Market Match in Zambia has deliveredon average an additional income of $439
per hectare, not to mention the agronomic
benefits derived from crop rotations andimproved soil fertility, which in turn improves

future crop yields and further increases
our grower’s income. Due to the successwith groundnuts in Zambia, the local teamis now exploring partnerships with market
off-takers of other non-tobacco commodity
crops and hopes to trial these at the local
ADET facility soon.
Next steps
While we are proud of the work that isbeing done locally to help growers become
more profitable, we are conscious there ismore that needs to be done, particularly
with farmworkers. The Grower Livelihoods
Assessment found a positive correlation
between spending on workers and net income
from tobacco. If a grower receives moreincome from tobacco and other crops, it does
not necessarily lead to higher wages for theirworkers. A more equitable solution also
needs to be found to ensure workers receive
a living wage. JTI Zambia is exploring waysof using leverage with its contracted growers
to encourage them to pay their workers
a fair wage and ensure written employment
contracts are in place. JTI Zambia has
also established a task force to look into
allegations of discrimination against migrant
workers in Eastern province.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

3. Fair wage
Case study – Tenant farming in Malawi

The legacy tenant farming system isprevalent in small-scale agriculture in
Malawi and can lead to conditions forpotential exploitation of tenants andtheir families by the landlord. These risks
include poverty pay and indebtedness,
hunger, and at times verbal or physicalabuse under practices that amount
to forced labor.

Tenants often originate from some of the mostvulnerable communities and districts in Malawi, often
landless families or individuals with high vulnerability
and low resilience in their home districts. These
challenging conditions contribute to the migrationof people seeking employment opportunities. Somepotential tenants borrow money or save to be able totravel and seek tenancy opportunities, others are fundedby middlemen or landlords. Many tenants enter thesystem expecting it to be a short-term solution to theireconomic challenges, but some remain as tenants forlonger than planned.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Tenant growers
Farming families are given access to land bya landlord through a contract (usually verbal)
to cultivate tobacco for the landlord tosell to a tobacco manufacturer or throughan auction. Tenants may come fromlocal communities but are more likely to
be migrants from other areas of Malawi.
Landlords provide different levels of support in
the form of basic food, household rations, andhealthcare during the growing season. The
tenant is provided with accommodation,although in many cases is required tobuild their accommodation in or close
to the field for crop security. Once thetobacco has been sold, a payment
relates to the tobacco produced for apredetermined price (there is a tenancy
pricing system set out in the industry
regulatory framework) with deductions
for rations and other items.

In 2020, the Decent Work Committee was established todesign and implement farm labor management systems
that ensure ILO Forced Labor Standards are being
managed at the farm level and are well documented.
The committee identified four initiatives that we believe
can help us and growers tackle these issues as follows:

1.

2.

Transition tenants onto employment
contracts with growers using atemplate that satisfies the Malawi
Employment Act, such as pay above
minimum wage
Implement a fair and transparent
wage system that provides workers
with payslips and documents proof of
payment from the contracted grower3.

Run a series of workers’ rights
awareness campaigns
that target employees,
contracted growers,
and their workers

4.

Revise thecurrent grievancemechanism to bettertarget farm workers andcollaborate with Districtof Labor Offices on-farmlabor inspections

JTI Malawi has a commitment to work towards growers
removing tenancy from the supply chain. By September
2021, the local team is quite confident that all growers
who have farm workers will have written employment
contracts in place.
According to a recent study by the Centre for Social
Concern (CfSC), tenants provide the largest labor
inputs on tobacco farms in Malawi, accounting for
63% of the required labor force to produce tobaccoand prepare it for sale.
With an estimated 1.5 – 2 million people working
in tobacco cultivation in Malawi, this equates tothe potential of around 1.3 million tenant growers.
The scale is significant and will take many years
to understand and resolve.
JTI Malawi’s progress in eradicating
sourcing from landlords using tenants
and transitioning tenants onto wage
and employment contracts is a big
step forward.
There are also concerns that immediate
abolition could cause further harm
to tenants who are some of the mostvulnerable people in the country.
Abolishing the system without
a viable alternative solution
risks leaving tenants in a worse
position than before. The local
team is conscious of this andworking with rights-holders, NGOs,
government, and public bodies toformulate solutions.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENT

According to the International Labor Organization (ILO),
approximately 40.3 million people live in modern slavery,
and of these, 24.9 million people are in forced labor,
with 15.4 million people forced to work under threator coercion in the private economy worldwide.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We do not tolerate modern slavery in anyof its forms, such as forced labor, slavery,
servitude, and human trafficking, and weare committed to tackling it through a range
of initiatives, including our global humanrights program.
In 2021, we published our fifth Modern Slavery Act
Statement approved by the Board of Directors at JTI
UK and prepared in accordance with Section 54, Part 6of the Modern Slavery Act 2015 by JTI UK. It sets out
the steps taken to respect human rights and prevent
modern slavery in our business and supply chain.
The Modern Slavery Act reporting requirements apply
to the UK, but the whole of JTG abides by the principles
set out in the Statement.

JT Gr
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Case study – Extreme Breach procedure
Extreme breaches are the worst violations of workers’ rights
such as slavery, forced labor, worst forms of child labor, humantrafficking, violence, or severe physical, mental, or sexual abuse.
The concept is based on ‘protect the victim and rapporteur’principle and focuses on topics that an Agronomy Technician
should not discuss with a grower but report via a secure
mechanism in case of suspicion that an incident exists.
Starting the concept in 2017, we shared a guidance document
across the leaf supply base and held a series of webinars
on rights of workers and extreme breaches to ensure our
suppliers understand the new procedure. We also explained the
management process of how to respond to an extreme breachto ensure that action is taken promptly and appropriately whenindicators of an extreme breach are observed. The three key
elements that are included in the extreme breach management
process are the following:

1.

Protection for the victim and observer

2.

A clear escalation route andremediation plan3.

Access to specialist support

ILO statistics on forced labor
JTI UK Modern Slavery Act Statements

up

chain
ply

4. Forced labor

TOWARDS 2030

We expect each supplier to have in place an extreme breaches
management process that incorporates these three elements.

24.9m
People in forced labor

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

4. Forced labor

Responding to an
extreme breach
Each supplier needs
to establish a process
for responding toobservations or indicatorsof extreme breaches.
The supplier should
train its Agronomy
Technicians and others
who visit farms on
extreme breaches andthe management process
to respond to them.

Example of an Extreme Breach management procedure

1

2

3

4

5

6

Observeextreme breach

Determine if single ormultiple instances

Identify external
support required

Agree a response
plan with the
General Manager

Develop remediation
plan withexternal parties

Track
remediation

Contact list of
authorities and others

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

6 hours“When working together with our contracted growers andleaf merchants, we are focused on continuous improvement.
But there are issues that are simply not acceptable in our leaf
supply chain, such as any form of slavery or human trafficking.
Our Extreme Breach procedure is one of the tools to support
the entire supply chain in the best effort to eliminate or
prevent negative human rights impacts.”

72 hours

14 days

Driving change throughout the industry
The Extreme Breach concept was developed uniquely
by JTI with the support of twentyfifty Ltd. Since 2017,
we have been working on integrating this concept to all
our third-party leaf suppliers and JTI local entities. We
want to create systemic, transformative change in how
people are treated and share this concept more widely.

The Extreme Breach process is in place to add an
additional mechanism to our existing ALP and SCDD
concept to ensure that any unacceptable practices arelooked at with special attention and that both potential
victim and rapporteur are protected.
twentyfifty Ltd.

In 2020, the Extreme Breach concept
was accepted by the Sustainable Tobacco
Program (STP)1 members and embeddedin the Human and Labor Rights sectionof the STP. It has now become an integral
element of this industry-wide program.

Vuk Pribic
Leaf Supply Chain Due Diligence Director, JT International S.A.
1

Sustainable Tobacco Program (STP) is an industry-wide platform enabling businesses to collaborate on human rights and environmental issues.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

4. Forced labor

Reducing the risk of exploitation of workers in the
supply chain by recruitment and employment agencies

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

As stated in the ILO C181 Convention of 1997, workers
should not be charged recruitment fees nor any related
costs for finding work – ILO General principles andoperational guidelines for fair recruitment and definitionof recruitment fees and related costs. Migrant workers
are especially vulnerable to exploitative recruitment
and employment practices. When recruitment fees arecharged, workers often end up indebted to the recruiteror the employment agent. In addition, failure to repay
these fees can have severe consequences whereby
workers can be exploited by the employer, for example,
through working long hours or having wages deducted.
These debts coupled with job and residency insecurity
leave foreign and domestic migrant workers particularly
vulnerable to modern slavery.
Through our remote human rights due diligence in 2020,
we have been working to extend the requirement that
suppliers adhere to the ILO core labor standards andstrongly prohibit third parties from charging recruitment
fees. Ensuring responsible recruitment and employment
practices protects migrant workers before they leave
their country of origin to be less vulnerable at theirdestination. Eradicating recruitment fees for migrant
workers is a core part of protecting the global workforce
from modern slavery.
In South Africa, Colombia, and Morocco, the business
identified third-party recruitment and employment
agencies that did not include a clear prohibition clause
to charge recruitment fees. In these markets, we areworking to drive greater awareness of the JT Group
Supplier Standards and ensure specific clauses areinserted into contracts that prohibit the agency fromcharging illegal recruitment fees.

Case study – Migrant workers in Japan
Japan’s Technical Intern Training Program wasfurther sensitized to the risk of forced labor by arecent US Trafficking in Persons Report. This material
is especially relevant to our processed food business,where the majority of our non-Japanese employees
work. The local business employs technical interntrainees in very small numbers, as well as overseas
students indirectly, who have also been classified
as vulnerable workers.
Our Japanese headquarters has improved the local
corporate guidelines that apply to all subsidiarycompanies of Japan operations. The aim is to address
the potential risks related to migrant workers, identified
as the most vulnerable group through our HRIAs.
The number of migrant workers in Japan has
increased rapidly in the past few years, accelerated by
the revised immigration law. Consequently, there wasa need for common guidelines regarding the hiringand labor management of migrant workers across all
business units in Japan, in alignment with international
norms and the UN Guiding Principles.
Guided by JT Group Human Rights and SupplierStandards policies, the local business has prioritized
its engagement with employed migrant workers
through ongoing HRIAs, SAQs, and direct interviews.
To date, no incidents of forced labor have beenreported, but we remain vigilant to the possibility,
especially in our extended supply chain.

ILO C181 Convention

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INTRODUCTION

At JTG, we embrace diversity and promote a safe and inclusive
workplace where everyone can be themselves at work without
risk of discrimination or harassment.

Our Code of Conduct clearly states our zero-tolerance
approach to harassment. Disrespectful behavior
and harassment of any form are against JTG values,
and we have a duty to ourselves and one anotherto act if something is not right.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

JTG is committed to create and maintain a workplace thatis free of harassment in any form, where the company andits employees respect one another’s integrity and dignity,
the privacy, and the right to equity in the workplace.
We continue to provide training on Harassment Prevention
to employees. In our Japanese operations, JT and all subsidiarycompanies have been updating the Harassment Guideline tomeet the standard of the latest Japanese law. In addition, we
have provided online harassment training courses for employees,
and 99.8% of employees have completed the training in 2020.
As part of JTI’s continuous efforts, a global harassment training
curriculum was rolled out in 2020. This addressed various formsof harassment through four videos and guided employees on
how to address this sensitive issue.

SALIENT ISSUESENGAGEMENTTOWARDS 2030

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5. Harassment and gender impacts

STRATEGYJT Gro

CONTENTSn s u m er

The four types of harassment displayed in the videos were thefollowing: sexual harassment, moral harassment, disrespectful
behavior, and abuse of power. While identities, places, andall personal details were changed for confidentiality reasons,the videos were inspired by real JTI cases to give employees
the opportunity to put themselves in the shoes of someone
experiencing a difficult situation at work.
With subtitles in 25 languages, the videos are available to all
employees and have proven to be an effective tool.
Compliance and Employee Engagement Survey
In our Japanese operations, we conduct a Compliance survey
every year to check and monitor workplace status about
Compliance. In 2020, the survey results showed that Harassment(including sexual harassment and bullying) is one of the mostimportant concerns for employees. We will continue to makeevery effort to improve the situation by providing support andtraining to employees.

86%
JT Group employees think that employees
are treated with respect in their localorganization regardless of their job

An employee engagement survey was undertaken at ourinternational tobacco business in 2018. Harassment was not
identified as an issue. The survey showed that 86% of employees
think that employees are treated with respect in their localorganization regardless of their job and that 90% of employees
think that people in their work environment behave in a mannerconsistent with the company Code of Conduct.

We take the risk of harassment seriously. We
endeavor to ensure that there are measures in place
to prevent incidents of harassment arising. This
provides employees with assurance that if they feelthey are the victim of harassment, there are adequate
mechanisms in place for them to alert us so thatthese incidents can be investigated and, whereappropriate, remedy can be provided.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

5. Harassment and gender impacts
Case study – Ethiopia

During the Human Rights Impact
Assessments (HRIAs) and Supply Chain
Impact Assessments (SCIAs), the focus onvulnerable groups is paramount. We seek
to identify how different rights-holders,
particularly women, may be experiencing
negative human rights impacts due tosystemic and structural issues arounddiscrimination and gender norms.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Findings from HRIAs in 2019
Gender discrimination and violations of women’s rights
are unfortunately not uncommon in Ethiopia and also
occur in the agricultural sector and in tobacco growing
and processing. During an on-site impact assessmentof JTI Ethiopia’s operations in the country in 2019, it
was found that there is a high risk that women’s rights
and health may be harmed with sexual harassment
and gender discrimination identified as particularrisks. A reluctance to report these potential issues tosupervisors or Human Resources was also identified
due to cultural and accessibility burdens.

“I had several incidents that
I was afraid to tell anyone.
I feared retaliation andlosing my job. But it’s adifferent story now. I am
able to open up and sharenot just an incident but
general feedback I have.
I’m also very happy tosee colleagues from thewomen association talking
to us, asking us about ourwellbeing and anything
we need in our work.
They support us. And now
it’s easier to communicate.
We are pleased that thecompany brought thesethings. We feel supported
and protected.”
Bezawit Bogale
Working in different roles for JTI
Ethiopia over 8 years

Response from JTI Ethiopia:• Your Voice reporting concerns mechanism andCode of Conduct campaigns were organized forall employees, particularly in our tobacco-growing
operations. They included a focus on zero tolerancewith regards to harassment in the workplace.
• All employees were trained in small groups andprovided with locally adapted booklets.
• JTI Ethiopia conducted
meetings with the Labor Union
to ensure full alignment.
• In addition to the Your Voicereporting concerns mechanism,
JTI Ethiopia implemented
a local grievance procedure
designed for daily workers.
The speak-up channel
encourages daily workers toraise any workplace concerns
in confidence and without fear.
• Local management assigned
specific responsibilities for
managers and supervisors
to prevent occurrencesof harassment.
• A training program wasdeveloped for supervisors on the
Code of Conduct and Your Voice.
• JTI Ethiopia created a womenassociation focusing on humanrights and gender equality.

“We already see the benefitsof these efforts. Changing
the mindset of employees
towards our purpose wascrucial. We had to showcaseand gain the full belief of
employees that we cared.
Employees have started
to talk about this problem.
In the past, it was taboo.
Now, women share with lessfear. This foundation led
to an openness to change
at an individual level anda cultural shift throughout
the organization. It is along journey that requires
a cultural shift for both men
and women, and we havestarted building the base.”
Hristina Kancheva
People and Culture Director for JTI Ethiopia, speaks
on progress made in our quest to promote genderequality in our operations in Ethiopia• As part of the ongoing efforts
in this respect, a further Your
Voice training was deliveredin Ethiopia in May 2021.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENT

In line with our vision of zero workplace injuries,
our global health and safety mission is to provide
leadership in the development and implementation of
global standards and programs to properly manage
and mitigate health and safety risks arising from ourbusiness activities, build awareness, and develop
a sustainable safety culture across the business.

We focus on creating safe workplaces,building safety competence, and developinga group-wide safety culture.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Our standards on health and safety usually exceed
legal requirements, and their scope extends beyond
our employees to cover contractors and visitors to ouroperations. Our wellbeing programs often also include
employees’ family members.
We have processes in place to identify and minimizerisks, prevent incidents, and continuously improvesafety. We work to prevent occupational healthhazards such as exposure to noise, dust, hazardous
chemicals, and ergonomic risks. We make sure that
health and safety standards are respected when
designing work processes, machinery as well as
in the organization of work.
We ensure healthy work environments bysetting up specific microclimates andmonitoring them. This typically includes air
quality, temperature, and humidity, as wellas making sure that proper lighting isprovided, based on the tasks to be carriedout. We also promote safe and healthy
behaviors through dedicated training
and communication campaigns.
We run different programs to help protect
the health of our employees while at work.
In addition to protecting them from

JT Gr
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endemic diseases, we also have a number of initiatives
in place to support their wellbeing.
We recognize that healthy employees promote a highperformance both for themselves and our business.
One example is the BeWell program, running at our
St. Petersburg factory since 2016. This program hasreached some 1,300 employees and is focused on
maximizing an employee’s potential, improving financial
literacy, encouraging a healthy lifestyle, and promoting
a sense of community and belonging.

We have set up a governancestructure to monitor the
implementation of policies
and procedures.

COVID-19

2.

In 2020, responding quickly and effectively
to the Coronavirus pandemic has been
our top priority. We have taken every
possible measure to ensure the safetyof all our employees, their families, andthe communities, in which we operate,
while mitigating the potential disruption
to our business.

We have fostered an agile approachwith increased collaboration
across risk functions using newtechnologies and tools.

3.

We have ensured a constant flow of
information provided to employees.

Since the outbreak of the COVID-19 in December 2019,a number of different measures have been implemented
to reduce the impact of COVID-19 on our employees,
contractors, and the communities in which we operate
and ensure our business continuity.
We have taken a risk-based approach, considering thefollowing: the level of exposure to COVID-19, infection
growth rates, local operations structure, state of medical
infrastructure and facilities, and national regulations.

n s u m er

This approach enabled us to identify the highest
risks to our company and making them the priority
for the development and implementation of policies,
guidelines, and controls.

1.

The pandemic has increased our safety exposure,as the organization focused on COVID-19 and reduced
the attention given to other areas of risk. Despite
the challenge, we have been able to improve oursafety performance.

Sup

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ply

6. Health and safety

TOWARDS 2030

In addition, our international tobacco business
offered online health and safety training to more than
7,500 people. We provided extra training on specificrisk assessment and control measures for 590 healthand safety leaders. This training was also available
to employees at a higher risk of exposure, including
members of salesforce, cleaning and hygiene staff,
and security guards.

7,500
Employees that followed
the health and safety training online

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6. Health and safety

Prioritizing mental health

LifeWorks App and health portal site Pep Up1

The coronavirus is not only a risk for ourphysical health. It also affects our mental
health and emotional wellbeing. It is
normal and understandable that people areexperiencing fear, anxiety, and stress in thecontext of the COVID-19 pandemic, and it
is paramount that we as a company ensure
our employees are in the best emotional
health at this challenging time.

The LifeWorks App and health portal site Pep Up provides our employees with an interactive tool witheasy access to keep up to date with the latest news, wellness content, and guidance: articles, videos,and podcasts on body, mind, personal finances, relationships, and work.
During 2020, we have also worked on the development of our Health and Safety (H&S) Academy,a tool that will provide a consistent solution to clearly defining H&S competency and capability
requirements within JTG and it will also deliver effective H&S training and development programs
while ensuring continuously improved H&S competencies and capabilities within the organization.
Our ability to ensure safe workplaces of all kinds, from farms to factories and beyond, is key tobuilding a sustainable future.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Our programs support employees toaddress the challenges they face at workand home. Employees can access a wealthof wellbeing resources and personalized
wellness programs and tools while forming
communities and giving back to society.

Our approach to health and safety is inherently intertwined with our sustainability approach. Providing
a safe, healthy, and comfortable working environment leads to happier, more engaged, and ultimately
more productive people. This has a knock-on effect on communities in a more general sense, reducing
the burden upon society.

LifeWorks Employee
Assistance Program1
LifeWorks EAP is a confidential support
service that can help our employees and up
to five members of their family address awide range of life issues and challenges.
It provides generic information on
mental, physical, emotional, andfinancial wellbeing with 24/7 accessto phone consultations for work-life
strategies, referrals to counseling, andconnections to community agencies.
It is a free, confidential, and voluntary
service offered outside the officeenvironment and available 24/7/365.

1This applies to our international tobacco business.

Whether it is in our offices, our warehouses, or on the fields of the tobacco growers we work with, safety
is of the utmost importance to us. For this reason, we aim to build a future in which workplace injuries
are considerably reduced.
Target on recordable injury rate reduction (baseline year: 2015)
2023

2030

25%

50%
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6. Health and safety

Our health and safety performance as a Group
Our recordable injury rate has declined 58.9%, from0.72 in 2015 to 0.30 in 2020. In 2019, our international
tobacco business recorded a Global Recordable Injury(RI) rate of 0.27, one of the best in our industry andone of the lowest among our fast-moving consumer
goods peer group.

58.9%

“I feel a great sense of pride in what we have achieved this year. As much as 2020 has been about change
and adapting to the waves of the COVID-19 epidemic, Corporate H&S remained focused on protecting
our employees, their families, and the communities in which we operate. As we move through and out of
COVID-19, we will continue focusing our efforts in managing and mitigating H&S-related business risks,building awareness, and developing a sustainable safety culture across the JTI business.”

Recordable injury rate
decline from 2015 to 2020

Alicia Olo Martinez
Director, Global Health and Safety, JTI

We regret that 3 employees died as a result of work
accidents in 2020. We learn from every accident andremain committed to achieving zero fatalities.

2015

2016

2017

2018

2019

2020

Employees

1

2

0

1

1

3

Contractors

1

1(only JTI)

2

0

0

0

Lost-time injury rate
(per 200,000 working hours)

Employees

0.34

0.39

0.37

0.24

0.23

0.16

Occupational illness rate1(per million working hours)

Employees

0

0

0.08

0.02

0.01

0.37

% of cigarettes and tobacco-related factories
certified to ISO 45001 (OHSAS 18001)2

78.9%

77.8%

74.4%

76.9%

79.5%

70.0%

Number of vehicle accidents3

1,122

1,151

66

85

71

64

Vehicles accident frequency rate3(excludes property damage, accidents per million kilometers)

4.84

3.87

0.23

0.21

0.16

0.19

2015–2020 evolution

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Number of fatalities

1

Data scope: 2015: only JT. 2016 and 2017: JT and Japanese domestic Group companies. From 2018: the entire JT Group. 2020: the increase from 0.01 in 2019 to 0.37 in 2020 is due to COVID-19 work related cases. Read more about our data scopes and external verification.

2

Data scope: 2020 only JTI.

3

The number of vehicle accidents and the vehicle accident frequency rate in 2015 and 2016 include damage to property, because the data is not available in our international tobacco business. The data in 2015 covers only our international tobacco business. From 2016, it covers JT and JTI.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

6. Health and safety
Case study – Driven by safety6

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

The number of deaths on
the world’s roads remains
unacceptably high, with anestimated 1.35 million people
dying each year. Work-related
incidents make up 25% – 30%of the road toll worldwide,
rising to 50% if commuting
is included.

With a fleet of more than 24,000 vehicles operating in morethan 67 countries and over 300 million kilometers driven in
2020, driver safety is a key concern area for JTI. Increased
numbers of drivers and riders, poor road conditions,sub-standard vehicle maintenance, poor driver training
and overall traffic conditions, including driver behavior,
result in an increased number of incidents and fatalities.
We have been implementing a motorcycle safety program
in countries with a high vehicle accident rate (Zambia,
Malawi, Tanzania, Bangladesh) since 2016, and wehave since achieved a 50% reduction in work-related
injuries. Furthermore, in 2019 we rolled out a new driversafety policy and implementation guidelines across ourinternational tobacco business, requiring all local offices
to conduct a risk assessment to identify high-risk drivers
and send periodic progress reports and action plans to
our headquarters in Geneva. Given the growing number offemale employees, the policy now also includes maternity
protection. In 2020, some 1,450 drivers and riders
benefited from the Driver Safety Program.

Driver safety severity rate
(per million km driven)

0.34

Our driver safety high severity rate (per million km
driven), which covers road accidents with humanimpact, has declined in 2020 to 0.11 (from 0.19 in 2019),
as shown in the graph to the right.

0.23
0.21
0.19

+24,000

0.20

0.13

0.11

0.10

JT Group operating vehicles

0.09+300m
Total kilometers driven in 2020

WHO statistics on road traffic injuries

0.04
0.03

Total
Markets

Americas

0.03

Asia
Pacific

2019

EasternEuropeWesternEuropeMENEAT

2020

ILO statistics on safety and health at work
6

This applies to our international tobacco business.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

6. Health and safety

Health and safety at the farm level

Green Tobacco Sickness (GTS)

Our Agricultural Labor Practices (ALP) provide minimum standards forour contracted growers and tobacco leaf merchants in relation to childlabor, respectful working conditions, and workplace health and safety.

GTS is a condition that can be caused
as the result of absorption of nicotine
through skin when handling wet green
tobacco leaves, especially during
the harvesting process. It is a formof nicotine poisoning.

There is a shared responsibility to establish a safe and healthy working
environment. International recognition of such responsibility is reflectedin the ILO Convention 184. The grower is expected to apply reasonablemeasures for creating and maintaining a safe, healthy, and injury-freeworking environment and ensure the wellbeing of workers.

As GTS is linked to exposure tonicotine, the following safety practices

and harvesting fundamentals arecommunicated with tobacco growers
on a regular basis.
We recommend wearing a long-sleeved
shirt during reaping and include gloves,
as part of our PPE in grower input packs,
in both Malawi and Zambia. As partof our training, we also recommend
contracted growers and their farmworkers to avoid wet tobacco andwash their hands after harvesting to
avoid possible GTS. GTS is coveredin our ALP program, in which we statethat “the grower should ensure thatworkers understand the risks of Green
Tobacco Sickness and apply reasonablemeasures and practices to prevent itin accordance with recommendations
provided to contracted growers.”

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Avoid green tobacco sickness rules:

Avoid harvesting
when leaves are wet
Wear long sleeved
shirts or raincoats
Wear gloves
Wash hands withsoap and water
after handling
tobacco leaves
Agricultural Labor
Practices (ALP) program
ILO Convention 184

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

6. Health and safety

Crop Protection Agents (CPA)
Agriculture-based raw materials form the mostsignificant part of our products. In line with other valueadded agricultural products, leaf tobacco production
requires the adoption of appropriate crop protection
practices as part of a holistic Integrated Pest
Management (IPM). IPM-based practices allow
minimization of Crop Protection Agent (CPA)
usage that may be required to secure the desired
quality, yield, and integrity of raw leaf.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We promote the adoption of IPM crop protection
strategies and the responsible use of CPAs
in accordance with the Food and Agriculture
Organization of the United Nations (FAO) Good
Agricultural Practices (GAP) and in compliancewith relevant national and international regulations.
The wider principles for the use of crop production
inputs, such as CPA, is already well establishedin our leaf sourcing areas. Our commitment to
responsible CPA usage and the control of residues
is defined in our Good Agricultural Practices Protocol
and the Corporate Policy on Crop Protection AgentsResidues Testing of Tobacco for the Manufacturingof Tobacco Products.
We are also committed to the transparency of thepractices implemented throughout our tobacco supply
chain. Our overall objective is to ensure that raw leaf isgrown and procured in a sustainable way, respecting
the environment and raising economic prosperity in ourcontracted farming communities.
Our responsible use of CPAs and control of residues
is focused on and initiated through activities andprocesses in five main areas:

1. Leaf tobacco production

3. Scientific collaboration

The use of less hazardous CPAs by our contracted
growers is recommended and augmented in certain
circumstances through the supply of customized
growers’ input packs with only selected CPAs andPersonal Protection Equipment (PPE) in our verticallyintegrated tobacco production countries. Local JTG
entities provide training sessions to its Agronomy
Technicians and contracted growers on correct CPA
application, handling, disposal, and PPE usage. Beyond
the scope of our vertically integrated operations, we
collaborate with our third-party tobacco suppliers oncorrect CPA usage, residue minimization, and associatedlabor practices. The initiative to eliminate WHO-FAO
Highly Hazardous Pesticides (HHP) and replace themwith less hazardous product options is in progress.
Currently, more than 90% of the tobacco volume
purchased by us is free of quantifiable residue levels of
HHP (WHO Hazard Class 1). We are aiming to complete
the phasing out of all CPAs in this HHP category fromour tobacco supply chain by the end of 2021.

We maintain active participation and leadership position
in CORESTA in all aspects related to crop protection.
CORESTA is fully committed to responsible andsustainable tobacco production and is the scientificand good practices reference for the tobacco industry.
We believe in a common, harmonized approach thatinvolves all stakeholders committed to sustainable andresponsible tobacco production worldwide.

2. CPA residues analysis
Tobacco produced by our contracted growers is
sampled and tested each growing season to permit
the identification of potential challenges and subsequent
adoption of improvement measures. Packed tobaccolots intended to be purchased from our directly
contracted growers and third-party suppliers are alsosystematically screened for CPA residues and either
accepted or rejected prior to entering our supply chain.
Tobacco lots with CPA residues detected above theestablished JTI Standard are not purchased. As a result,the number of CPA detected has decreased over theyears and shifted to newly available alternatives to HHP.

4. Engagement with local authorities, institutions,industry associations, and research organizations
Our experts conduct sector-focused meetings andworkshops to address CPA-related challenges withthe objective of raising awareness and implementing
and/or encouraging initiatives oriented towards GAP
and ALP aspects.
5. Supply Chain Due Diligence (SCDD)
SCDD is a continuous improvement process comprisingof five steps: Identify, Prioritize, Respond, Measure, andReport. The ALP program is integrated into this process.
Whenever CPA-related challenges are mapped as apriority, leaf suppliers are encouraged to address thosechallenges. An example of that is the ongoing dialogue
on HHP elimination between CPA experts and industry
stakeholders. Finally, when local JTG entities run Supply
Chain Impact Assessments on the ground (series
of interviews with rights-holders and other relevant
stakeholders), CPA-related challenges are in the scopeof the assessments.
Good Agricultural Practices Protocol
CORESTA46

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

6. Health and safety
Case study – Using leverage with our tobacco merchants in Zimbabwe

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICEIn May 2018, industry stakeholders,
including ourselves, received a letterfrom the United Nations Office ofthe High Commissioner for Human
Rights that highlighted several
alleged human rights violations suchas child labor, health and safety,
and a variety of labor rights abuses
in tobacco growing in Zimbabwe.
Although we have no direct operations in
Zimbabwe and only purchase tobacco leaf
through leaf merchants (third-party suppliers),
we were still connected through our business
relationship. The JTI purchasing entity used
its commercial leverage with the suppliers to
reduce the risk of harm occurring. Therefore,
we worked alongside some of our biggest leaf
merchants: Alliance One International, Inc.
(AOI), Premium Tobacco International DMCC
(Premium), Universal Leaf Tobacco Company,
Inc., and CONTRAF-NICOTEX-TOBACCO GmbH,to encourage them to adopt and align theirprocedures with those promoted by the United
Nations Guiding Principles on Business andHuman Rights (UNGPs), and where necessary
to change their business practices globally rather
than only in Zimbabwe.

All our suppliers engaged positively and madethe following proposals and commitments:• Eliminate the use of the most hazardous
pesticides to human health – Highly
Hazardous Pesticides (HHPs) Criteria 1 – by
the end of 2021
• Develop a human rights policy approved at
the most senior level of their organization andmake it publicly available• Formalize the Tobacco Leaf Exporters
Association of Zimbabwe (TLEAZ)
sustainability sub-committee to include humanrights-related issues/concerns and establish
a working group to look into the developmentof an industry-wide grievance mechanism• TLEAZ Agronomy Sub-Committee has
been formed, with a mandate that includes
sustainability topics• Formation of a Sustainability Sub-committee
is under discussion• Six salient issues were collectively identified
in order to focus on primary efforts:
health and safety – exposure of workers
to CPAs; land rights; child labor; gender
discrimination; freedom of association; andenvironmental impacts• A number of the above-mentioned salientissues have been raised to the TLEAZ
Committees and an agreement reached toengage government as an industry via TLEAZ
to effect change and improve regulation, e.g.,ensure all licensed tobacco leaf contractors
in Zimbabwe follow the same high standards• Agreement to explore the developmentof minimum industry standards inrelation to adequate personal protective
equipment in Zimbabwe
We also engaged in open dialogue with the
Zimbabwe Ministry of Labor, the Tobacco
Industry and Marketing Board, the Tobacco
Research Board, and the National Employment
Council for Agriculture and Tobacco.
Tobacco leaf merchants provide regularprogress updates about the commitments
made, and we continue to work together withthem to ensure the best possible outcome
for those impacted.
Read the full correspondence with the United
Nations Office of the High Commissioner
for Human Rights.

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Tobacco products carry risks to health. These risks
distinguish tobacco from most consumer goods andplace upon the tobacco industry a real responsibility
to communicate these risks to consumers. Our
approach is to present this information in an open
and transparent manner.

We are committed to enabling adults
to make an informed decision before
using our products. We also believe inthe freedom of adults to choose whether
they want to smoke or vape and that noone should do so unless they understandthe risks.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We are communicating openly about the healthrisks of our products and are committed to playing
a full role in youth smoking prevention. This isa responsibility for which we expect to be held
accountable, together with governments andthe rest of society.

STRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

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7. Health risk

INTRODUCTION

JT Gr
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CONTENTSn s u m er

We recognize that cigarettes are a legal but
controversial product. People smoke for pleasure,but there are real risks that come with that pleasure.
Accordingly, we believe that tobacco products should
be appropriately regulated. We take seriously the way
we market our products and do this in a responsible
way, complying with all local laws.
We are investing in developing products that do not
involve combustion and do not produce tobaccosmoke. In line with an increasing number of scientists,
we believe that non-combusting products have thepotential to reduce the health risks associated withsmoking. We are committed to bringing to market
RRP (Reduced Risk Products1) that meet consumer
expectations. We provide information acquired
through scientific assessment about these products.
We think that minors should not use either
combustible tobacco, vaping products, or any otheralternative products. This is central to our Code of
Conduct, our marketing principles, our operational
policies, and the way we do business.
See our position on smoking and health.
See our JTG Tobacco Principles.

1

Reduced-Risk Products (RRP): Products with the potential to reduce the risks associated with smoking.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

7. Health risk

Case study – IDentify

Case study – No ID, No Sale!
JTI UK helps fund the ‘No ID, No Sale!’ campaign,
which provides retailers with materials and advice
to prevent underage sales and reminds shop staff
and younger consumers that valid proof-of-age isrequired when buying tobacco and vaping products.
More than a quarter of a million ‘No ID, No Sale!’packs have been distributed to retailers since thebeginning of the campaign in 2004.

Marketing

We maintain robust policies andprocedures around sales and marketingof tobacco and vaping products, inaddition to clear disclosures aroundthe impacts of smoking through various
communication channels.
We are committed to marketing our tobacco
products and brands responsibly.
All marketing activities are based on the JTG’s four
Global Tobacco Marketing Principles:

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

1. Minors should not smoke and should not be able
to obtain tobacco products.
2. We do not market our products to minors nor
encourage anyone to take up smoking or discourage
anyone from quitting.
3. We market our products to adult smokers to maintainbrand loyalty and to encourage adult smokers ofcompetitor brands to switch to our products.
4. Adult smokers should be appropriately informed
about the health risks of smoking before they makethe decision to smoke.

We apply these Global Marketing
Principles in all jurisdictions, especiallywhere applicable laws and regulations areless strict, do not deal with the particularissue, or do not exist.

JTI UK funds a youth access prevention program called IDentify in the UK. This is a complianceprogram designed to support small and independent retailers with the same kind of training that large
supermarkets use.
Retailers are mystery-shopped to check whether they ask to see proof of age of younger-looking
customers. Those retailers who do not ask to see a valid ID are not operating the bestpractice Challenge 25 proof-of-age policy, which is recommended by JTI and enforcement
bodies like Trading Standards. These retailers are said to be ‘at risk’ and are offeredaccredited training from qualified trading standards officers in the preventionof underage sales.

JTG Global Marketing
Principles – in practiceDuring our HRIAs with
BSR, we reinforce therequirements of JTG
Global Marketing
Principles withboth JTG sales
representatives
and third-party
brand ambassadors
who promote our
products. We observe
their practices in thefield, review their scriptand support materials,
and check compliancewith the JTG Global
Marketing Principles.
Through mystery
shopper tests, we checkfor deviations from theMarketing Principles
key messages. During
our assessments, wefound no deviations
and that these sales
representatives andbrand ambassadors only
engage with consumers
who are current smokers
or vapers and always
ask for age verification
to ensure they do notsell to minors.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTAt JTG, we believe each individual should betreated with respect and dignity and lead their life
enjoying personal freedoms of choice, thought,
expression, and to be their own selves. That is
why we strive to provide a safe and inclusive
environment within our premises and across ourbusiness relationships. Our aim is to ensure that
individuals feel comfortablein their surroundings,
knowing that their
human rights arerespected andfreely enjoyed.

For us, diversity is about recognizing differences,whether it be age, gender, self-identification,
sexual orientation, disability, ethnicity, religion,or nationality, as well as experience and expertise.
Inclusion is where these differences are valued
and used to enable all our stakeholders to thrive.
With a workforce that includes over 100 nationalities,
establishing a diverse and inclusive workplace isa top priority for us. We want all our
employees to feel valued and part ofour team, to enjoy their work, and to
perform to the best of their abilities.

We believe this brings a rich mix of viewpoints
and perspectives, which can inspire new ideas,lead to solutions to complex issues, and drive
our business forward.
Driving equality and change in a diverse globalorganization is a challenge as many diversity
and inclusion topics are interlinked with the local
political climate, society and cultural norms, andthe different readiness levels across the locations.

JT Gr
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8. Non-discrimination and equality

TOWARDS 2030

n s u m er

“Diversity, the state of being different, isn’t the same as
inclusion. One is a description of what is, while the otherdescribes a style of interaction essential to effective
teams and organizations. Diversity and inclusion havebecome absolutely essential. They are not just abstract
notions for me. I want all of our employees to benefit
from this and to be themselves all the time, everywhere.”
Christiane Bisanzio

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Vice President, Diversity and Inclusion,
JT International S.A.

To meet this challenge, our international tobacco
business has set up a dedicated diversity and inclusion
department focusing on 5 key pillars:

1.

Gender equality

2.

New ways of working

3.

LGBT+ Inclusion

4.

Wellbeing

5.

Race and ethnicity

For all the pillars, there are various actions that havebeen put in place, from global policies that focus
on equality to awareness trainings and workshops
across the world.
Read more on the freedom to be yourself.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

8. Non-discrimination and equality

1. Gender equality

Our initiatives include the following:

2. New ways of working (N-WOW)1

Our mission is fostering the professional
development of women and getting more
women to the top.

1.1 Equal Pay Equal Opportunity

Enabling new ways of working is one of our key values,
and increasingly necessary in today’s world.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We make gender equality a formal business priority.
We are committed to relentlessly pursuing our goals
to increase the representation of women in
leadership positions in addition to reachinggender parity for all levels.
We are constantly trying to engage our
employees – both men and women – in orderto understand better where we stand and how
we can get to the gender equality vision of
our company. This is done via on-going focus
groups, roundtables, and most recently, theMAP program – Men Activating Progress. Whatboth women and men at our company want to
see is more equal opportunities for all, better
representation in our leadership roles,
and more male allies as we are all
together on the journey to equality.
The internal input is further
strengthened via our global
employee network – TogetHER.
We are investing in a numberof initiatives to accelerate
the advancement of womenand spark progress towards
gender equality globally. We
have a new Group-wide target
regarding the representationof women in leadership that is
to reach 25% by 2030.
Read more about TogetHER.

1This applies to our international
tobacco business.

JTI`s HQ office has been an EQUAL PAY certified
organization for three years in a row and is currently
running a process of extending the certification globally.
The Equal Pay commitments at JTI have been extended
to Equal Opportunity as well to address theunderlying causes and work environmentsfor preventing gender pay gaps.
1.2 AI for job descriptions
This measure undertakes the usageof data science to check and enhance
job descriptions in order to use
gender-neutral wording in the textthat is being published. It reveals
the hidden gender bias in the job
descriptions writing and suggests
alternatives so we can recruitfrom the widest possible poolof qualified candidates.

N-WOW represents a movement to boost flexibility and retention, largely by removing
many of the barriers and management styles of the past and bringing them in line witha modern multigenerational workforce. Some of our initiatives include the following:
2.1 Global family leave1
New ways of working also mean new ways of living. The line between work andprivate life is getting thinner as societies evolve and with that the motivation andthe needs of the workforce evolve. Our new family leave policy equalizes the career
opportunities of both men and women, as both should be enabled to take care of
their careers and their families. The policy establishes a global and inclusive familyleave benefit where all employees are eligible for up to 20 weeks of fully paid parental
leave, regardless of location, gender, or whether they become parents via adoption,
surrogacy, or birth.
2.2 50-25 meeting default
To facilitate a healthy transition between meetings, as well as address the needfor building a better work-life blend, we have set the default meeting duration setting
to change from 60/30 to 50/25 minutes globally for all employees. The window of
5-10 minutes between meetings might seem small, but it makes a big difference.
It should allow all of us to find a better balance in our busy agendas and run productive
and engaging meetings.
2.3 My generation
As part of N-WOW, we value the diverse perspectives that each generation brings
to the workplace and our communities. It is critical that the institutional knowledge
and historical views of our most tenured employees, our X-Factor community,
along with the progressive mindset of our emerging talent, our GENext community,
are all leveraged. Together we can create cohesion across generations and embrace
the multigenerational workforce as our strength and reality.
Read more about out family leave policy.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

8. Non-discrimination and equality

3. LGBT+ Inclusion

Supporting our LGBT+ employees is vital if we are to createa more equal company, in which everyone is empowered to be
and do their best.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

As part of our LGBT+ Inclusion pillar, we develop strategies, professional development
opportunities and LGBT+ inclusive policies to create workplaces that are inclusiveof all sexual orientations, gender identities, and gender expressions. Our strategy
encompasses a holistic stakeholder approach towards our community members,
allies, shareholders, and consumers.

3.1 Embassy model – International
modus operandi
There are three models of engagement
for international organizations in thematters of LGBT+ inclusion: ‘When in
Rome’, ‘Embassy’, and ‘Advocate’.
The best practice model to start withand the one JTI is positioned to use is
the ‘Embassy’ model. In the ‘Embassy’model, we create an open and inclusive
workplace internally for LGBT+
employees no matter the local context.
In locations where there are challenges
with being part of the LGBT+ inputs,
we provide anonymous support phonelines for the employees in thesecountries and secure and protected
access to LGBT+ content and resources.
3.2 Inclusive policies
This activity is the groundwork of the D&I
team, together with the other stakeholders
in P&C. Every policy should be doublechecked for its inclusivity. The policies
already covered (locally or globally):• Code of conduct andanti-harassment coverage• Family leave for same-sex
couples (adoption, surrogacy,or natural birth)• Partner healthcare insurance(local Swiss only)• LGBT+ Travel Safety Policies
and Guidelines• International Mobility
support policy
and the new definition of a Family.

3.3 OutNow workshops
To strengthen the knowledge of ourleaders and employees, we createda special format of a LGBT+ workshop,
together with OutNow – our expert
partner consultancy with over 25 yearsof work in LGBT+ inclusion. These
workshops were delivered in our HQ, aswell as in key locations around the world.
3.4 The UN Standards of Conduct
for Business Tackling Discrimination
against the LGBTI community

4. Wellbeing

We recognize theimportance of ouremployees’ wellbeing.
Everyone needs tofeel supported
and appreciatedto be productive
and engaged.

In April 2021, JT and JTI signed the
UN Standards of Conduct for Business
Tackling Discrimination against the
LGBTI community. In signing this pledge,
we join 300 other companies fromaround the world committed to tackling
LGBT+ discrimination, while becoming
the first tobacco company to commit
to the Standards.

We encourage ourpeople to develop
a resilient mindset
and healthy lifestylethat will boost
every aspect of
their private andprofessional life andlet them perform attheir best.

3.5 PRIDE ERG

Read more about ourapproach to wellbeingin health and safety.

JTI’s global LGBTIQ+ employee resourcegroup (ERG), PRIDE, champions peer
to peer support among employees,
grows the support of allies througheducational and inclusive activities, andworks with the business to create a more
equitable and inclusive JTI. New locallyled PRIDE chapters are opening across
JTI markets. To find out more about
PRIDE click here.
Read more about OutNow
The UN Standards of Conduct for
Business Tackling Discrimination
against the LGBTI community

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8. Non-discrimination and equality

5. Race and ethnicity

Our workforce includes over 100 nationalities, and weneed to create a workplace free from any discrimination,
where people can be themselves.
Our initiatives include the following:
5.1 Race and ethnicity masterclass
The race and ethnicity 90-minute masterclass is an intimate andcustom-made session that aims to create a safe space for learning
the basics of the dimension of race and ethnicity in the workplace.
Delivered by an external subject matter expert, it equips the participants
with the knowledge and awareness that can be applied in theireveryday lives.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

5.2 Race and ethnicity e-learning
The race and ethnicity e-learning is a self-learning
module that any of our employees can undertake inorder to better understand this dimension of Diversity
and Inclusion. Accessible via desktop and mobile,
it promotes equality and provides the fundamental
knowledge of understanding and recognizing the
aspects of race in the world.
5.3 EmbRACE
EmbRACE is our global employee network, dedicatedto the topic of Race and Ethnicity. Its objective is tosupport our journey to become a fully inclusive business,break the barriers, and create a safe environmentthat allows people of all races and ethnicities to thrive
and increase racial and ethnic diversity at all levelsof the business, including leadership.

Case study – Program ‘No boundaries’ in Russia

The Program‘No Boundaries’ isdedicated hiringof people withdisabilities andwas launchedwithin our Russian
business in 2016.

19
Employees with disabilities
employed at JTI Russia

Within the program, JTI Russia employed
15 external candidates with disabilities. These
employees were hired in various departments(People and Culture (P&C), IT, Sales, etc.)
at positions involving both analytical andadministrative skills. For recruitment purposes,
JTI Russia benefited from an external agency
specializing in the employment of people
with disabilities.
These employees are treated like every other
employee and are provided with the fullcompensation and benefits package. In accordancewith local Russian regulations, employeeswith disabilities have a reduced working week
(35 vs. 40 hours) and increased vacation forrehabilitation purposes. Where there are specificmedical conditions, a specialist company has
helped provide specially equipped working places.
The program proved itself successful, with the
majority remaining in employment after 2 years.
As a result, the program was incorporated into ourregular P&C framework, and JTI Russia continues
to hire employees with disabilities. Currently, in JTI
Russia, there are 19 employees with disabilities,
with 17 on permanent contracts.

Identifying vulnerable groups
One specific aspect of the UNGPs is that they expect
companies to pay particular attention to negative
impacts on vulnerable populations – those that may
be disproportionately affected due to their uniquestatus. Vulnerable populations can include women,
ethnic or religious minorities, disabled persons, LGBT+
communities, migrants and refugees, and more.
A central element of JTG’s human rights due diligenceprocess has been to identify vulnerable populations
in our value chain. During our HRIAs, we focus onunderstanding how their rights may be negatively
impacted in ways distinct from the general populationand subsequently tailor mitigation and remediation
strategies to meet the distinct needs of thesevulnerable groups.
Similarly, our efforts on Diversity and Inclusion aim to
identify and empower vulnerable and minority groups
within our own organization, including women, peopleof color, LGBT+ communities, disabled people, and more.
After the HRIA in Tanzania in 2018, the local team worked
to ensure better appropriate measures were in place
to meet the needs of People Living With Disabilities(PLWD) in the workforce. The team developed a strategy
and program to bring our operations in Tanzania into
compliance with the Convention of the Rights of People
with Disabilities. This included:
Amendment of local policies and procedures
to ensure improved inclusivity
Sites and offices were adapted with ramps
and toilets to ensure infrastructure was inclusive
and accommodating to people with disabilities
Updated the recruitment policy andadvertisement for employment to include
the equal opportunity statements

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTHUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Excessive working hours can takemany forms, including excessive andsometimes mandatory overtime,back-to-back shifts, lack ofrest days, or a lack of
breaks during the day.
Migrant workers,
temporary, contractand self-employedworkers, andwomen areamong those atheightened risk.

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There are many potential root causes ofexcessive working hours: seasonality, low
wages, production lead time and capacity,
culture choices, business practices, and political,
economic, and external pressures. These all can
impact the number of hours worked.

We maintain robust programs at the agriculturaland supply chain levels to promote respect forworking hours. These include the ALP programand a set of policies and procedures that
require the same in the non-leaf supply chain,
the Know Your Supplier (KYS) program.

Workers frequently want or need to work
extra shifts to earn more money and, in manycases, secure a decent livelihood, especiallyin countries facing recession and high ratesof unemployment or when people have
temporary contracts. It is complex to findthe right balance.

Our HRIAs have found some cases of highworking hours, mainly at the supplier level.

Although most of the countries we sourcefrom have laws regulating working hours andpayment of overtime, these laws are often
poorly implemented, enforced and/or not in linewith the ILO standards.

Malaysia

During the local HRIA, longhours were reported by workers
in the warehouse and also at
the factory, including long hours
for some forklift drivers.

During the HRIA at a third-party
warehouse, it was observed that
contractors were working longhours, up to 12 hours a day andsix days a week.

To address this finding,
JTI Bangladesh:To respond to this, JTI Malaysia
requested that the supplier:• Carried out a training ofsupervisors with regards
legal compliance to working
hours and overtime• Reviewed the labor laws
on working hours andovertime to ensure their fullcompliance with applicablelaws and regulations• Initiated a system where all
overtime is pre-approved by
the relevant line managers

There is plenty of evidence that excessive
hours of work and inadequate periodsof rest can damage health and increase
the risk of accidents. And often, there isa significant link between low wages andexcessive working time.
Many people are impacted by these practices,which in the end also impact the right to healthand right to family life.

• Developed a reporting
system of overtime hours
for management overview

Where local industry standards or international
conventions are higher than applicable legal
requirements, we expect suppliers to meetthe standards most favorable to workers.

n s u m er

Bangladesh• Installed new attendance
devices to ensure an
automated time andattendance tracking
system of employeeswith a direct interface ofthe Human Resources
Information System

Our Supplier Standards require suppliers toensure that working hours and remuneration
comply with local legislation and relevantinternational standards, including ILO
Conventions 1, 14, 95, and 132.

Sup

up

chain
ply

9. Working hours

TOWARDS 2030

• Strengthened awarenessof available rest breaks
and vacation entitlement
amongst workers throughconsultations and conductedtrainings for the management
and workers on the links
between rest, productivity
and safety performance• Stressed that overtime
must always be voluntarywith the worker’s consent,
and health and safety must
always be paramount

Read more:
JT Group Supplier Standards
ILO Convention 1
ILO Convention 14
ILO Convention 95
ILO Convention 132

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Collaborations and partnerships

56

Stakeholder engagement

59

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Engagement
Remedy60
Culture change through training

63

Human rights regulations

64

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Collaborations and partnerships

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

At JTG, we see collaborating with internaland external stakeholders in partnerships
as key to achieving change. In addition
to our global partnerships, we invest
time and effort in local partnerships
at the country level and use multistakeholder collaboration to scale andsustain our efforts.

The work of protecting and respecting human rights
must be founded on collaboration between governments,
businesses, and society. Ousting the tobacco industry
from the debate ignores the voice of 40 million people
globally engaged in tobacco growing. Therefore, we
believe that everyone has to have a seat at the table andeveryone’s voice should be heard. Regulation and policy
must reflect the benefits of collaboration, and to bringabout positive change, all views should be included.
Read more about 40 million people globally engaged
in tobacco growing“We believe it is essential
for businesses to respecthuman rights in orderto create a more just andsustainable world. Overthe past three years, BSR
has worked closely with
JTG to build a leading
human rights program
dedicated to this vision.
Throughout ourpartnership, JTG has
continually looked forways to improve their
human rights program,which incorporates bothfield-level due diligenceas well as integrationof human rights intobusiness operations.
It is exciting to see
JTG elevate this workby publishing a standalone human rights
report, and we hopemore companies will
follow suit.”
Jenny Vaughan
Human Rights Director, BSR

Working with global institutions to drive
systems change
Sustainable Tobacco Program (STP)

Eliminating Child Laborin Tobacco-Growing
Foundation (ECLT)Our international tobacco business is an active
member of the Sustainable Tobacco Program(STP) and chair of the STP Steering Committee,
consisting of industry peers. STP is an industrywide platform enabling businesses to collaborate
on human rights, environmental issues, andother sustainability challenges and to drive
sustainable agriculture through a continuous
improvement process. 2019 and 2020 wereyears of reform for STP, as it was restructured
around the robust due diligence process pillars
as follows: Identify, Prioritize, Respond, Measure,
Communicate, and Report.

As part of the ECLTFoundation Board since
2002, we have supported
strategic investment anddriven multi-stakeholder
action to address the root
causes of child labor. We work
alongside our industry peers,
the International Tobacco
Growers’ Association (ITGA)
and suppliers, towards ashared vision of thriving
agricultural communities
that are child-labor-free.

Organization for Economic Co-operation andDevelopment (OECD) and Food and Agriculture
Organization (FAO)

Sharing our experienceand learning fromother Companies

In 2018, we became part of the pilot project on
Guidance for Responsible Agricultural Supply
Chains. This initiative was run by the Organization
for Economic Co-operation and Development(OECD) in conjunction with the Food and Agriculture
Organization of the United Nations (FAO). By
participating in this project, we have been able
to share our own experiences, broaden our
understanding, and benchmark against others.

We are members of the BSR
Human Rights Working Group,
which is made up of over
40 companies from different
sectors. We use the working
group to learn from othercompanies on how they areoperationalizing the UNGPs
into their business operations,as well as share ourexperience and challenges.
We will continue listening andlearning from others via thisworking group going forward.

The final report about the pilot project was
published in 2019. It presents the key findingsof the pilot, lessons learned, good practices, andchallenges in implementing Supply Chain Due
Diligence (SCDD) as shared by the participants.
OECD-FAO Guidance for Responsible
Agricultural Supply Chains

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Collaborations and partnerships

Public private partnerships

Working with suppliers

For the past decade, we worked closely with the International Labor
Organization (ILO) and Winrock International, an international NGO, toaddress child labor in our sourcing countries through ARISE, our childlabor elimination program. This multi-stakeholder approach enabled us
to develop solutions to address the root causes of child labor and better
protect child rights.

We develop strong partnerships with
our key suppliers to achieve long-term
mutual success. Our strategic
relationships are built on shared values
and objectives. This allows us tofind sustainable solutions together,ensure a stable supply in a dynamic
environment, and adapt toinnovative technologies.

In 2015, our ALP program became part of the partnership between
the ILO and Japan Tobacco International (JTI), our international tobacco
business. As a result of this collaboration, ILO has supported us withan Impact Assessment Framework and tailor-made training materials
around the Fundamental Principles and Rights at Work. ILO has also
conducted a series of trainings to JTI and our third-party suppliers from
Brazil, Serbia, Turkey, Malawi, Tanzania, and Zambia.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Working with growers and third-party leaf suppliers
We work closely with our directly contracted growers and third-party
leaf merchants to enhance the security of supply and provenance ofleaf supply. Our relationships with directly contracted growers produce
tangible results, thanks to regular farm visits, dialogue, and training.
In 2016 we started a bi-annual process of ALP/SCDD reporting withthird-party leaf suppliers to:Provide more transparency on labor and human rights in our supply chain
Enable a continuous dialogue for improvement
Help meet our Sustainability target to ‘Implement ALP in all sourcing
countries by 2025’
We engage with all third-party suppliers directly not only via reports,
but also in Annual Global Meetings with appointed suppliers and via
country visits in a continuous dialogue for improvement in focus areas.
At the end of 2019 and at the start of 2020, we organized a series
of webinars on Extreme Breaches and the Rights of Workers as we
received many requests to get a better understanding of these topics,
both from our directly contracted growers and leaf merchants.

Read more about
working with suppliers

Partnering with local organizations
to invest in communities
We partner with local organizations
to contribute to the developmentof inclusive and sustainablecommunities. In line with ourcommunity investment policy, andas a responsible local community
member, we recognize the valueof nature, society, and humandiversity and work with a wide rangeof stakeholders to resolve social issues.
In 2020, we supported over 600 partnerorganizations to implement community
investment programs.
We have been working closely with
Corporate Citizenship and B4SI (former
London Benchmarking Group) to improve
our reporting on community investment.
Read more about community investment

600
Partner organizations
supported on community
investment programs

Working withexternal experts
BSR, twentyfifty Ltd,and KPMG AZSA
Sustainability have beenplaying important roles
in helping us to drive
our human rights due
diligence implementation.
Mazars has been atrusted adviser to us
on the UN Guiding
Principles on Businessand Human Rights andthe Reporting Framework.
Mazars has facilitateda cross-functional
workshop within thecompany on salientissue identification.

“What has impressedme in working with
JTI is how they engage
with their suppliersand evolve theirprogram based on
feedback from their
suppliers. Over the
past few years, thispartnership approach
has allowed them totake their supplierswith them as they
develop a supply chain
due diligence programthat fits this era of due
diligence legislation.
The growing
understanding, trust,and transparency with
suppliers are allowing
for new initiatives andcollaborations acrossthe industry to addresspersistent issues intobacco growing.
This approachof continuous
improvement has
been brought to theindustry throughJTI’s chairmanshipof the Sustainable
Tobacco Program.”
Luke Wilde
Managing Partner and Founder,
twentyfifty Ltd

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Collaborations and partnerships
Case study – Collaboration in India

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

In the majority of countries
from where we source
tobacco, we do so either
directly from a grower
or via leaf merchant.
However, in India, thesituation for Flue-Cured
Virginia (FCV) tobacco
is somewhat different.

In India, the supply of FCV is governed by the Indian Tobacco
Board (ITB) and our leaf merchants (third-party suppliers)
buy from the auction platforms, not directly from the grower.
Therefore, our suppliers need to work with the ITB and theirpeers to bring about change.
When our tobacco sustainability team visited India in 2016,
they found that our suppliers were promoting Agricultural Labor
Practices (ALP) amongst growers growing burley tobacco, whothey directly contract, but without the possibility to do so amongst
growers of FCV due to lack of direct relationship with the grower.
Since 2016, we have visited India regularly and sought toprogressively enhance our suppliers’ understanding and capability
to practice Supply Chain Due Diligence (SCDD) and promote greater
engagement within the industry, including with the ITB.

In 2019, in
collaboration withanother tobacco
manufacturer
and our tobacco
leaf merchants,
we undertook
a Supply Chain
Impact Assessment
to understandpotential humanrights risks fromthe perspective ofgrowers, workers,
and the community.

Independent local social researchers visited sevenvillages and interviewed 490 people across the threeareas from where our suppliers purchase. We wereparticularly grateful that the researchers had theopportunity to engage with typically vulnerable andunder-represented groups like women and children,
daily laborers, and landless and migrant workers.
The assessment found a range of human rights andsustainability challenges, and it identified a numberof priority topics that would benefit from continuing
collaboration by the Indian tobacco industry.
These topics included:

The assessment has provided a common understandingof the prioritized issues that the Indian tobacco industry
needs to address, and we continue to focus our efforts
towards encouraging an industry-wide response of
sufficient scale to address these priorities.
To this end and, despite COVID-19-related issues,
we are pleased to be furthering our dialogue with ourindustry peers (another tobacco manufacturer has joined
this initiative in March 2021) and the newly formed
Sustainability Sub-Committee (July 2020) of the Indian
Tobacco Association to address these complex andsystemic issues. We are currently discussing with our
suppliers and industry peers a tangible action plan.

The use of agrochemicals, a risk that needs to be
managed, for examples, by the correct use of PPE,
elimination of HHPs, and conducting effective trainings
The impact of inflation and cost of living on incomes
The effects of climate changeon the community’s resilience

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Stakeholder engagement

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We regularly engage with our
stakeholders to understand theissues that matter to them mostand to meet their needs andexpectations. This rightsholder
consultation is vital in helping
us to make decisions
that will drive
long-term
sustainability.

Our due diligence approach comprises various
forms of human rights impact and risk assessments,
ranging from remote, desk-based self-assessment
approaches to immersive field-level Human Rights
Impact Assessments (HRIAs) in our high-risk markets,in addition to more focused supply chain due diligenceassessments in our tobacco sourcing countries.
This is complemented by the regular monitoring andimpact identification elements of our Agricultural Labor
Practices (ALP) program.

In each of these processes’ stakeholders
are engaged at different levels.
With the help of BSR, during our Self-Assessment
Questionnaires (SAQs), we engage with our colleagues
in each market whose respective teams provide
input to the assessment. We work with these teams
regularly during follow-up and action plan creation.
We have started to roll out self-assessments to someof our distributors as well, which means more direct
engagement with those contacts at the distributor level
and their staff.
Our approach to stakeholder engagement during
our field-level HRIA focuses on rights-holders acrossthe value chain, including farms, manufacturing
and processing facilities, corporate-level
employees, sales, marketing, anddistribution employees, and theemployees of a diverse array of suppliers
and other business partners.
At each site visit, we engage arepresentative sample of rightsholders across functions,operations, and roles, including
key vulnerable populations, suchas women, ethnic or religious
minorities, migrant labor, andcontracted and outsourced laborers. Where possible,
we conduct women-only interviews and have language
interpreters to facilitate the dialogue. Prior to every
HRIA, we conduct thorough research on the market,
the issues specific to the industry, and all rights-holder
groups, including those most vulnerable. This helps
us tailor questions and engagements more efficiently
towards the potentially most severe impacts and identify
vulnerable populations ahead of time.

300 – 500Rights-holders engaged during our
Supply Chain Impact Assessments

We strive for a representative sample size ofright-holders during each assessment. As an example,
in recent HRIAs, we engaged 10-20 factory workers
from all cohorts during factory visits (both JTG
and supplier factories), 20-40 Leaf workers from allprocessing phases per site, and 10-15 office workers
for our sites.
For our Supply Chain Impact Assessments, we selecta diverse range of farming communities that would
potentially demonstrate a variety of conditions andthe key challenges identified in the initial high-levelresearch. Within each of the visited communities,
we engage with different impacted groups in generaland have targeted discussions. The impacted groups
include growers, workers, tenants, migrant andseasonal workers, wives of growers and tenants,
children of farming families and non-farming families,
and community members.
Depending on the number of growers we contract ineach origin, we aim to engage between 300-500 rightsholders during our Supply Chain Impact Assessments.
Recognizing that vulnerable individuals may not
actively participate in the formal engagement or focus
group discussions, considerable emphasis is placedon informal research and engagement. For example,
the researchers would conduct informal discussions
while walking across farms and communities.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Remedy

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Access to an effective remedy is ahuman right in itself and, therefore,a key component of respecting
human rights. To fully meet our
responsibility to respect human rights,
we endeavor to actively engage in theremediation of any potential impacts
that the business may have caused
or contributed to.

Reporting concerns
mechanisms play a criticalrole in opening channels for
dialogue, problem-solving,
investigation, and, whenrequired, providing remedy.
They enable workers andother rights-holders toraise complaints freely andobtain effective resolutions.
They can also help identify
country-specific solutions
and pre-emptive action.
Our Reporting Concerns Mechanism
ensures that our employees andbusiness partners can easily
raise their concerns in good faith,
confidentially, and without fearof retaliation. To us, it is crucial
to maintain and nurture the culturethat we have worked together so hardto build. Our Code of Conduct is veryclear about what we expect in termsof acceptable behavior

from our employees, our business
partners, and anyone associatedwith the JT Group.
Across the JT Group, each of ouroperating companies has speciallytrained members who handle
compliance matters1. If an employee isconcerned about a potential violationof our Code of Conduct, they cancontact their line manager, HR lead,or a member of the compliance team2.
We also provide an external
concern-reporting service, run by anindependent provider and available
24/7. Every reported concern andinvestigation report are treated ona confidential basis, and retaliation
against anyone reporting a concern
will not be tolerated.
In 2020, we received 668 reports
across JT Group. In the case ofproven violations of our Codes ofConduct, we took appropriate actionin the form of dismissal, verbal or
written warnings, or other measures.
Grievance Mechanism – deep
dive into our international tobacco
business’s Your Voice
We believe that everyone should be
able to raise concerns and have their
voice heard, in their own language,
and even if they do not have accessto a company computer or thecompany network. That is why weensure secure access to the reporting
system for all of our employees andbusiness partners at all times andfrom anywhere.
To achieve this, we have in place
our own internal reporting concern
mechanism – Your Voice.
We are committed to achieving andmaintaining the highest standardsof ethical behavior and acting
responsibly in all we do. Your Voicehelps us meet these standards by
allowing employees and business
partners to report behavior related
to JTI business, which they believe
is in breach of the company’s
Code of Conduct, Polices andProcedures, Operating Guidelines
or applicable laws, including humanrights concerns.

At JT Group,
we are committed
to creating
an inclusive
environment where
people can speak
up freely and trust
each other to do
the right thing.

1

In our international business, each of our operating companies, has specially trained members who can serve as the first point of contact to employees
who consider raising a concern with Business Ethics and may need advice or support in that respect.

2

In our international business, employees can contact a Contact Person, a Regional Compliance Officer, or a member of the Business Ethics team.

Examples of the type of issues thatcan be reported through Your Voice
include, but are not limited to, fraud,
theft, corruption, money laundering,
illicit trade, discrimination, moral andsexual harassment, or other forms
of inappropriate behavior.

The Business Ethics Team is ateam of compliance professionals
within the Corporate ComplianceDepartment that has overall
responsibility for Your Voice.

TRUST
YOUR
VOICE

How does Your Voice portal work?

1
The reporting person raises a concern
by phone or web in their own language

2
JTI Business Ethics receives the concern

3
JTI Business Ethics directly interacts
via the portal with the reporting personin their own language

Key principles

Concerns raised in good faithwill be followed up and dealt with
impartially and in confidence
The identity of the reporting
person is kept confidential
and protected at all times
Zero tolerance for retaliation

4
The reporting person can accesstheir report for a status update at any timeY O U R V O I C E | Speak up in confidence

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RemedyUNGPs - Eighteffectiveness criteria
and Your VoiceHUMAN RIGHTS – FROM PRINCIPLES TO PRACTICEThe UN Guiding Principles
on Business and Human
Rights provide eighteffectiveness criteria
for company grievancemechanisms. These
effectiveness criteria
provide a benchmark
for designing, revising,or assessing company
grievance mechanisms
to help ensure that they
are effective in practice.

1. Legitimate

2. Accessible

3. Predictable

Enabling trust from the stakeholder groups and being accountable forthe fair conduct of processes.

Being known to all stakeholder groups.

Providing a clear procedure and clarity on process and outcomes.

There are many ways that we work to build trust and break down barriers
to access, such as a lack of awareness of the system, language, or fears
of reprisal.
We communicate regularly about the cases, statistics, etc., which helps
retain confidence in the process. All cases reported through the Your Voiceportal are encrypted. The content of reports is accessible to a strictly limited
number of people.

• 24/7/365 all over the world in over 50 languages• Accessible to employees and direct business partners

Full details about both Your Voice process and procedure are
published on the employee intranet for easy access. We informed
our suppliers of the updated Your Voice portal via an internaland external communications campaign. We shared emails and
SMSs and used QR codes to raise awareness, tailoring the type ofcommunication in every country to best suit the audience.

• Accessible via mobile phone or web• Option to leave a voicemail or write a message• Personal key number to access the report• Reporting person can leave messages anonymously or share
their contact details

4. Equitable

5. Transparent

6. Rights-compatible

Ensuring that affected stakeholders are given reasonable access to information and expertise
to engage on fair, informed, and respectful terms.

Keeping parties informed onprogress and providing sufficient
information on the portal’s
performance to build confidence.

Ensuring that outcomes accord with internationally recognizedhuman rights.

JTI launches annual global
communication campaigns tomaintain and increase awarenessof the Your Voice reporting channel.
Full details about the grievanceprocedure and Your Voice are
published on the employee intranet
for easy access. Confidentiality isa key principle in the Your Voice
process. The Your Voice procedure
and Your Voice process describe how
confidentiality is handled.

JTI has a non-retaliation policy in place. JTI employees are neither
permitted to take measures that would amount to retaliation against
a reporting person nor to threaten any such retaliation for reportinga concern of misconduct.

Various global and local communication campaigns and other initiatives aim to provide employees
and business partners with sufficient information to raise a concern Your Voice. They include:• Yearly Your Voice campaign rolled out throughout the organization• Update bulletins on the work of Your Voice (called Right Track)• Local initiatives to raise awareness around the Code of Conduct and Your Voice• Trainings by the Regional Compliance Officers on the Code of Conduct and Your Voice• Posts on the company’s communication intranet, called Workplace
The network of specially trained contacts provides guidance to employees on how to proceed toraise a concern. The Business Ethics team and the Regional Compliance Officers are available toaddress all questions related to Your Voice and the Code of Conduct that the employees may have.

Your Voice process ensures that all concerns of misconduct are reviewed
fairly and impartially.

The reporting of a concern of misconduct in good faith, even if thefacts subsequently prove inaccurate or do not give rise to any further
action, must not expose the reporting person to any disciplinary action.
The same protection applies to anyone participating in any stage of
the Your Voice process.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Remedy668
7. Source ofcontinuous learning
Drawing on relevant measures to identify lessons
for improving the portal.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

JTI reviews its internal grievance mechanisms
regularly from a human rights perspective.
The newly upgraded Your Voice tool now provides
enhanced reporting capabilities and analytics,
which will be used to conduct more in-depth root
cause analysis, identify patterns, and allow us
to be more proactive.
As a part of the HRIA methodology, the Your Voicereporting concerns mechanism is looked at andassessed. During a HRIA in Tanzania in 2018,
we identified that the awareness of our grievancemechanism could be improved to increase its
overall effectiveness, with some sites having
insufficient communications on the system inthe local language.
As a result, the local team relaunched a newcommunication campaign to reach all employees,
translating all communications and training
programs into Kiswahili, the local language.
The local team actively promoted the tool on
notice boards and leaflets as well as through directcommunication by the General Manager. In our
ongoing global effort to encourage employees
to speak up, we continue to provide targetedcommunications for markets. By empowering
workers and communities to speak up without fear,
we are able to strengthen our human rights due
diligence efforts.

8. Rights-holders
engaged in
the design(engagement)

Grievance cases reported

Reports received across JT Group in 2020
Breakdown of reported cases

2019

2018

Consulting stakeholder groups,
drawing from mediation best practice,and focusing on dialogue as themeans to resolve grievances.

66

The upgrade of Your Voice tool was
conducted based on a thoroughassessment of the key solution
providers in the market, considering
worldwide best practices and JTI’s
needs and requirements.

73

2020

87
166

162

190

144

9

12

17

79

84

349
270
97

414

723

668

Cases related to:Labor practices (excluding human rights)

Fraud and misuse of company assets

Anti-competitive behavior

Human rights

Corruption

Other

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Culture change through training

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We are working hard to embed humanrights thinking into our company culture
and improve employees’ understandingof the human rights implications ofbusiness decisions. To do this, we provide
regular training and continuously share
information about human rights andthe JT Group Human Rights Policy.
Employees in our Japanese operations havecompleted an online human rights e-learning module,
which was offered in Japanese, English, and Chinesewith a completion rate of 92%. The scope of the
training included our subsidiary companies in China,
Thailand, and the U.S. In addition, we provide
reader-friendly printed communication materials
to over 25,000 employees.
In our international tobacco business, we developed
an online mandatory human rights e-learning modulein 2017 that is available in 25 languages. To reach
employees without computer access, we now have a
dedicated section on respecting human rights integrated
into face-to-face training on our Code of Conduct.

92%
Employees inJapanese operations
have completed
the human rights
e-learning module

In November 2018,
we organized anawareness-raisingsession on human rights
to engage and educate
our staff on the subject
through an external voice.
At the session, Margaret
Jungk, formally at BSR
and the Danish Institutefor Human Rights, gavea speech that wasrecorded and shared withthe rest of the company
via our intranet.

Is talent
determinedby gender?
More recently, we have taken a different approach toe-learning. In 2021, we will launch a new digital humanrights e-learning platform in 32 languages focusing
on behavioral change. The objective is to increaseawareness and understanding of human rights risks
and to empower our employees to do the right thingwith regard to ethical behaviors.
Users are to complete the modules in any order they
like and will have the ability to drop in and out of
modules and sub-categories, making for a more
personal experience that caters to people’s busy
lifestyles. Rather than completing a lengthy training
in one sitting, employees will learn more about humanrights through bitesize content and gamification.
This method is designed to improve engagement andpromote better retention of information. Employees
will be provided with a Human Rights Certificate oncompletion of the assessment at the end of the module.

At JTI, our respectfor human rights
is never up
for debate
Discover how JTI stands up for gender equality
on our new Human Rights e-Learning Portal
humanrights.jti.com

JT Group Human Rights Policy

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Human rights regulations

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Celebrating the
10-year anniversaryof the UNGPs
provides anopportunity for
us to reflect on
how effective the
UNGPs have beenin contributing
to greater respect
for and protectionof human rights
around the world.

There is no doubt that there has been progress, butthere is a growing frustration that the voluntary natureof the UNGPs has hindered the pace of change needed.
Meaningful improvements in conditions for workers
and communities in global supply chains are deemed
insufficient, while pressure from NGOs and increasing
public awareness of modern slavery, abusive working
conditions, and child labor have intensified.

To accelerate the pace of change, certain
countries have and are increasingly
taking action to transform the UNGPs
into ‘hard’ national laws, resulting in an
increase in mandatory human rights
due diligence (mHRDD) and reporting
regulatory requirements.

In particular, the recent EU mHRDD proposal is worth
mentioning as it is the first attempt to mandate
HRDD at the regional level. By establishing mandatory
regulation at the regional or international level, we
anticipate improvements and clarity in methodologies
and approaches, greater visibility on the human rights
impacts of the operations of companies around theworld, and a push toward greater cooperation andcollaboration among the private sector to address these
impacts and provide remedy.
JTG has welcomed these potential improvements,
and, as such, we are lending our voice and influence
to promote such measures.

In support of theEuropeanCommission’s (EC)
Sustainability
Regulations Initiative
Together with a group of global businesses
convened by the Thomson Reuters
Foundation, we have signed a statement insupport of the European Commission’s (EC)
Sustainable Corporate Governance Initiative.
Read more about the statement we have signed
Sustainable Corporate Governance Initiative

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Vision 2030

66

UN Guiding Principles Reporting Framework
Index of Answers

71

ENGAGEMENTTOWARDS 2030

Towards

2030
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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Vision 2030
To commemorate the 10th anniversary of theendorsement of the UNGPs, the UN Working
Group on Business and Human Rights haslaunched the UNGPs10+ project to speed andscale up UNGPs implementation over the nextten years. Our focus is to continue the work
we’ve started during the next decade of UNGPs
implementation.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

We are committed to creating social value forour people, including our 58 300 employees and
72 000 directly contracted growers worldwide.
Our mission is to create, develop, and nurture
our unique brands to win consumer trust while
understanding and respecting the environment,
and the diversity of societies and individuals
through our 4S model. Our Code of Conduct andvalues guide the way how we act, and we havecodified these policies into three statements
we call the JT Group way:1.

Act with integrity, always
putting the consumer first.

2.

Continue to evolve whileremaining committed to quality
in all its aspects.

3.

Harness the power of diversity
across the JT Group.

In terms of our global sustainability strategy,
we have identified priority areas for each businesssegment. Moreover, we have defined a set oftargets we aim to achieve by 2030. Our targets
are a key component of our commitment to
conduct our business in a responsible mannerand mitigate our 9 human rights salientissues. We keep our existing targets underreview with an intention to strengthen thesecommitments over time.
The UN Guiding Principles have given companies
across sectors a shared roadmap for respecting
human rights and have contributed significantly
to the progress made over the last ten years
in raising awareness and public interest in
the business and human rights agenda.

Ensuring fairness, justice, and respect for humanrights is non-negotiable. While we have madesignificant progress in our efforts to integrate
the UNGPs into our business operations, we still
have much work to do. We know the challenge
remains significant, but we are fully committed tothe challenge and to being a part of the solution
to bring about sustainable development for all.

“As this report demonstrates, we are setting
a course for the future that is underpinned bya steadfast commitment to respecting humanrights. We share what progress we have madeand identify some of the challenges we haveovercome – while recognizing that there areareas where we still have much more to do
and learn”.

Despite progress, there is wide recognition
that gaps in the implementation of the UNGPs
remain. To truly deliver on the 2030 Agenda
for Sustainable Development, more needs
to be done and quickly. Ensuring human rights
for all will only likely come about when theprivate sector, government, and civil society
work together. The solutions will be derived
from multi-stakeholder collaboration.
As we look ahead to the next decade of the
UNGPs, we will need to further integrate climate
impacts and a gender lens more prominently into
our current human rights due diligence processes.
Action to tackle climate change now is theaction that places value on the future enjoymentof human rights.

Suzanne Wise
Senior Vice President,
Corporate Affairs and Communications,
JT International S.A.

More engagement with rights-holders
is required, particularly vulnerable
groups, in identifying, preventing,and mitigating human rights impacts.
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CONTENTS

INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Sustainability strategy of tobacco business
Strategic
Focus Areas

Products
and Services

Aspirational Goals

We will be a total
tobacco company
offering consumers
an even greater choice of
products by focusing on
quality, innovation, andreduced risk potential.

The UN Sustainable
Development Goals

Targets

Description

Progress

Reduced-Risk
Products

Reduced-Risk Products (RRP) offer real benefits to consumers and society.
Our responsibility as a manufacturer is to continuously develop and launch
RRP that meet consumer expectations and to provide information on them.
We will lead in providing the widest range of consumer choice in the RRP category.

At the end of 2020, we offered a choice of 6 tobacco vapor offerings(T-Vapor) and/or 5 types of e-cigarettes (E-Vapor) in 27 countries.

Product materials
and packaging

We will reduce the environmental impact of our products and packaging
through design solutions, facilitating responsible collection and disposal,and consumer awareness and education. More specifically, we will reduce
our packaging (including plastic) and ensure that the remaining is 85%
reusable or recyclable by 2025, rising to 100% by 2030. In total, recycledcontent will account for 20% of our packaging by 2025.

We will start reporting progress from 2022.

Zero injuries

In line with our vision of zero workplace injuries, we will reduce the injury
rate by 25% by 2023 and 50% by 2030. (Baseline year: 2015).

2

2015

2030

-50%

Recordable injury rate3-59%

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

2015

PeopleWe will be the employerof choice by investingin people.

Community
investment1

Between 2015 and 2030, we will invest USD 600 million to help makecommunities inclusive and resilient, with our employees contributing
300,000 volunteering hours.

2030

349

Investment (MM USD)

600

2015

Volunteering hours

Employer of choice

We will be certified employer of choice every year in at least 60 locations
by focusing on talent management, rewards, and empowerment.

2030

137,882

Countries where we are certified

1

Target for Community investment is a Group-wide target.

2

Progress shown is 2020 preliminary results, except for progress for ‘Greenhouse gas emissions’ and ‘Water and waste’ which is 2019 results. See jt.com for the latest information about JT Group progress against sustainability targets.

3

Recordable injury rate = Recordable injuries/200,000 hours worked. Some data from the newly acquired business have been excluded, as the newly acquired business needs 18 months to integrate the JT Group Health and Safety Standards.

300,000

60

67

67

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Strategic
Focus Areas

Aspirational Goals

Targets

Description

INTRODUCTIONSTRATEGY

We will reduce greenhouse gas emissions from our own operations by 35%
and from our direct leaf supply chain by 40% between 2015 and 2030.

Progress-17.4%

GHG emissions fromown operations

-35%
2030

+17.9%4 GHG emissions from direct leaf supply chain

-40%

2015

Water and waste

Supply Chain

We will reduce
environmental andsocial risks, andenable transparent
and responsible
practices acrossour supply chain.

2030

-9.7%

Water withdrawal reduction

-15%

2015

Waste reduction

Forestry

We will replace all wood from natural forests used in the tobacco curing
process of our directly contracted growers with renewable fuel sources by 2030.

2030

-6.3%

-20%

2015

Renewable wood sourcing

2030

41% by 20275

100%

2018

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Agricultural
Labor Practices

We will implement our Agricultural Labor Practices (ALP) program in all
sourcing countries by 2025.

2025

87% 100%

Leaf supplying entities reporting on ALP
2018

2025

76%

Leaf volumes covered by ALP

Supplier screening

Regulatory
Environment
and Illegal Trade

We will ensure thecompany is included
in policymaking leading
to fair and balanced
regulation and enhance
our cooperation withgovernments to combat
illegal trade.

We will screen all key suppliers against environmental, social, andgovernance criteria by 2023.

TOWARDS 2030

2030

2015

We will reduce water withdrawal by 15% and waste by 20% in relation
to our own operations between 2015 and 2030.

ENGAGEMENTThe UN Sustainable
Development Goals

2

2015

Greenhousegas emissions

SALIENT ISSUES

2019

Screened key suppliers

100%
2023

64%6

100%

Engagement

We will always protect our ability to participate in public policy debate withthe aim to achieve balanced regulation that meets societal concern andsupports business growth.

During 2020, we engaged openly and transparently in public policy
debate and made our views known to regulators, NGOs, and otherrelevant stakeholders in the countries where we operate.

Illegal trade

We will engage in dialogue with law enforcement agencies, with the goal toexchange intelligence regarding illegal tobacco products in order to support
the reduction of illegal tobacco products.

In 2020, our Anti-Illicit Trade team provided 1,117 intelligencereports to law enforcement agencies, and advised 859 law
enforcement officers on counterfeit recognition.

2

Progress shown above is 2020 preliminary results, except for progress for ‘Greenhouse gas emissions’ and ‘Water and waste’ which is 2019 results. See jt.com for the latest information about JT Group progress against sustainability targets.

4

The main reason for the increase in GHG emissions from our direct leaf supply chain is the increased volume sourced from Zambia and Tanzania, both of which use wood for curing that currently is predominantly non-renewable.
We expect that the impact of initiatives to reduce leaf-related emissions will be seen from 2022 onwards, with curing barn upgrades and the increase in proportion of renewable wood used for curing in Zambia and Tanzania.

5

Based on our 2020 sustainable tree planting activities in Tanzania, Zambia, and Brazil, we estimate that we are on a path to achieve 41% renewable wood sourcing by 2027 (accounting for 7 years wood production cycle).
Reduction from 59% in 2019 to 41% in 2020 can be attributed to lower tree planting and survival rates versus planned. Efforts and dedicated programs are in place to achieve 100% renewable wood supply by 2030.

6

The decrease from 67% in 2019 is due to ‘key supplier’ definition change, resulting in the increased number of key suppliers. However, the total number of suppliers screened has increased.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Sustainability strategy of pharmaceutical business
Strategic
Focus Areas

Products
and Services

PeopleAspirational Goals
We will create innovative,
original drugs to support
patients in the shortest
time possible.

Targets

Description

ProgressEngaging in
R&D activities

We will continue our efforts and investments into research anddevelopment activities of innovative drugs in specific therapeutic areas.

In June 2020, we launched CORECTIM® Ointment 0.5%.
We then launched ENAROY® Tablets 2 mg and 4 mg
in December 2020. Throughout the year, we spent25.2 billion Yen on our research and development activities.

Fostering ethicalawareness

In order to develop talent and foster employees’ ethical awarenessand sense of responsibility towards saving patients, we will continue
to learn more about patients’ needs by engaging in dialogue with medical
experts through our internal educational activity “For the Patients Project.”

In 2020, five employees took part in our “For the Patients Project”
as facilitators. They interviewed medical representatives andorganized an internal online ethical awareness event.

We will strive to nurturetalent development whichenables us to create
first-in-class (FIC) drugs.

2015

Community
investment1

Between 2015 and 2030, we will invest USD 600 million to help makecommunities inclusive and resilient, with our employees contributing
300,000 volunteering hours.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

2030

349

Investment (MM USD)
2015

Volunteering hours

Product
Safety andResponsibility

The UN Sustainable
Develpment Gooals

2

600
2030

137,882

300,000

Responsible
promotion of drugs

We will conduct, among others, regular training programs for our medical
representatives in order to provide medical professionals with appropriate
information on pharmaceutical products.

After their initial training, all of our medical representatives takea mandatory e-learning course once a month to keep their skills
and knowledge up-to-date.

Greenhousegas emissions

We will reduce greenhouse gas emissions from our own operations
by 31% between 2015 and 2030.

In the second quarter of 2021, we will report our progress.

We will strictly comply
with all relevant laws,
regulations, and industry
standards in order to deliversafe drugs to patients.

1

Target for Community investment is a Group-wide target.

2

Progress shown is 2020 preliminary results. See jt.com for the latest information about JT Group progress against sustainability targets.

69

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Sustainability strategy of processed food business
Strategic
Focus Areas

Products
and Services

PeopleAspirational Goals
We will continue to provide
high-quality, technologydriven products in response
to our customer’s needs,
to satisfaction and trust.

We will ensure workplacesafety for our employees,
while continuously investingin people who can contributeto enhancing corporate value.

Targets

The UN Sustainable
Develpment Gooals

Description

Progress

Improvement ofquality of life

We will develop and provide high-value-added productswith a focus on “health,” “convenience,” and “diversity,”in response to diverse consumer needs.

In 2020, we developed a new category of ready meal to meet withgrowing our consumer needs demand. In total, we launched six products,
which could can all be served without plates and without adding water.
Also, by utilizing a yeast technology, we launched six seasonings that
can add authentic cooking feeling even after a heating process.

Enhance job
satisfaction

We will further improve job satisfaction by promoting talentdevelopment in a secure and motivating workplace.

To ensure a safe workplace environment under the COVID-19 pandemic,
we introduced full-time flexible working and no-limit remote working.

Zero injuries

In line with our vision of zero workplace injuries, we will
reduce injury rates by 25% by 2025 and 50% by 2030.
(Baseline year: 2018).

2

2018

2030

2.3%

50%

Recordable injury rate3

2015

Community
investment1

Between 2015 and 2030, we will invest USD 600 million
to help make communities inclusive and resilient, with our
employees contributing 300,000 volunteering hours.

2015

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

600
2030

137,882

300,000

We will promote food safety management in compliancewith global food safety standards to develop food safety.
We will also enhance the way we communicate withcustomers so that they retain trust in our food quality.

We coordinate regular inspection in outsourced and our own factories.
Also, through internal training programs, we try to raise awarenessto improve the quality of our products. In order to communicate withcustomers and reflect their voice to our products, we launched a new
online tools to share consumer feedback with all employees.

Promote use ofenvironmentallyfriendly packaging
materials

We will promote the use of renewable plant-based
resources and reduce our use of non-renewable resources,
to reduce the environmental impact of our products.

We launched 24 products with a featuring biomass ink for its on the
packaging in 2020. To reduce non-renewable resource use associatedwith our bakery operations business, Saint-Germain are promoting
a campaign for customers who bring their own eco-bags to reduce
the amount of plastic shopping bags used.

Waste

We will reduce the amount of waste associated with ourJapanese domestic offices by an average of 1% per year.
(Intensity target4).

In the second quarter of 2021, we will report our progress.

Greenhousegas emissions

We will reduce greenhouse gas emissions from ourown operations by 28% between 2015 and 2030.

In the second quarter of 2021, we will report our progress.

Foster a safeand reliablecorporate brandSupply Chain

349

Investment (MM USD)

Volunteering hours

We will reduce social andenvironmental impacts
and continue to deliver safe
products to consumers.

2030

1

Target for Community investment is a Group-wide target.

2

Progress shown is 2020 preliminary results. See jt.com for the latest information about JT Group progress against sustainability targets.

3

Recordable injury rate = Recordable injuries/200,000 hours worked.

4

Intensity target = Amount of waste generation/Amount of production.

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

UN Guiding Principles Reporting Framework
Index of Answers
This index is designed to help readers quickly identify the location of answers to questions under the UN Guiding Principles Reporting Framework.

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

Section of the Framework

Location where addressed

Policy Commitment - What does the company say publicly about its commitment to respect human rights?

A1

Pages 4, 6, 7, 8, 9, 14

How has the public commitment been developed?

A1.1

Pages 7, 9, 10, 14, 15, 16, 17, 18, 66

Whose human rights does the public commitment address?

A1.2

Pages 7, 8, 9, 14, 15, 16, 17, 20

How is the public commitment disseminated?

A1.3

Pages 7, 10, 16, 17

Embedding Respect for Human Rights - How does the company demonstrate the importance it attaches to the implementation of its human rights commitment?

A2

Pages 4, 6, 7, 8, 9, 10

How is day-to-day responsibility for human rights performance organized within the company, and why?

A2.1

Pages 7, 14, 15, 16, 17, 18, 19, 20, 22

What kinds of human rights issues are discussed by senior management and by the Board, and why?

A2.2

Pages 7, 8, 9, 12, 14, 15, 16

How are employees and contract workers made aware of the ways in which respect for human rights should inform their decisions and actions?

A2.3

Pages 7, 8, 9, 14, 15, 16, 63

How does the company make clear in its business relationships the importance it places on respect for human rights?

A2.4

Pages 7, 9, 12, 14, 15, 16, 17, 18

What lessons has the company learned during the reporting period about achieving respect for human rights, and what has changed as a result?

A2.5

Pages 4, 7, 9, 10, 19, 20

Statement of salient issues: State the salient human rights issues associated with the company’s activities and business relationships during the reporting period.

B1

Pages 12, 24

Determination of salient issues: Describe how the salient human rights issues were determined, including any input from stakeholders.

B2

Pages 24

Choice of focal geographies: If reporting on the salient human rights issues focuses on particular geographies, explain how that choice was made.

B3

Pages 16, 19, 24

Additional severe impacts: Identify any severe impacts on human rights that occurred or were still being addressed during the reporting period, but which fall outsideof the salient human rights issues, and explain how they have been addressed.

B4

Not recorded in the report

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CONTENTS

Section of the Framework

STRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Location where addressed for each salient issue
1 - Child Labor
2 - Environmental impacts

3 - Fair Wage

4 - Forced Labor

5 - Harrassment & gender impacts

C1

Page 25

Pages 8, 30

Page 33

Page 36

Page 39

C1.1

Pages 16, 20, 22, 25

Pages 16, 20, 22, 30

Pages 16, 20, 22, 33

Pages 16, 20, 22, 36

Pages 16, 20, 22, 39

C2

Pages 25-27, 56, 57, 59

Pages 30-32, 56, 57, 59

Pages 34, 35, 56, 57, 59

Pages 36-38, 56, 57, 59

Pages 39, 40, 56, 57, 59

How does the company identify which stakeholders to engage within relation to each salient issue, and when and how to do so?

C2.1

Pages 25-27, 56, 57, 59

Pages 30, 32, 56, 57, 59

Pages 34, 35, 56, 57, 59

Pages 36-38, 56, 57, 59

Pages 39, 40, 56, 57, 59

During the reporting period, which stakeholders has the company
engaged with regarding each salient issue, and why?

C2.2

Pages 25-27, 56, 57, 59

Pages 30, 32, 56, 57, 59

Pages 34, 35, 56, 57, 59

Pages 36-38, 56, 57, 59

Pages 39, 40, 56, 57, 59

C2.3

Pages 27, 56, 57, 59

Pages 30-32, 56, 57, 59

Pages 34, 35, 56, 57, 59

Pages 36-38, 56, 57, 59

Pages 39, 40, 56, 57, 59

C3Page 24

Page 24

Page 24

Page 24

Page 24

C3.1

Page 25

Page 30

Page 33

Page 36

Pages 39, 40

C3.2

Not recorded in the report

Not recorded in the report

Page 35

Page 38

Page 40

C4

Page 24

Page 24

Page 24

Page 24

Page 24

How are those parts of the company whose decisions and actions can affectthe management of salient issues, involved in finding and implementing solutions?

C4.1

Page 22

Page 22

Page 22

Page 22

Page 22

When tensions arise between the prevention or mitigation of impacts related
to a salient issue and other business objectives, how are these tensions addressed?

C4.2

Not recorded in the report

Not recorded in the report

Not recorded in the report

Not recorded in the report

Not recorded in the report

C4.3

Pages 26, 27

Page 31,32

Page 34,35

Page 36,37,38

Page 39,40

C5

Pages 26, 28

Pages 31, 32

Page 34

Page 38

Pages 39, 40

C5.1

Pages 28, 29

Pages 31, 32

Pages 34, 35

Page 38

Page 40

C6

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Through what means can the company receive complaints or concerns related to each salient issue?

C6.1

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

How does the company know if people feel able and empowered to raise complaints or concerns?

C6.2

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

How does the company process complaints and assess the effectiveness of outcomes?

C6.3

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

During the reporting period, what were the trends and patterns in complaints or concerns
and their outcomes regarding each salient issue, and what lessons has the company learned?

C6.4

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

During the reporting period, did the company provide or enable remedy for any actual impacts
related to a salient issue and, if so, what are typical or significant examples?

C6.5

Page 29

Page 31

Pages 34, 35

Pages 36, 38

Page 40

Specific Policies - Does the company have any specific policies that
address its salient human rights issues and, if so, what are they?
How does the company make clear the relevance and significanceof such policies to those who need to implement them?
Stakeholder Engagement - What is the company’s approach to engagementwith stakeholders in relation to each salient human rights issue?

During the reporting period, how have the views of stakeholders influenced
the company’s understanding of each salient issue and/or its approach to addressing it?
Assessing Impacts - How does the company identify any changes
in the nature of each salient human rights issue over time?
During the reporting period, were there any notable trends or patterns
in impacts related to a salient issue and, if so, what were they?
During the reporting period, did any severe impacts occur that were related
to a salient issue and, if so, what were they?
Integrating Findings and Taking Action - How does the company integrate its findings
about each salient human rights issue into its decision-making processes and actions?

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

INTRODUCTION

During the reporting period, what action has the company taken to preventor mitigate potential impacts related to each salient issue?
Tracking Performance - How does the company know if its efforts to addresseach salient human rights issue are effective in practice?
What specific examples from the reporting period illustrate whether eachsalient issue is being managed effectively?
Remediation - How does the company enable effective remedy if people
are harmed by its actions or decisions in relation to a salient human rights issue?

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CONTENTS

Section of the Framework

STRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

Location where addressed for each salient issue
6 - Health & Safety
7 - Health Risk

8 - Non-discrimination & equality

9 - Working hours

C1

Pages 9, 41

Page 48

Page 50

Page 54

C1.1

Pages 16, 20, 22, 41

Page 49

Pages 16, 20, 22, 50

Pages 16, 20, 22, 54

C2

Pages 41, 45, 46, 47, 56, 57, 59

Pages 48, 49, 56, 57, 59

Pages 50, 51, 52, 53, 56, 57, 59

Pages 54, 56, 57, 59

How does the company identify which stakeholders to engage within relation to each salient issue, and when and how to do so?

C2.1

Pages 41, 45, 46, 47, 56, 57, 59

Pages 48, 49, 56, 57, 59

Pages 50, 51, 52, 53, 56, 57, 59

Pages 54, 56, 57, 59

During the reporting period, which stakeholders has the company
engaged with regarding each salient issue, and why?

C2.2

Pages 41, 45, 46, 47, 56, 57, 59

Pages 48, 49, 56, 57, 59

Pages 50, 51, 52, 53, 56, 57, 59

Pages 54, 56, 57, 59

C2.3

Pages 41, 45, 46, 47, 56, 57, 59

Pages 48, 49, 56, 57, 59

Pages 50, 51, 52, 53, 56, 57, 59

Pages 54, 56, 57, 59

C3Page 24

Page 24

Page 24

Page 24

C3.1

Page 43

Not recorded in the report

Page 51

Page 54

C3.2

Page 43

Not recorded in the report

Not recorded in the report

Page 54

C4

Page 24

Page 24

Page 24

Page 24

How are those parts of the company whose decisions and actions can affectthe management of salient issues, involved in finding and implementing solutions?

C4.1

Page 22

Pages 22, 49

Page 22

Page 22

When tensions arise between the prevention or mitigation of impacts related
to a salient issue and other business objectives, how are these tensions addressed?

C4.2

Not recorded in the report

Not recorded in the report

Not recorded in the report

Not recorded in the report

C4.3

Pages 9, 41, 42, 45, 46, 47

Page 49

Pages 50, 51, 52, 53

Page 54

C5

Pages 43, 44, 47

Page 49

Page 53

Page 54

C5.1

Pages 43, 44, 47

Page 49

Page 53

Page 54

C6

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Through what means can the company receive complaints or concerns related to each salient issue?

C6.1

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

How does the company know if people feel able and empowered to raise complaints or concerns?

C6.2

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

How does the company process complaints and assess the effectiveness of outcomes?

C6.3

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

During the reporting period, what were the trends and patterns in complaints or concerns
and their outcomes regarding each salient issue, and what lessons has the company learned?

C6.4

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

Pages 60, 61, 62

During the reporting period, did the company provide or enable remedy for any actual impacts
related to a salient issue and, if so, what are typical or significant examples?

C6.5

Page 47

Page 49

Page 53

Page 54

Specific Policies - Does the company have any specific policies that
address its salient human rights issues and, if so, what are they?
How does the company make clear the relevance and significanceof such policies to those who need to implement them?
Stakeholder Engagement - What is the company’s approach to engagementwith stakeholders in relation to each salient human rights issue?

During the reporting period, how have the views of stakeholders influenced
the company’s understanding of each salient issue and/or its approach to addressing it?
Assessing Impacts - How does the company identify any changes
in the nature of each salient human rights issue over time?
During the reporting period, were there any notable trends or patterns
in impacts related to a salient issue and, if so, what were they?
During the reporting period, did any severe impacts occur that were related
to a salient issue and, if so, what were they?
Integrating Findings and Taking Action - How does the company integrate its findings
about each salient human rights issue into its decision-making processes and actions?

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

INTRODUCTION

During the reporting period, what action has the company taken to preventor mitigate potential impacts related to each salient issue?
Tracking Performance - How does the company know if its efforts to addresseach salient human rights issue are effective in practice?
What specific examples from the reporting period illustrate whether eachsalient issue is being managed effectively?
Remediation - How does the company enable effective remedy if people
are harmed by its actions or decisions in relation to a salient human rights issue?

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INTRODUCTIONSTRATEGYSALIENT ISSUESENGAGEMENTTOWARDS 2030

HUMAN RIGHTS – FROM PRINCIPLES TO PRACTICE

List of abbreviations
ADET Center

Agronomy Development and Extension Training Center

ALP

Agricultural Labor Practices

ARISE

Achieving Reduction of Child Labor in Support of Education

CORESTA

Cooperation Centre for Scientific Research Relative to Tobacco

CPAs

Crop Protection Agents

FAO

Food and Agriculture Organization of the United Nations

GAP

Good Agricultural Practices

GTS

Green Tobacco Sickness

HHPs

Highly Hazardous Pesticides

HRIA

Human Rights Impact Assessment

ILO

International Labor Organization

JT

Japan Tobacco

JT Group/JTG/Group

Japan Tobacco Group

JTI

Japan Tobacco International

MFS

Minimum Forestry Standards

OECD

Organisation for Economic Co-operation and Development

RRP

Reduced-Risk Products

SAQ

Self-Assessment Questionnaire

SCDD

Supply Chain Due Diligence

SCIA

Supply Chain Impact Assessment

SCREAM

Supporting Children’s Rights through Education, the Arts and the MediaSTP

Sustainable Tobacco Program

UNGPs

United Nations Guiding Principles on Business and Human Rights

74

Thank you