JT Group Sustainability
Report F Y 2015
BASIS OF REPORTING

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Introduction
This Basis of Reporting document outlines the scope and the way we define, calculate,and consolidate specific environmental, human resources (HR), and health and safety
related data within Our planet and Our people sections of the JT Group Sustainability
Report FY2015. We will aim to update the Basis of Reporting document each year and to
expand the list of data in the future.

KEY
DEFINITIONSIn this section we clarify the meaning we attach to specific terms used as part of our performance data points.

SCOPE
This section states the scope of the data (correct for the business structure of the JT Group as of December 31,2015) and any exclusions if applicable. We report data for the entire JT Group including subsidiaries, wherever
possible. In the middle of 2015 the JT Group withdrew from the beverage business. As a result, we excluded
this business from reported data for 2015, or stated otherwise where that was not possible or appropriate. In
addition, some of the historical data presented in the FY2015 report has been restated to reflect the changes in
the organization retrospectively. We use the following scope notations:*A = the entire JT Group including subsidiaries (i.e. international tobacco, Japanese domestic tobacco,
pharmaceutical, and processed food businesses)*B = solely Japan Tobacco Inc. (JT) (includes Japanese domestic tobacco and pharmaceutical businesses, andexcludes international tobacco business, processed food business, and subsidiaries of all businesses)*C = Japan Tobacco Inc. (JT) and Japanese domestic Group companies (includes subsidiaries of Japanese
domestic businesses, excludes international tobacco business)*D = Japan Tobacco Inc. (JT) and Japan Tobacco International (JTI)*E = solely Japan Tobacco International (JTI) (our international tobacco business)

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONSIn this section we provide information for the calculations, formulas, consolidation method, and any
assumptions or estimates used.

ASSURANCEIn this section we provide, where applicable, information on the standard against which specific indicators are
assured and the level of assurance or verification.

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Human resources
ORGANIZATIONAL PROFILEGRI G4-10 – Workforce information
DEFINITIONSWorkforce consists of people working for the company at the end of 2015 as follows:
•

•
•
•
•

Full-time employee is defined according to national legislation and practice regarding working time(such as national legislation defines that ‘full-time’ means a minimum of nine months per year and aminimum of 30 hours per week).
Part-time employee is defined as an employee whose working hours per week, month, or year are lessthan ‘full-time’ as defined above.
Supervised worker is defined as an individual who performs regular work on-site for, or on behalf of,
the organization but is not recognized as an employee under national law or practice.
Permanent contract is defined as a contract for an indeterminate period.
Temporary contract is defined as a contract for a limited duration or determinate period.

SCOPE

(*A)

The scope of this data covers the entire JT Group including subsidiaries , excluding employees in non-SAP
entities. For the breakdown of supervised workers the scope is only JT and Japanese domestic Group(*C)
companies . Workforce information broken down by JT Group businesses includes non-SAP entities toensure consistency with JT Annual Report FY2015. The beverage business and its subsidiary, JT Beverage Inc.,
which were part of the JT Group as of December 31, 2015, are also included.
Currently, the gender breakdown of temporary part-time employees cannot be provided by JT and Japanese
domestic Group companies as we calculate this number based on full-time equivalent (FTE).
The gender breakdown of supervised workers cannot be disclosed as it is deemed legally inappropriate.
No substantial portion of our work is performed by workers who are legally recognized as self-employed, or byindividuals other than employees or supervised workers, including employees and supervised employees ofcontractors.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
The figures are calculated based on exported data from our HR systems.

GRI G4-11 – Percentage of total employees covered by collective bargaining
agreements
DEFINITIONS
An employee is covered by a collective bargaining agreement if the employee declares his intentions to be partof a trade union and pays periodical union dues.

SCOPE

(*C)

The scope of this data includes JT and Japanese domestic Group companies , including 23 Group
companies and excluding 23 Group companies. The beverage business and its subsidiary, JT Beverage Inc.,
which were part of the JT Group as of December 31, 2015, are also included. Data from our international
tobacco business is excluded because the law in some of the countries where we operate prohibits us frominvestigating whether an employee is unionized.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
The figures are calculated based on exported data from our HR systems.

3ECONOMIC - MARKET PRESENCEGRI G4-EC5 – Ratios of standard entry-level wage by gender compared to
local minimum wage at significant locations of operation
DEFINITIONSStandard entry-level wage is defined as the theoretical lowest wage in the location and is therefore equal to or
lower than the actual lowest wage paid in the entity.
Local minimum wage refers to compensation per hour or other unit of time for employment allowed under law.
For Tokyo we use the official minimum wage of the Tokyo metropolitan area. For Moscow we use the official
minimum wage of Moscow City. For Trier we use the official German minimum wage.
Significant locations are defined as JT Tokyo HQ, JTI Geneva HQ, JTI Moscow, and JTI Trier factory. Tokyo andGeneva are our headquarters, and Moscow is the HQ office of the JTI Russia market – this market has thehighest number of employees in our international tobacco business. As a change from our FY2014 report, wehave designated Trier, our second largest factory in terms of number of employees, as a significant location,rather than our Petro factory in Saint Petersburg, Russia, which has the largest number of staff. We have done
this in the interests of reporting on a greater geographical diversity of facilities.

SCOPE
Significant locations of operations have been identified, as mentioned above, at Group-level including(*A)
subsidiaries . The data includes the beverage business and its subsidiary, JT Beverage Inc., which were partof the JT Group as of December 31, 2015. For our international tobacco business, the scope includes
permanent full-time and part-time employees and temporary full-time employees. However, there is no official
minimum wage in Geneva; therefore, it will be disclosed as N/A. In JT, the scope includes only permanent fulltime and part-time employees, and temporary full-time employees are not included.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
For the data reported under Tokyo the basis for calculation is hourly minimum wage and monthly entry-levelwage. For the data reported under Germany the basis for calculation is hourly minimum wage and hourly
entry-level wage. For the data reported under Moscow the basis for calculation is yearly minimum wage andyearly entry-level wage.

GRI G4-EC6 – Proportion of senior management hired from the local
community at significant locations of operation
DEFINITIONS
Senior management is defined as:••••

All people that report directly to the General Manager (including himself/herself)
All people that report to the head of Marketing & Sales
The Head of IT, who reports to the Chief Financial Officer
The Security Director and Anti-Illicit Trade Director who report to the Head of Legal

Significant location of operation for this indicator is defined based on the number of employees. In 2015 ourbiggest market in terms of employees was the Russian market.

SCOPE
The scope for this indicator includes full-time and part-time senior managers, but currently all senior managers
are full-time employees.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
The proportion is calculated as the number of management hires from the local community as of the end of2015 divided by the total management as of the end of 2015.

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LABOR PRACTICES AND DECENT WORK EMPLOYMENTGRI G4-LA1 – Total number and rates of new employee hires and employee
turnover by age group, gender, and region
DEFINITIONSNew employee hire is defined as the number of new employees joining the company from outside of JT Group
companies.
Employee turnover is defined as the number of employees who left the company for any reason, voluntarily ornot. Employee’s age is classified in three groups: under 30, between 30 and 50, and above 50 years of age.
Regions are defined as the geographical business areas specified within our Annual Report.

SCOPE
The scope of this data is detailed below, and all figures include the beverage business and its subsidiary, JT
Beverage Inc., which were part of the JT Group as of December 31, 2015, and exclude employees in non-SAP
entities:
•
•
•
•
•
•

(*A)

The number and rate of turnover by age: the entire JT Group including subsidiaries , and includes
permanent full-time and part-time employees and temporary full-time employees(*A)
The number and rate of turnover by gender: the entire JT Group including subsidiaries , and includes
permanent full-time and part-time employees and temporary full-time employees(*A)
The number and rate of turnover by region: the entire JT Group including subsidiaries , and includes
permanent full-time and part-time employees and temporary full-time employees(*D)
The number and rate of new employee hires by age: JT and JTI , and includes permanent full-timeand part-time employees and temporary full-time employees(*A)
The number and rate of new employee hires by gender: the entire JT Group including subsidiaries ,and includes permanent full-time and part-time employees and temporary full-time employees(*A)
The number and rate of new employee hires by region: the entire JT Group including subsidiaries ,and includes permanent full-time and part-time employees and temporary full-time employees

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Data for these indicators is collected in our HR systems.
The turnover and new employees’ numbers are based on exported data from our HR systems, at the end of
2015.
Turnover rate is calculated as the total number of turnover divided by the total number of employees at the endof 2015 for the defined scope above.
New employees’ hire rate is calculated as the total number of new employee hires in 2015 divided by the total
number of employees at the end of 2015 for the defined scope above.

GRI G4-LA2 – Benefits provided to full-time employees that are notprovided to temporary or part-time employees, by significant locations ofoperation
DEFINITIONS
Significant locations for this indicator include JT Tokyo HQ and JTI Geneva HQ.

SCOPE
For data reported under Tokyo the scope is solely JT(*B). The scope of data reported under Geneva is JTI

(*E)

.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Benefits for temporary part-time employees in Geneva have been stated pro rata.

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LABOR PRACTICES AND DECENT WORK – LABOR/MANAGEMENT RELATIONSGRI G4-LA4 – Minimum notice periods regarding operational changes,
including whether these are specified in collective agreements
DEFINITIONSMinimum notice periods are defined as those required, if any, by law in the country where the operationalchange occurs.

SCOPE
We disclose significant operational changes that have substantial consequences for a large proportion of
employees. The reported information corresponds to closures or withdrawal from business publicly announced
in 2015 or earlier but which had not been completed yet during the reporting period.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Notice periods are disclosed for each specific case of operational change. Notice periods are calculated anddisclosed in two different ways: the number of months between the announcement of the closure and the first
redundancies, and the number of months between the announcement of the closure and the closedown.

LABOR PRACTICES AND DECENT WORK –TRAINING AND EDUCATIONGRI G4-LA10 – Programs for skills management and lifelong learning that
support the continued development of employees and assist them inmanaging career endings
DEFINITIONS
We consider skills management programs that take account of employees’ needs and future career
opportunities, as well as requirements of the business.

SCOPE
We disclose global development programs that have wider coverage within JT and JTI
beverage businesses that were part of JT as of December 31, 2015.

(*D), including the

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
The report includes examples of programs that apply within JT and JTI.

GRI G4-LA11 – Percentage of employees receiving regular performance andcareer development reviews, by gender and by employee category
DEFINITIONS
We consider an employee to receive regular performance and career development review if the employee hasan opportunity to have their development and business objectives as well as competences evaluated by theirsuperior at least once a year.

SCOPE
The scope for the percentage of employees receiving regular performance and career development reviews is(*A)
the entire JT Group including subsidiaries . However, the scope for the breakdown by gender and employee(*D)
category is JT and JTI . The scope of employees includes permanent full-time and part-time employees andtemporary full-time employees but excludes employees in non-SAP entities. This data includes the beveragebusiness and its subsidiary, JT Beverage Inc., which were part of the JT Group as of December 31, 2015.

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DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Data is calculated as the total number of employees who received a performance and career development
review in 2015 divided by the total number of employees at the end of 2015.

LABOR PRACTICES AND DECENT WORK –DIVERSITY AND EQUAL OPPORTUNITYGRI G4-LA12 – Composition of governance bodies and breakdown of
employees per employee category according to gender, age group, minority
group membership, and other indicators of diversity
DEFINITIONS
Employee’s age is classified in three groups: under 30, between 30 and 50, and above 50 years of age.
The following definitions are used for employee categories in our international tobacco business:
•
•
•
•
•

•
•

Employees that are members of the Executive Committee are categorized as Executive Officers.
The Vice President and Director-level employees are categorized as Management.
Persons of Manager level and Associate level are categorized as Employees.
And for JT and Japanese domestic subsidiaries, the following definitions are used:
Executive Officers are persons who are appointed by the Board of Directors, are assigned certain
responsibilities, and delegate relevant authorities in accordance with the Rules Defining the Extent of
Responsibility and Authority.
Management is defined as persons in positions of supervision or management according to national
legislation and practice and excluding Executive Officers.
Employees are persons who are not in management positions.

SCOPE

(*A)

The scope of this data includes the entire JT Group including subsidiaries , excluding employees in non-SAP
entities. Akros Pharma Inc. is included in the data by position and gender, but excluded from the data by age
group and gender. This data includes the beverage business and its subsidiary, JT Beverage Inc., which werepart of the JT Group as of December 31, 2015. The data consists of permanent full-time and part-time
employees and temporary full-time employees. We store information only for the gender and age of ouremployees.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
The figures are calculated based on exported data from our HR systems.

LABOR PRACTICES AND DECENT WORK –EQUAL REMUNERATION FOR WOMEN AND MEN
GRI G4-LA13 – Ratio of basic salary and remuneration of women to men by
employee category, by significant locations of operation
DEFINITIONS
Significant locations for this indicator include JT Tokyo HQ and JTI Geneva HQ.
Unless specifically stated, the following definitions are used for employee categories in our international
tobacco business:••••

Vice President
Director
Manager
Associate

And for JT and Japanese domestic subsidiaries, the following definitions are used:•

Executive Officers are persons who are appointed by the Board of Directors, are assigned certain
responsibilities, and delegate relevant authorities in accordance with the Rules Defining the Extent of
Responsibility and Authority.

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•
•

Management is defined as persons in positions of supervision or management according to national
legislation and practice and excluding Executive Officers.
Employees are persons who are not in management positions.

SCOPE
In JTI Geneva HQ the scope includes permanent full-time employees and excludes those who manage theirsalary with non-CHF currency. In JT Tokyo HQ the scope includes permanent full-time and part-time
employees and temporary full-time employees.

DATA CALCULATION, CONSOLIDATION METHOD AND ASSUMPTIONS
The figures for both JT Tokyo HQ and JTI Geneva HQ are calculated based on ‘annual base salary.’
For JTI Geneva HQ, we calculate the average annual base salary by gender for each employee category
defined above. This average is used to calculate the ratio of annual base salary of women to men within eachcategory.
In JT Tokyo HQ, each of the categories defined above (Executive Officers, Management, and Employees)
includes multiple grades. We select grades that include both female and male employees to calculate the ratioof annual base salary of women to men. Then, those pay ratios are consolidated into the above three
categories based on the weighted average of employees within each grade.

OTHER EMPLOYEE - RELATED DATAPERCENTAGE OF MANAGEMENT POSITIONS HELD BY WOMEN AT
THE END OF 2015
DEFINITIONS
In our international tobacco business, an employee is categorized at a position of management if the employee
is Director level or above. In JT and Japanese domestic subsidiaries, an employee is categorized at a positionof management if the employee is in a position of supervision or management according to national legislationand practice.

SCOPE

(*A)

The scope of this data includes the entire JT Group including subsidiaries , excluding employees in non-SAP
entities. This data includes the beverage business and its subsidiary, JT Beverage Inc., which were part of the
JT Group as of December 31, 2015. Data consists of permanent full-time and part-time employees andtemporary full-time employees.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Data is calculated as the total number of women holding a management position at the end of 2015 divided by
the total number of employees who have a management position at the end of 2015.

PERCENTAGE OF MANAGEMENT POSITIONS FILLED BY INTERNALHIRESDEFINITIONS
In our international tobacco business, an employee is categorized at a position of management if the employee
is Director level or above. In JT, an employee is categorized at position of management if the employee is in aposition of supervision or management according to national legislation and practice. We defined internal hires
as current employees who would be reassigned to a new position by promotion or internal transfer.

SCOPE

(*D)

The scope of this data includes JT and JTI , excluding employees in non-SAP entities. Data consists ofpermanent full-time and part-time employees and temporary full-time employees.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Data is calculated as the total number of management positions filled by internal hires in 2015 divided by the
total number of management positions filled in 2015.

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TOTAL NUMBER OF TALENT PARTNERSHIP PROGRAM EXCHANGESDEFINITIONS
Total number of our Talent Partnership Program exchanges is defined as the sum of employees who aretransferred as functional or development assignees from JT to JTI or vice versa at the end of 2015.

SCOPE
The scope of this data includes JT and JTI

(*D)

.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Data is calculated as a sum of the number of functional assignees and development assignees seconded
between JT and JTI at the end of 2015.

NUMBER OF COMPANIES WITH A UNION / NUMBER OF COUNTRIESWHERE EMPLOYEES ARE REPRESENTED BY A UNION OR WORKCOUNCIL
DEFINITIONS
A union is defined as an organization that has as one of its purposes to collectively bargain the wages, hours,
and conditions of employment of a particular group of employees.

SCOPE
The scope of this data includes the entire JT Group including subsidiaries

(*A)

.

This data includes the beverage business and its subsidiary, JT Beverage Inc., which were part of the JT Groupas of December 31, 2015.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Data is calculated as of the end of 2015.

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Health and safety
OVERVIEW OF HEALTH AND SAFETY DATAASSURANCE
Our international tobacco business commissioned an independent services body to provide limited-level
verification over occupational health and safety performance data, including vehicle fleet safety performance,
based on the agreed-upon procedures principle, focusing on the accuracy, comparability, and timeliness of thedata, as well as the reliability of underlying data management systems for how data should be measured,
recorded, and reported.

RESTATEMENT
The number of factories reported as having OHSAS 18001 certification has been restated as we found a
misalignment in the scope of the numbers reported in the JT Group Sustainability Report FY2014. Applying thecorrect scope in calculating the 2014 data would have resulted in 81.0%, instead of 77.8%.
We would also like to restate the number of vehicle accidents (*E) reported in the JT Group Sustainability
Report FY2014 from 1,318 to 1,341.

LABOR PRACTICES AND DECENT WORK INDICATORSGRI G4-LA6 - Type of injury and rates of injury, occupational diseases, lostdays, and absenteeism, and total number of work-related fatalities, by region
and by gender
DEFINITIONS
We define lost-time incidents (LTIs) as a sum of lost-time injuries, lost-time illnesses/occupational diseases, andfatalities. Lost-time injury is a work-related injury that results in an individual being unable to work on asubsequent scheduled workday or shift. Lost-time illness/occupational disease is a work-related
illness/occupational disease resulting in an individual being unable to work on a subsequent scheduled
workday or shift. Fatality is a death resulting from a work-related injury or illness/occupational disease.
We record and report the following fatalities:•••

Fatal occupational injuries and/or fatal work-related ill-health cases that occur on, or across theimmediate external perimeter of, our site/office to our employee while he/she is on duty, a contractor
while he/she is working for us (including on-site third-party operations), or a person visiting oursite/office.
Fatal occupational injuries or work-related ill-health cases that occur while an employee is away fromour site/office but on company business (i.e. while on duty).
All fatal accidents involving members of the public that are associated with the JT Group’s own
operations and/or associated with a JT Group employee while she/he is on duty.

SCOPE

(*A)

The scope of this data includes the entire JT Group including subsidiaries , which covers all companies andsites. This data includes the beverage business and its subsidiary, JT Beverage Inc., which were part of the JT
Group as of December 3, 2015.
The scope of health and safety data we state in the report is broken down as follows:•••

Number of fatalities: Group-level data is for employees only. For our international tobacco business, we
also report the number of contractor fatalities, and third-party fatalities resulting from an incident
involving an asset, such as a facility or a vehicle being driven for business purposes.
Number of LTIs: Group-level data covers employees, while data for contractors, and in some instances
supervised workers, is only captured in our international tobacco business. Currently, outside of Japan,
lost-time illness/occupational disease only covers reported cases from the UK market.
LTI rate: Group-level data is for employees only. Contractors and supervised workers, who are notunder our direct supervision, are not included in our LTI rate as we do not have reliable data on thenumber of hours worked.

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DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
In our international tobacco business, health and safety data is collected at individual sites and locations, andreported internally on a monthly basis. Calculation is performed in the following manner:•••

Number of fatalities: a sum of all fatalities within our defined scope
Number of LTIs: a sum of all LTIs within our defined scope
LTI rate: the number of LTIs divided by 200,000 hours worked for our defined scope

In our Japanese domestic operations, health and safety data is reported to headquarters by individual functionsand Group companies on an annual basis, while serious incidents are reported immediately. The number
reported is based on the number of health and safety related events that were submitted to and are recognized
by relevant Japanese authority as such.
•••

Number of fatalities: a sum of all fatalities within our defined scope (employees only)
Number of LTIs: a sum of all LTIs within our defined scope
LTI rate: the number of LTIs divided by 200,000 hours worked for our defined scope

OTHER DATAVEHICLE ACCIDENTS AND VEHICLE ACCIDENT FREQUENCY RATEDEFINITIONS
A vehicle accident is defined as any incident involving a fleet vehicle that results in a death or an injury to an
employee and/or third party, and if no injury occurs but property damage results, from one of the following
events:•••••Collision between vehicles in motion
Collision of fleet vehicle with stationary object
Single-vehicle incidents (events that involve a driver/rider overturning, spinning, skidding, and/or
running off the road)
Collision with pedestrian
Collision with animal

SCOPE
The scope of data covers:••

Number of vehicle accidents: covering vehicles and motorcycles used by our employees on company
business in our international tobacco business.
Vehicle accident frequency rate: number of vehicle accidents per million kilometers driven in ourinternational tobacco business. The Global Supply Chain business is excluded from the vehicle accident
frequency rate due to relatively small fleet size.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Vehicle accident data is collected at individual sites and locations, and reported internally on a quarterly basis.
Calculation is performed in the following manner:••

Number of vehicle accidents: sum of all vehicle accidents within our defined scope
Vehicle accident frequency rate: the number of vehicle accidents divided by million kilometers driven
within our defined scope

PERCENTAGE OF CIGARETTE AND TOBACCO-RELATED FACTORIESCERTIFIED TO OHSAS 18001 SAFETY MANAGEMENT STANDARD
DEFINITIONS
Cigarette and tobacco-related factories include all our leaf processing, cigarettes, and tobacco productmanufacturing facilities.

SCOPE
The scope of this data is JT and JTIinternational tobacco business.

(*D), excluding market, R&D, and other support services within the11

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Certification information is collected at individual factories. The percentage is calculated as the number ofcertified factories and locations divided by the total number of all factories within scope.

Environment
OVERVIEW OF ENVIRONMENTAL DATASCOPE
We use operational control approach to determine the scope and boundaries of our environmental datareporting.

ASSURANCE
We commissioned independent services bodies to provide an assurance of Group-wide Scope 1 and Scope 2
greenhouse gas (GHG) emissions and some Scope 3 GHG emissions, Category 1 (Purchased goods andservices) of our tobacco business and Category 6 (Business travel) of our international tobacco business,against ISO 14064-3.
In addition, total energy consumption, water withdrawal, water discharge, waste generation, and percentageof recycled waste of our international tobacco business have also been verified.

RESTATEMENT
Historical environmental data for the period FY2009 through 2014, which was disclosed in the FY2014 report,
has been restated in accordance with the GHG Protocol Corporate Standard to reflect changes in the businesssince 2009.

ENERGY AND GHG EMISSIONSGRI G4-EN3 – energy consumption within the organization
GRI G4-EN15 – direct ghg emissions (scope 1)
GRI G4-EN16 – energy indirect ghg emissions (scope 2)
GRI G4-EN17 – other indirect ghg emissions (scope 3)
GRI G4-EN18 – ghg emissions intensity
GRI G4-EN19 – reduction of ghg emissions
DEFINITIONS
We measure energy consumption and GHG emissions using the World Resources Institute/World BusinessCouncil for Sustainable Development The Greenhouse Gas Protocol: A Corporate Accounting and ReportingStandard (2004 revised edition) and Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting
and Reporting Standard as guidance.
We report GHG emissions across three areas:•••

Scope 1: direct GHG emissions from corporate activities, such as burning of fossil fuels at factories
Scope 2: indirect GHG emissions from consumption of purchased electricity, heat, or steam
Scope 3: other indirect emissions, including from the manufacture of products bought from othercompanies

The reporting unit for energy consumption is terajoules (TJ) and for GHG emissions is 1,000 metric tons CO2
equivalent. GHG emissions intensity is reported in metric tons CO2 equivalent per million cigarettes equivalent,
which covers Scope 1 and 2 GHG emissions of our Japanese domestic tobacco and international tobacco
businesses only.

12DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
We calculate energy consumption and Scope 1 and 2 GHG emissions based on actual energy consumption at
our sites and locations from invoices and meters. Where this information is not available, in our international
tobacco business we use extrapolations based on actual data from a similar site or location to provide
estimated energy consumption, which is then used to calculate associated GHG emissions. Production, floorarea, or full-time equivalent (FTE) data are the main benchmarks used to calculate intensity metrics that areused in the extrapolation process.
For GHG reporting, in Japan we use GHG emission conversion factors set by the Japanese Act on the
Promotion of Global Warming Countermeasures, 2009. In other countries we use GHG emission conversion
factors provided by the International Energy Agency for 2009, the Department for Environment, Food and Rural
Affairs, along with supplier-specific GHG emission conversion factors where electricity is sourced from low
carbon energy sources.
For calculating Scope 3 GHG emissions, emissions factors come from a variety of sources, including emissions
factors from third-party databases and our own life cycle assessments.

WATER
GRI G4-EN8 – Total water withdrawal by source
GRI G4-EN22 – Total water discharge by quality and destination
DEFINITIONS
We record and report water withdrawal and water discharge at our sites and locations, and take into
consideration the framework on water reporting set out by CDP.
We report total water withdrawal and breakdown by source, and total water discharge and breakdown bydestination.
3

The reporting unit for water withdrawal and water discharge is 1,000 m .

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Water withdrawal data and water discharge data are collected at our sites and locations from invoices and/or
meters. If a site is unable to report volume of water withdrawal, we use extrapolations based on actual datafrom a similar site or location to provide estimated data. Production, floor area, or FTE data are the main
benchmarks used to calculate intensity metrics that are used in the extrapolation process. In the absence ofwater discharge data, it is assumed that water discharge will be equivalent to water withdrawal.

WASTE
GRI G4-EN23 – Total weight of waste by type and disposal method
DEFINITIONS
Our sites manage their waste based on the following waste hierarchy: reduce, reuse, recycling, and recovery. If
these methods are not feasible, a site will dispose of its waste (disposal being incineration without energy
recovery, or landfilling).
We report total waste generation and breakdown by disposal method that includes both non-hazardous andhazardous waste.
The reporting unit for waste generation is 1,000 metric tons.

DATA CALCULATION, CONSOLIDATION METHOD, AND ASSUMPTIONS
Waste data is collected at our sites and locations, and is reported by handling method, primarily from invoices.
If a site is unable to report volume of waste generation, we use extrapolations based on actual data from asimilar site or location to provide estimated data. Production, floor area, or FTE data are the main benchmarks
used to calculate intensity metrics that are used in the extrapolation process.

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OTHER DATAPERCENTAGE OF ISO 14001-CERTIFIED CIGARETTE AND TOBACCORELATED FACTORIESSCOPEThe scope of ISO 14001 data is cigarette and tobacco-related factories including subsidiaries such as nontobacco materials manufacturing factories within our Japanese domestic tobacco and international tobacco
businesses only.

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