Transcription of the GTNF Panel: The Evolution of the Sustainability Landscape

The 2022 Global Tobacco and Nicotine Forum (GTNF) was inaugurated on September 28, at 9:00 EST, at the Four Seasons Hotel in Washington, D.C. (21:00 BST). The forum features a myriad of keynote speeches and panels scheduled one after another and compensating each other.

One of these panels focused on the evolution of sustainability landscape. Speakers involved were as follows:

Shay Mustafa, senior vice president of business communications and sustainability at Reynolds American; Katrin Hanske, president of SWM; Jennifer Hunter, senior vice president of corporate citizenship and chief sustainability officer at Altria; Pieter Sikkel, president and CEO of Pyxus International Inc.; Malin Lindfors Speace, CEO of Ethos.

As below the unedited transcription of the panel is shown to let our readers to gain insight on the topic.

Transcription

Patrick:
We are going to move swiftly on to our very patient panel. The next panel, the panel before lunch, what stands between you and your lunch is the following panel, no pressure, the evolution of the sustainability landscape. Our panel moderator, we are very fortunate today we have with us Seamus Stouffer was Senior Vice President of Business Communications and sustainability at Reynolds American. She leads corporate communications and environmental social and governance ESG initiatives to accelerate the company's transformation agenda. She also serves on the US executive team of Reynolds, and in her current role she champions accessible science and whole of society solutions to improve public health, including tobacco harm reduction and youth access prevention. I'd now like to invite Shay to come on to the stage and to invite introduce her panelists. Thank you very much. Please welcome Shay.

Shay:
Thank you, Patrick. And I would like to invite my fellow panelist and I'll remind Patrick, that pressure makes diamonds. So there we go. We're ready. This is Jennifer Hunter, Senior Vice President of Corporate Citizenship and Chief Sustainability Officer for our Tria. We have Katherine henskee. Who is the president of SWF. And Peter, last but not least, Peter sickle, the President and CEO of Pyxis. So I want to begin, first of all, by thanking you all for joining us, and I also should not one is here, there she is. I'd also like to introduce Malin Spiess who is the CEO of ethos which is a global consultancy. Hello, I'm Alan, how are you? I'm fine. Thank you. How are you? Thank you for having me on the panel. Very good. Very good to see you. And we are hoping that the technology Gods love us today so that everything works. So I want to begin by just first saying thank you for giving me the opportunity to facilitate this panel on a very important topic. And before I turn it over to our panelists to say a few words, I just want to reiterate that ESG in our industry is not new. may think about it for a long time. We have been focused on environmental stewardship, corporate citizenship, and certainly robust governance. But the reality is that the landscape is evolving fast. Whether you think about the changes and shifts in the regulatory environment and reporting requirements to simply viewing ESG as a key driver of choice. The pace of change is accelerating. And so this is why this topic is so critical for our industry. And I just want to point out one quick thing before I turn it over to our panelists because I think this is fascinating. I shouldn't tell you that I'm a marketer by background. This idea of ESG is a drunk driver of choice. Certainly from a consumer perspective. We know that but also as we talked about, or heard from the other panels from an employee perspective, critically important are hiring decisions finding those rockstars are now often committed to or connected to our ESG or sustainability agendas. And their say the investment community is certainly evaluating our organizations with much more scrutiny and rigor as they evaluate what our plans are relative to sustainability going forward. So obviously a very critical topic and I just wanted to provide those highlights. And now I'd like to turn it over to our esteemed panel and Peter, we'll start with you just a brief introduction and we'll go around the room and the screen and then we'll jump into some questions.

Peter:
Okay, I'm Peter, sickle president and CEO of axis I've actually been with the company for almost 40 years. I'm one of the people Philip said this morning shouldn't be here and I'm also representing a bit of diversity on this panel. But actually, really here I'm here to talk about the supply chain that goes into many of these products that everybody is excited about them talking about this morning. So what is Pyxis? Who is Pyxis? Well under pictures we have alliances one tobacco Alliance one tobacco in multiple countries around the globe contracts with almost 300,000 farmers a year in order to use sustainable, traceable, compliant tobacco for all of these products that we've been talking about this morning. Also picks us as an organization called Pyxis agriculture. That organization really is focused on not only the farmer but also in in finding alternative or complementary crops for farmers to be able to access and produce in many of these countries around the globe. Particularly as we're looking at production and potentially demand decreasing. And also we're involved in e liquids and flavors and have several application PMTA applications in with the FDA and various stages of review and looking forward to hopefully a successful conclusion of that. But just coming back to the farmer, it's really at the heart of what what this industry does with without sustainable tobacco production. You couldn't produce sustainable tobacco derived vapor products, or heat, not burn sticks, or combustible sticks that really represent a significant portion of the industry today, and that's what we do. And that's what we supply the globe and that's what is unusual in what we do because we do it with multiple small farmers. Around the globe. So the whole sustainability and the future sustainability of those farmers is absolutely key, how they produce their product is key, how the the supply chain and the traceability of that product is key. And as you can imagine, we're operating in some of the poorest countries around the globe. And that's a very complicated process and structure. But we have passionate about that, because we're passionate about what we do. That's why I'm here and excited to talk with everybody on the panel about the progress in the future of ESG and into local production.

Shay: 
Thank you, Peter. And we know that Pyxis has been committed to sustainability for a long time. So we'll talk about that in just a minute. Jennifer.

Jennifer:
Well, good afternoon. First of all, I just want to express my gratitude to GTNF for having this conversation. At least started this morning with their 30 new folks that have are speaking for the first time I had the great fortune of being here in 2019. And I was talking about underage prevention, which I've had leadership of since 2004. And fast forward you know these many years later to now have a dedicated conversation about sustainability in this conference, I think states the importance of how the tobacco industry does need to lead in this area in order to achieve its smokefree aspirations that I think most of the major manufacturers have talked about today. I represent Altria. I've been with a company for 28 years, I have the great privilege of leading our corporate citizenship work and I am our first chief sustainability officer. And if you ask me, I'll tell you I have the best of it, the company. I want to pick up though on a point that she started us with, which is the expectations of all companies in this area has greatly increased. And when she said this isn't new for the tobacco industry she's right, but the content is different. We have been at this for years now as a license to operate. Having a product that is addictive that causes harm that can result in preventable death, which is why the industry is so focused on moving to a smoke free future, which is our vision to responsibly transition adult smokers to smoke free, suicide free future because that is the single greatest thing that we can do in order to maintain our license to operate and create long term sustainability for business. And we think that's right for our consumers. We believe it's right for our employees. We believe it's right for society, broadly. And so it is interesting when we talk about this conversation and how we innovate, innovation creates value, sustainability, create value, and those two things are not in conflict. They really are reinforcing ideas. And so I'm excited about the conversation that we're going to have and it is very clear that the industry knows that in order to address the harm associated with our products. We have got to move to a smoke free future. And it takes a lot of partners around the table to be able to make meaningful progress and I'm proud proud of what Altria has done and look forward to the journey that we remain on.

Shay:
Fantastic. Thank you, Jennifer. Katerin?

Katerin:
Thank you, Shane. Thank you Elise, because I'm one of the persons at least caught a newbie this morning. So I came new to this industry about two years ago, from totally different backgrounds semiconductors and paper and when joining SWF, who is one of the big suppliers to this industry. Actually, we had to ask ourselves two important questions Who do we want to be in this transformation journey of the industry? But also Which role do we want to play in the sustainability journey of this industry? And looking around as Was it my team I mean, one of us was very clear, we don't want to be a follower in the sustainability journey. We want to be a leader. And then of course over the last two years for us the question to answer was really, you know, how do we translate this intangible things and actions to do with our teams with our customers with our suppliers because being a supplier to this industry, the one thing is very clear, we cannot innovate alone. We need to innovate with our customers, we need to innovate along the value chain, and we need to get everybody involved in order to make the right decisions for us for our for the for our future for the future of our company, but also for the next generations to come. So very happy to be here on this panel. And looking forward to this discussion.

Shay:
Thank you, Catherine. I'm very excited about the theme of collaboration in places that matter to make an impact. Malin.

Malin:
Hi, thank you for inviting me so I am not the person. I'm here in Stockholm, Sweden, with air source International and we are a sustainability management consultancy. I'm the CEO and founder. We've been around since 2006. And we work with human rights, labor rights and environment and climate. anti-corruption and governance of these areas. So we work solely with sustainability. We're completely sector agnostic, we work in all continents and all industries. And we work from the full value chain. So from raw material inspections on site audits through transport, calculations, emissions, employees with diversity training, building structuring strategies, integration, and reporting to education out to investor community, market, consumers tires, Ross sustainability, inability needs to go, which is why we're very excited to be here. And we're excited to engage in these discussions with you particularly on some very changing landscape because, of course, as many of you know, European Union has set a very new and ambitious agenda to actually move all capital and all business in the European Union to be sustainable.

Shay:
Thank you, Madeline. So I want to pick up on this theme of evolution. So obviously in Jennifer, you said this there have been good been a lot of good things happening over time. But obviously we're at an inflection point. And I'd love to hear from the entire panel. We'll just do a quick rapid fire sort of response to this question, which is essentially, what are some of the key things you see shaping or changing in the sustainability landscape? So I'll start with you, Oh, perfect.

Jannifer
Like it's going to me. So one of the things that I would say that I observed is, one, this notion of what's happening around us and the expectations that people have of companies primarily driven by investors, employees, and consumers. And so there's this conversation of, you know, the importance of stakeholder capitalism, this focus from do no harm to create positive change for us again, at Altria our way that we believe we can create positive change is to adjust the harm of our products. And so that gets core to our vision which is moving beyond smoking. But what is important about this conversation around sustainability goes back to how do you know what is expected of you? And how do you make sure you anchor it to those expectations of your stakeholders? You take the time to understand what they expect. You identify where are the areas of your business where you can align those expectations into your business practices and then measure and communicate the progress that you're making. What is also important and as the shift that I've seen over the years is it's it's interesting when you go to these conferences, you talk about, you know, where does sustainability live in the function and how do you get work done? And the reality is, it's it's graduated from an island of it. So to a core part of how you drive long term success of a business, and I think that is the most important change that is going to lead to the long term success of companies addressing their most pressing issues that stakeholders care about. Because you've listened, you have identified how to align your practices, you've embedded it into your business. So it becomes part of your business and how you drive long term value long term sustainability. And it's not sitting on its own island unto itself. And I think that's an important change. And I think that leads to being able to innovate and add value for all stakeholders.

Shay
Thank you, Katerin.

Katerin
I mean, building on what you just said, and the first thing an important point is really does move from being a corporate function to bring it into the business and really not just thinking about what is expected from you, but who do you want to be in this journey as a company and kind of building the purpose, you know, for your teams for your company for your vision, something people can relate to you they are a supplier to your customer to you or you know your employee. So what we have seen in our journey, you know, moving it from a corporate office, really into the business, there's a lot of identification and you see a cultural shift because suddenly people who have not been very emotional about who we are, as a company get very emotional about it, and really see themselves identifying with themselves much better with the company because of how we paid our sustainability journey. And I've seen over the last two years, people really getting excited about what are we committing ourselves to in this journey. And I think moving forward, it's going to be a good differentiator to attract talent is going to be a good differentiator to really be innovative in the future, and is going to really open up the opportunity for CO design co development across the value chain, because you commit yourself to this sustainability journey across boundaries. So I think that's really the change where it says, you know, when you look where sustainability was 1015 years ago,

Shay
and we heard that this morning with focus on purpose, and also Jennifer, to your point, the integration of sustainability throughout the business, and not as a side project, but this is sort of core to the philosophy of how we operate. Peter, do you have a build?

Peter
Yeah. And talking about that purpose. You know, Pyxis we talk about transforming people's lives so that together we can grow a better world. And it's frankly, something that all our employees around the world can can really get behind. But it's not just the talk. It's the walk right? It's what's the big evolution of that is the data behind it. It's it's measuring what you have and setting real targets of what you want to achieve. And reporting on those in a very public way. I think this industry is way too shy about talking about some of the positive achievements that it's it's hard and it's made and continues to make around the globe. So, you know, in the past, we would do things like to we've planted 251 million trees around the globe since 1991. Great, how many of those survived? So I actually had to write it down because it's long. So let me give you a different example of what we do so in Malawi since 2014, we've planted 50,000,266 955 trees 14,000,435 450 of those directly and another 35,000,831 535 with our contracted farmers and directly of the of those 14,000,400 direct 12,000,650 400 So we are surviving and in the ground today and we have auditors coming around every year to look and measure it. And we have programs for the next few years on how we're going to increase that and we target that against our estimates of future requirements of tobacco products from an army so everything is much more measured than it was in the past. We used to do just good thing.

Shay
Yeah, no, I absolutely agree. Thank you for that example tonight. What I heard was a bold call for transparency. So translate. So let me Mellon actually I want to ask you a question as sort of the the outside of the industry experts. And you have experience obviously across industries as you mentioned in your opening, based on your experience what common practices do you see among companies that you believe are getting it right and sustainability? And conversely, we also want to know what are some of the mistakes?

Malin
I think what I would say best practice of any company anywhere is when a company has set a sustainability strategy that is intertwined with the business strategy, where the board and the CEO and the Manage team are actually acting as the coaches of the team sustainability of the company is but that does require that that the board and the management team are onboard, committed and knowledgeable. So to have that sort of integration of a strategy into your business strategy. You need to do your homework. And this of course, comes with transparency. But it also comes with being very, very clear on where your impact is and how the sustainability impact you. So addressing impact materiality, on the sort of company's impact on sustainability in the world. But then looking at how does sustainability impact your company's numbers? Because the big changes you would never measure before like one of the big changes what's happened, and this is that sustainability is all everything's becoming standardized. So there's no longer any sort of a big ability I mean, the room to have your take on it or only share what you feel comfortable with. This area is becoming zero quickly. So now that is being standardized, being transparent, basing your numbers on actual science and facts and being transparent with the whole value chain. Every company regardless of industry will have an impact will have problems. I mean, we did mention trees, spontaneous questions that is coming at them a monoculture are they the correct type of trees to have these trees been evaluated on the biodiversity impacts the trees have? So will not only the trees survive but will biodiversity and all the animals and bugs and people everything survive in that environment? So it is looking to do a full check never having only social sort of only doing good only investing and impact on consumers and customers but it is looking at everything intertwined the whole time. I don't know if this was answered your question, but I think it's the key point is getting on to the standards, being harmonized, being very truthful, very transparent, and owning up to your numbers.

Shay
Thank you and I think the one of the key takeaways is that perhaps ESG or sustainability efforts at some point maybe were seen as optional. But the reality is that that is not the case. Now it is no longer optional. And I think we're all committed to trying to do the right thing but also with the level of transparency and accountability. Which leads me to a question on capturing I'll come to you on capturing data. Because this is the you know, we're often data rich information poor. But I would love to hear your perspective on how companies can better use information about their products to drive innovation, and what tangible evidence can they provide relative to the the environmental impact of their products?

Katerin
Perfect question. Yeah. Thanks, Sherry, for that question, I think I mean, we all publishing already a lot of data around ESG however, I think the challenge we have seen an SWF for the past year, year and a half is really, you know, how do we bring it down to a more granular level? How do we actually enable people in our factories with our suppliers and with our customers to act up and and how do we make sure that they understand you know, how can I drive actually a change by going with a different product, a different raw material or changing the process? So, you know, working with my team for a while, what we came up with is we developed what we call right now an equal scorecard for our products, which is what most of you probably also do when buying washing machines or TVs. You're looking at an A plus or an A minus. So what we develop is what we call a scorecard for our products, where we differentiate our products from A to E, really looking at you know process efficiency of the product at the product design, the packaging and the sourcing, and the duration of the product. To really understand, you know, where does the product stand from an environmental footprint today? And what opportunities do we have by engaging with our operations teams with our r&d teams, but also across the value chain to give it a better environmental footprint? And what does that shown us is you know, it brings the big corporate number to a lower level where it actually becomes tangible for everybody involved in our day to day operations. And what I think it's gonna show moving forward is an excellent opportunity for us to co design and CO develop to just bring more sustainable products to the market.

Shay
Doing it. Thank you. I want to ask, I want to follow up Peter on something that you mentioned about your sustainability framework that was introduced, I believe, last year, and I know that you've had sustainable practices since 91. You mentioned that as well. So I would love to hear a little bit more around. You know, how you see the industry evolving, and specifically how are you measuring the impact of your efforts as a follow on to the sort of this question around reporting and transparency?

Peter
Well, that was interested in the data question here. It's actually one of the biggest issues and opportunities at the same time. Because we can track from a farmer to a case delivered in Indonesia to to a case delivered in Europe, for example. And under that process, we have many many data points, but what it means is with with a considerable footprint, we're dealing with a few 100 million data points every year. And the problem actually is to capture good data out of that and how to use it and how to set targets going forward. And I think one of the things that we've really been working on is that data integrity in the system and then how do you create really good reports out of that, that allows you to, to move forward and create measurable goals as we go out? But But yes, we've aligned our sustainability strategy with the UN SDGs. We will publish our next sustainability report according to those measures, and that will actually be out soon. We've published our targets for net zero emissions in our supply chain through 2015. net zero deforestation by 2030. All of these various targets, diversity and everything else. And we have global teams really trying to get everybody in the company in one way. Or another involved in making sure that those those targets happen. So I think we're fortunate we had a good culture in the company vote but really changing that to being more data focused and target focused is the key factor in what we're trying to achieve.

Shay
I want to build on that and Mel, and I'm just thinking from a broader perspective, because we talked a little bit previously about what you would want leaders to know, as they're building out their sustainability agenda. So obviously, this group of leaders, we're on a journey, but what are some of the specifics that are important? For us to think about as it relates to reporting? And and I'll also add a little side question here, which is for those of us so many, or some I'll say that who may be earlier in the journey, or maybe perhaps a bit more reactive, what do you want them to know about where we are? Now relative to reporting and measurements?

Malin
The first thing I think, is to remember that it's, it's a new arrow. So I mean, I've said this previously, and I think this is something that Kingsley is well aware of, and he probably mentioned it, but the goalposts have moved it's a completely new game that has just started because the European Union has launched the European standards for sustainability reporting. There is a completely new mandatory directive coming in, which just says anything that anybody's done over the past 510 20 years. It's completely rethink it, redo it, restart your work. So if I mean you do have a chance if you have an adult Ben sort of on the ball previously, you do have a shot and sort of doing it right now, but it does mean you need to get started just right now, because it is on to that data accuracy. You will need a very vast number of fixed data points that will need targets and goals and they are going to require actions. This of course requires to everybody is charged up and running towards the same direction onto what sustainability means and that is really sort of combating climate change, decreasing emissions, saving water having saw that you acting corporate circular economy, minimizing pollution and waste, looking at diversity equality, having zero corruption, looking onto anything on tax clarity, for human rights and supply chain so looking at both child labor, bonded forced labor, and all of this needs to be done simultaneously. So this is really the time where you, as I said before, it's that you really rethink what you have and what you've done. Is your sustainability strategy aligned with your business strategy, because it's a lot of work and you don't want to put in that work if you're not going to get the value to actually build a more successful and sustainable company. At the end of that. You need to redo because any metric you've had, you need to realign it. So this is really the time where you, as I said before, it's that you really rethink what you have and what you've done. Is your sustainability strategy. aligned with your business strategy, because it's a lot of work and you don't want to put in that work if you're not going to get the value to actually build a more successful and sustainable company. At the end of that, you need to redo because any metric you've had, you need to realign it. So that is why you really need to get started unpacking now, and that's to make sure that you are in the right order. Because these reports need to be credible. They need to be somebody is accountable for them. This is the board and the CEO. These are the people that need to be able to stand behind them proudly, transparently. Because this data is digitally tagged and will be shared by investors and in systems and needs to be able to go through any type of assurance or proofreading that is required by the stakeholders who are very knowledgeable on sustainability. So I think this is really the time to be clear, sort of become very, very harsh with your numbers and make sure that you give them the same scrutiny as you do to your financial numbers and weighted the same way. So I would say really, you know I said again, we think we do restart and start today

Shay
that we all catch that redo, rethink restart. We have that thank you very much. Well, I want to talk about one of the things that and this is an important topic, obviously for the industry, which is tobacco harm. reduction, which is near and dear to our bison an important initiative is core to our sustainability agendas. And Jennifer, I want to turn to you because I know I'll treat as well as bat Reynolds late we share a passion for what needs to be done in space which many of the Attendees heard this morning. Can you talk a little bit about what more can we do to really accelerate tobacco harm reduction in the industry?

Jennifer
We have heard a lot about from two of our speakers this morning and I was pleased to hear their comments. One of the things that I think is is important at Outreach. When we talk about tobacco harm reduction, first of all, we look at it as a little it's like a three legged stool, right? When you think about the product themselves, you have to have products that are satisfactory to the adult tobacco consumer. It's a product that's going to be commercially successful, they'll enjoy it and they will transition to smoke free products that are authorized in the US by FDA for use. We also know that there are consumers who want to entirely quit using tobacco products and so we think supporting adult tobacco consumers who've made the decision to quit do so successfully is also an important element of harm reduction. And then we absolutely have to make sure that underage use is not an issue for us. We've heard the conversation about innovative reduced risk products cannot be an off ramp for the adult tobacco consumer and an on ramp for youth. And so there has to continue to be a lot of attention to those three pillars of the stool to make sure that underage use especially as we start thinking about new to market products. As I sit here today with the 2021 data and think about how underage use has really declined over the years according to monitoring the futures 2021 results. Cigarette smoking is that a generational low of 2.3% That's a 92% reduction reduction since its peak in 1997. The last time I was here we were talking about the youth vaping epidemic and in 2019 it had reached 20% according to national youth tobacco survey, the 21 data would say combined middle school and high school is that 7.6% And so that is significant progress, but as we think about new to market products, and making sure that you don't have youth use, we need to have information more readily available. To us so that we are able to understand what is happening with underage youth to make sure that we have the right strategies in place. We need to have you know high compliance at retail to make sure you don't have purchased that retail there was a big shift from supporting legal age of purchase to move from 18 to 21. Now that it's 21 we need to make sure that it's effectively enforced and that we understand what young people are doing. So at our core, we have to make sure that progress continues. In the in the youth prevention space. And as we think about what we've heard this morning about the consumer, understanding what the consumer is looking for in products as they move down their journey from combustible to non combustible products. They do you have to be equipped with the right information. So my colleague Paige Magnus will be on a panel tomorrow and I know Nicotine misperception is a theme that is often talked about but if you have consumers who don't understand that the nicotine and the smoke from cigarettes do not cause the same harm, they may be less likely to switch to reduce risk products and so that has got to be solved for so as a manufacturer, we need to continue to make sure we've got products that a consumer is going to enjoy we need to have in a regulatory environment where those products get in the hands of consumers with the right information and then you see transition. And then the last thing that I will say is a year ago Billy Gifford who's our CEO talked about the importance of harm reduction, and making sure that it's equitable. And so there's a lot of conversation obviously about the health impacts the health disparities that we've seen, especially in light of COVID. And as we are all transitioning to a smoke free future, we need to make sure that all smokers inclusive of backgrounds have the same opportunity to move to these reduced risk products, because that is the way in which we're going to address the harm. And that's a conversation that we began actually as a result of our responsibility materiality assessment and 2020 where we began to hear themes of equity and social justice, where we said how do we now think about equity equity from the perspective of access to cessation information, folks that we know typically will not go to expert quitting information. How do you make sure they have high awareness and access to expert quitting information so they can quit and successfully stay quit? So those are some of the things that we are talking about, that I think are going to be important to the acceleration of harm reduction, but I will tell you sitting here today, listening to the conversations from the manufacturers, the fact that we are leading this transition to a smoke free future, we do need the conditions to operate that will help to accelerate that overall progress so that we can be here five years from now 10 years from now talking about the reduction in smoking rates, and now the adoption because you've got transition to a robust marketplace of authorized smoke free products that consumers enjoy. And we have our work we have some work to do there.

Shay
We do but I do agree that there has been progress made and certainly a whole of society approach is going to be critical. We need every stakeholder invested if we're going to really advance the mission and bat shares many of the same tenants. I have a I want to sort of related to that, but it's a question you've all sort of alluded to a little bit around culture and Catherine I'm looking at you because then we talked a little bit before about this. I think this is important. And we heard it this morning Rockstar talent and how do we really bring the culture along with us on this sustainability journey? So my question is, how do we embed sustainability into the culture of an organization? And we you know, certainly that's easier said than done. But I know that you have done you and your team have done a lot of work around achieving more with less, which I believe is the vision of sort of your sustainability agenda. So can you share with us how you've successfully done that and what what tidbits What advice would you give to others who need to really figure out how to embed this in the culture of their organization?

Katerin
I mean, it's building a lot on what has been said already this morning, I think, especially when you look at your sustainability journey. A lot of the challenge you have as an organization is that the people need to identify themselves with that culture. So as as a little two foot before you need to let us identify yourself as the leader. So very important, of course, for us as a company is you know that our leadership team, our teams really understand that we are committed to this journey personally as well as who we are as a corporate citizen. But why we built this agenda point of achieving more with less what's important for the team to understand you know, this is nothing we will give up just for short term profit or short term results. We always always fit every company faces the you know, the challenge recorded a challenging Max the challenge a year, what we wanted to give our teams as well as our suppliers to customers is the security to understand you know, this is a journey we are committed to for the years to come. So achieving more was less is something you know, we started about a year back and we have a roadmap for the years to come until 2030 to see what we can do better with our products what we can do better with our resources we use what we can do in order to improve our product designs. So it should give you know the security for everybody dealing with us as as WAM that we are committed to this journey no matter what.

Shay
Again, Would anyone else like to weigh in on the culture question?

Peter
I think maybe we'll I think as a global company, one of the things you you see is everybody has different opportunities around the globe. And so in some countries, obviously those are our method because of your footprint or the issues that you're facing there or what you're what you're trying to do in there and other areas of your business and administration office, they may not be so big. And give you an example you know our corporate office in Raleigh. It's it doesn't have a huge footprint. And somebody in the office came to me and said, Yeah, we see all these programs around the world and you know, we're a little bit embarrassed. What can we do here, right. You know, then then they started to understand what sure there's there's always something there's always something so we introduced recycling there and various other programs and so on. So you can everybody, people small has an opportunity to contribute contribute to your sustainability journey and your culture across the company. And I think it's I think it's important not just to to leave people out because they only have potentially a very small effect is to make sure that it's completely cross business cross function cross position, that people are getting the message.

Jennifer
I think that's an important point because when you talk about integrating it, culture plays a role and so we talk a lot about how do we activate our colleagues across the company in order to drive progress and so the comment that was made earlier about reporting and you know, you may need to reset and you know, go in it in a different direction, being clear to all stakeholders where you're playing in the ESG space. So one of the things that we've said in it, it goes back to this journey that the tobacco industry has been on is being very clear that as a as a tobacco company, you've got to address your core social issues, which is the which is reducing the harm of the product and preventing you from using it. But you also have to be like very engaged with the environment with your value chain with supporting people and communities, as well as overall, engaging and leading with because you're gonna have good governance around that. That's where you partner and work with others to drive change together. But when you communicate that very clearly, with a set of outcomes that you seek with metrics, one, it allows you to better facilitate the reporting out so that you have decision useful information, whether it's an investor that says do I want to invest in this company, whether it's a potential employee that says, Do I want to come to work for this company, we do have to make sure that our reporting is approachable in a way that people understand what what matters most to you as a company. Where are you making progress? And then how do you communicate the progress or the good areas of opportunity that you have that then allows you really to then activate your employees to be able to drive change because they've got clarity on where you're trying to make progress. So one of the things that we are doing this year, because the term ESG has people saying, well, what is it how do I get involved in it? And so we're trying to connect the dots from ESG is, you know, how you measure and communicate, but we've been on this journey for more than 20 years. And so you have to connect that to them. But we're doing we're leveraging our employee engagement programs that live in our community impact team. So when you think about volunteering together or giving together you really want people understanding ESG and then how they can act together. So for our environmental programs, we've got a whole environmental engagement portfolio that allows people to understand what can you do at work to make progress toward our goals, but what can you also do at home in order to do more so it's a learning platform that also is about activating them, but it is also a way to familiarize them with our focus areas and our goals as a way of learning. And so we're kind of tying all those things together which support the culture that will drive you toward long term success against those goal areas.

Shay
In Thank you, I think this this challenge of I know when I first took this role, the challenge was we have so many fantastic things happening around the company, how do we ensure employees really understand how these efforts are connected? And ultimately, to your point about clarity, the impact that those things are making in when we're falling down and when we need to make adjustments. So thank you I want to throw this question out. This is really around and maybe Mal and I can toss it to you first and then the panel can can weigh in. A lot of this is overwhelming. I mean, let's just think about it for a minute. Okay, we have complexity all over the place and we're used to certainly a complex environment with lots of regulation. But a lot of these areas are new to us, right? I mean, we're talking about areas now where we have to do standardization and reporting that were not a part of our remit, even five to 10 years ago. Can you talk to us a little bit about how can we reduce the anxiety give us give us some thoughts on where we need to sort of breed and make sure we start so that we don't let we don't let perfection get in the way of progress.

Malin
Well, first of all, I mean it is the best way to read things. It is to understand that sustainability is what we the planet the world needs and is going to be the thing that will help us create SAS tomorrow both for companies, but for the environment for us as humans and just the whole planet. So it is really being getting on board with a very, very positive journey, an ongoing journey. The second is on that to that it's ongoing. So I mean it is one step at a time by defining really what is core what is the most and material aspects. Understanding the impact gives you a scope. So defining your scope, setting your boundaries, and then starting with Okay, identifying those actions that you need to do to meet those most urgent goals. And just as you do with any other tasks, prioritize. Anybody knows if you've gone with a really large task you start with make a list. Start with what's the most important get that done first, then move on to the things that are sort of mid and then on to the things that can wait for that so just really doing it step by step because it is an ongoing journey. We're never going to be done. So really looking at it more as just this very basic integration into business, something you do bit by bit every day. And most important it's you never need to do it alone. Whoever is the chief sustainability officer has the whole team with sort of an excellent coach being the head of sustainability with the CEO, but going to employees and to customers and suppliers. Everybody's on board. I mean, everybody wants to be part of decreasing emissions, increasing diversity, strengthening the planet's resilience. Everybody wants to be a part of it. Everybody wants to join. When you do stakeholder dialogues you get the most positive fantastic ideas and responses. So I would say it's there's no point in having anxiety over that you're sort of building a better tomorrow and a strong planet. It's just to get cracking with it. It's the most excellent job you can have in the world.

Shay
Thank you, Alan. I think we all share share their passion. You're absolutely right. I want to Peter, I want to turn to you. You mentioned earlier we talked about farmer livelihoods and you think about our industry. You know tobacco combustibles are declining and that's a part of the mission right? We're we're migrating consumers, which means that farmer livelihoods. It's a Bible question. It's something that we have to think about. Can you tell me how farmland farmer livelihoods are part of the sustainability agenda?

Peter
It's an enormous part of the agenda but but but yeah, maximizing farmer livelihoods as a compete is a key part of our sustainability goals. And we do that in many different ways in live production itself. It's through working with seeds and technology to improve yields and improve qualities. But also what we're doing and we're very focused on is collaboration and and giving farmers the opportunity also to to grow produce and sell companion crops or or other crops and I can give a couple of examples of that. So in Brazil, we were 70% of our farmers grow maize. So what they didn't have access to was advanced seed and certain advice and input. So we went to Bayer, who have advanced seed that they generally sell to very large scale commercial farmers in Brazil. And we worked with them together and agreed a program where we would distribute the both the seed and the inputs and the advice in order to allow the smaller farmers to be able to grow this advanced product quality of maize. What we saw immediately in one year actually and it's continued throughout the program is that the farmer got an immediate 15% increase in their maize yields a $270 a year increase in their income and obviously dramatic improvement in food security, everything else that you're talking about. So a really nice collaboration that's expanded we're doing five over five and a half 1000 farmers this year in that program. And that is, of course, a very important thing that we do. And around the world. You look for different solutions like that. Then in Malawi, we've just opened a pinup processing facility. We've worked for five years on the genetics of the peanut plant in Malawi. And the reason for that is to try and develop peanut varieties and it's funny tobacco conference I'm talking about peanuts, but anyway is in order to reduce the natural toxin levels to allow Malawi once again to become an exporter of peanuts that they haven't been for 30 years. And we've been able to get there after five years of investment Science Technology practices. Everything else. And what this does is provide, you know this very significant for the farmer to have what we'd like to call complimentary crops because we still gotta grow tobacco plant and we want the farmer to grow trees. We don't want them to grow peanuts as well. But when you look at that, you can raise through all your products that farmer income level and make them sustainable farmer with an end market for those products.

Shay
So you've got to have these complete solutions. And that's what we're focusing on around the globe. And I think it's appropriate that you're talking about peanuts, because complex problems require non conventional solutions, right. So I like it. Let me ask this question to the panel. Given the the theme of our conference this year of accessing innovation, how can we better harness technology and innovation to achieve significant improvements in ESG?

Katerin
Index access to innovation and innovation platforms, I mean, there's always you know, you as a company you only have access to so much. If you really want to drive innovation, if you really want to drive sustainability moving forward, you need to be bold enough to look outside. You need to be you know, working across the boundaries. And I know that you know, coming from the outside to this industry, this is where it gets really uncomfortable for many, many people because this industry has been a lot about you know, exclusivity doing things in isolation. If you really want to drive this innovation moving forward, this industry needs to open up and it needs to open up across the value chain and needs to open up also to technology platform outside of where they normally have been working in the past. So I you know, I see that was my team moving forward is there's always we can't do that. We cannot go that path. We have never worked with that partner. We have never worked with that. Technology. Why should we do that? Because it's the right thing to do. It's as simple as that. So you need to look outside of where your comfort zones. You need to go over that barrier of being really uncomfortable and say it's just give it a try. And then you know it comes to the anxiety question. Is it's okay to make mistakes, you're not going to be right 100% of the time. And we all commit ourselves to do that more often. Every single day. I think, you know, we're looking forward to a better future.

Jennifer
I mean, part of the conversation that we heard earlier is that the manufacturers need you it was a question about inside or outside. Right? Where does innovation live? And it's yes, and and I think that is the shift that we're seeing in the industry. I know I can speak to what I've observed it our company, which is what do you do organically? And now what do you do through a broader set of partners? So again, technology does play an important role. I go back to the question you posed earlier and the anxiety it is about focus. And you want to focus your technology against those big problems that you're really trying to solve. For that your stakeholders saying, this is the most important thing that you need to be doing and this is what we expect of you. So as I think about the innovation in harm reduction, technology is going to be critical. But then we also have to look at what are other uses of technology in order to engage the consumer to make sure that they have an awareness, access to engagement with these potentially reduced risk products. So I think technology does play a key role and needing to do more outside of your own four walls. In order to innovate with technology is going to be important.

Shay
Peter Malin anything to add?

Malin
I would say the bringing sustainability into the innovation because as looking from an outside perspective, though, is a enormous amount of research and innovation that just is within the industry itself. And as I'm proud to hear today as well, just looking into new products and being on that sort of constant transformation journey. Is a very innovative culture in itself and as everybody is very adoptable to it, and to bring sustainability into this innovation, looking at sort of all the technology that can be used in circular economy practices and really bringing everything from the farmers, the innovation on sort of how they felt to be so careful and protective of water, just the low amount of pesticides. So bringing that innovation that has been ongoing in industry for many, many years into the new categories. And then to do sort of new products and introducing specifically sort of reuse and just lowering emissions, I would say. So if this industry can bring that innovation that's already has into the new products, I think the industry is going a very sustainable future to in the future.

Shay
Thank you, Alan. Peter, last word on this.

Peter
I think innovation is key when it means not just innovation in inputs into the innovation in culture to write and innovation and people that you've really got to have this transformation going across the company so we look at it everything from genetics to electronic data, capturing systems to new ways and new varieties of growing and planting crops. It's key and every year. We encourage we're doing massive amount of r&d in terms of what we can roll out in the future to continue to improve.

Shay
Thank you. Thank you so much. We are now at time. This is when Patrick brings out the hook to pull me off stage. So I want to first thank our panel for just some great insights. Really good discussion. And broadly to GDnf, thank you for having this topic on the agenda critically important. We certainly appreciate your interest and look forward to what the future holds as we drive sustainability forward. Thank you