Other topics outside our focus areas
Our Code of Conduct covers important sustainability topics above and beyond our five focus areas. It includes our policies on practices regarding ethical business, employment and labor, the environment and workplace.
For best impact and transparency, we believe that group-wide efforts and reporting are most effective if concentrated to key focus areas. Through participation in the Sustainable Tobacco Program, STP, we also address a broad array of key sustainability issues in our tobacco supply chain.
Some of the specific questions we have received from external stakeholders relate to deforestation and biodiversity, water stress and occupational health and safety. More explanations are provided below with regards to why these topics are not included in our Group sustainability focus areas and how we approach them.
Deforestation and biodiversity
Swedish Match does not own any other farms except for our forestry plantations in Brazil. Our plantations in Brazil comprise poplar and pine wood in two reforestation projects in the south of the Paraná state and in the north of the Santa Catarina state. We replant more than we harvest every year for our pine forest. Based on normal annual harvesting, this involves replanting approximately 150 hectares annually. Due to the combination of declining demand of matches and technological advancements on our side that have enabled wider usage of pine wood, we have sold a majority of the land used for poplar plantations in Brazil. Our ownership of land measured by hectares has been reduced by 32 percent over the past two years, from 5,958 in 2018 to 4,062 in 2020.
Our operations in Brazil protect biodiversity in the plantation by, for instance, restraining external human access to its lands and forests, prohibiting hunting and fishing, and keeping surveillance services in forests. We stopped using pesticides for forestry disease control in 2018.
In our tobacco supply chain, a vast majority of the tobacco used does not require wood fire in its processing. Processing that dries the tobacco over an open wood fire might in some cases lead to deforestation. In addition, we address the issue through participation in STP. Under the new STP, there will be a dedicated theme for Natural habitats. All the participating suppliers will be subject to generic risk screening and self-assessment to evaluate their impact on deforestation and biodiversity in the local communities where they operate.
If our suppliers have subsidiaries located in geographies where there is an elevated risk of non-compliance with the high standard set by STP for deforestation, in-depth assessments will be performed by a third party with subject expertise. Results of these assessments will form the foundation for a dialogue for improvement between us and the suppliers.
Swedish Match neither withdraws water from any source that is significantly affected by the water withdrawal, nor discharges water into sensitive water bodies. Swedish Match’s water footprint in absolute terms is fairly low as the Company’s production processes require rather low water usage. Our smokefree products are manufactured in Sweden, Denmark and the US. For cigars, matches and lighters, a significant proportion of our production occurs in the US (cigars), Sweden (matches) and the Netherlands (lighters) which are areas that have well-developed regulations with regard to water sourcing and use.
One area where Swedish Match needs a higher water supply is for its poplar farms in Brazil where trees historically have been planted to be used in the Brazilian match production. Drier periods during spring and summer may lead to a higher necessity of irrigation. However, as mentioned earlier, our technological advancements made in recent years have enabled us to replace the majority of the poplar wood used in our match production with pine wood. Unlike poplar plantations, pine plantations do not need any irrigation. With this initiative we have reduced our own water use to an even lower level.
We address potential issues related to water use from our tobacco supply chain through participation in STP. Under the new STP, there will be a dedicated theme for water stewardship with a similar due diligence process as described under deforestation.
Occupational health and safety
Employees’ safety and well-being are matters of high importance to us. We believe that specific activities carried out at the divisional level are in place to help ensure the physical and mental wellbeing of our employees. This has been demonstrated by the different measures taken place locally to protect our employees during the COVID-19 pandemic. Each division tracks safety metrics for employees and subcontractors and reports data to the CEO.