Other topics outside our focus areas
For best impact and transparency, we believe that group-wide efforts and reporting are most effective if concentrated to key 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, as well as job and workplace. We also address a broad array of key sustainability issues in our tobacco supply chain, by primarily purchasing from large global suppliers with robust due diligence processes and through participation in the Sustainable Tobacco Program (STP).
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 farms other than our forestry plantations in Brazil. Our plantations in Brazil comprise pine wood in a reforestation project in the south of the Paraná 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 for matches and technological advancements on our side that have enabled wider usage of pine wood, we have been able to replace the majority of the poplar wood used in our match production with pine wood and also sold off our land used for poplar. Swedish Match owns a total of 3,419 hectares of pine forestry but the Group’s biological assets comprise both poplar and pine forests, 3,686 hectares, which also includes poplar land we do not own but have the right to harvest from.
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 STP, there is a dedicated reporting theme, Natural habitats. All the participating suppliers are 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 relatively 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 has previously needed 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 for 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 and we have sold off our land used for poplar. 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 STP, there is a dedicated reporting theme for water stewardship with a similar due diligence process as described under Deforestation and biodiversity.
Occupational health and safety
Employees’ safety and well-being are matters of high importance to us. Swedish Match is dedicated to providing ergonomically sound workplaces, free from health and safety hazards. Specific activities, including safety trainings and wellness programs, are carried out at the divisional level to ensure the physical and mental wellbeing of our employees. This has also been demonstrated by additional measures taken place locally to protect the well-being of our employees during the COVID-19 pandemic. Each division tracks safety metrics for employees and subcontractors and reports data to the CEO. Furthermore, periodic inspections are conducted by an independent third party at major production facilities. These inspections assess, among other things, to what level the facilities meet Swedish Match work safety standards and determine whether there are actions required to further reduce risk.