Reduce greenhouse gases
Our goal is to reflect the commitments outlined in the Paris Agreement and thereby reduce emissions of greenhouse gases in our value chain.
Our operations are highly dependent on resilient eco systems; we cannot do business without significant input of raw material from nature. The effects of climate change pose a risk to all of us. At Swedish Match, we acknowledge the severity of this issue and we welcome the rising ambitions within the corporate sector at a global scale. We commit to do our part in addressing climate change and to set science-based targets for our business’ value chain.
We assess risk related to climate change on a recurring basis for our own operations and for raw material supplies. With a value chain perspective we have good opportunities to contribute in creating a positive impact through collaboration with partners, enhanced assessments and directed mitigation and adaptation actions, in the longer term.
Accounting for greenhouse gas emissions in our value chain1)
We have assessed and reported greenhouse gas (GHG) emissions for direct emissions (Scope 1), indirect emissions (Scope 2) and part of other indirect emissions not covered in Scope 2 (Scope 3), according to the Greenhouse Gas Protocol2), since 2008. In 2016, we extended our scope for GHG emissions and mapped the full value chain according to the Corporate Value Chain Standard (Scope 3) of the Greenhouse Gas Protocol. In 2017, the accounting was refined and figures for 2016 have subsequently been restated. This is mainly due to the use of more specific emission factors for input materials with large impact on the overall results.
The GHG emissions across the value chain amount to 205,817 tons CO2-equivalents (CO2e) for the year 2017. Raw material and supplier stages (lifecycle data for purchased goods and services) account for 64 percent of total emissions. Factory/Warehouse/Office account for 20 percent (Energy and fuel use, waste generated in our own operations as well as business travel3)). Transportation between the different stages in the value chain accounts for 4 percent. The customer (chillers for snus in stores) and consumer stages (use of lighters and matches as well as end-of-life treatment of products) account for 7 and 5 percent respectively.
Emissions from our own operating units (Scope 1) and emissions from purchased energy used in our own operations (Scope 2) account for 15 percent of the total GHG emissions. The remaining 85 percent include emissions both up-and downstream (Scope 3) in our value chain. The larger part of the Scope 3 emissions stem from the extraction and production of raw materials, e.g. tobacco, timber and nylon, as well as packaging material.
Our GHG accounting includes the full Scope 3 and covers data for all operations controlled by Swedish Match. Generic emission factors have been used to a large extent to calculate emissions4). All six GHGs covered by the Kyoto Protocol5) are included in the calculations and assumptions and emission factors have followed a conservative approach.
Reducing GHG emissions in a science-based manner
This past year we have developed an emission reduction strategy with science-based targets, based on the revised measurement made in 2016. Science-based targets are in line with the level of decarbonization required to keep the rise in global temperature below 2°C compared to pre-industrial levels6). In this process we have been guided by the methodology of the Sectoral Decarbonization Approach7) (Other Industry8) pathway) and made use of the associated calculation tool to form a basis for our decision. Our aim is to reduce emissions by 75 percent by 2050, with 2017 as the base year. This would render absolute emission reductions of 4 percent per year, every year, until 2050. Our interim targets are emission reductions of 12 percent by 2020 and of 41 percent by 2030. We have committed to set these targets through the Science Based Targets Initiative (SBTi) and expect validation to be completed in 2018.
Our GHG reduction targets have been set by the Group Management Team and approved by the Swedish Match AB Board of Directors. The responsibility to achieve the targets has been delegated to heads of our divisions. This organization assures that targets are integrated into, and continuously followed-up upon, as part of normal business operations and review processes.
In the process of setting targets, we have identified a wide range of actions to be taken in pursuit of reducing our value chain emissions. Action plans have been set and responsibilities have been distributed across the Group for main sources of emissions. Initial actions include revisiting procurement practices and replacing materials and energy (resources) with alternatives of lower carbon intensity, using resources more efficiently, engaging with business partners, and, in the longer term, developing products with lower carbon intensity. We will also continuously aim to enhance our accuracy in the GHG accounting, which will help us to find further potential for reduction and to set the right priorities for our actions.
Accounting accuracy may be enhanced by acquiring more specific information on emissions from our suppliers, and preferably their suppliers (e g life cycle data) to increasingly replace generic data, as well as re-evaluating general assumptions made. Revisiting procurement practices and replacing resources with alternatives includes addressing GHG criteria/carbon intensity in purchasing and supply chain management processes, as well as investigating possibilities to increase use of recycled or renewable materials and energy. Using resources more efficiently includes, for example, reducing material usage as well as waste generated at our own operations. Engaging with business partners – suppliers and customers – includes, apart from emission data, encouraging them to pursue a science-based approach to emission reductions.
1) Figures described in this section are based on best available information and are subject to revision. Revised figures will be presented when available.
2) International standard for calculating and reporting climate impact from business activities.
3) Business travel is allocated to Scope 3 in the GHG accounting but has been included in our own operations in the distribution of emissions across our value chain stages.
4) Main sources of reference for emission factors include DEFRA, Ecoinvent and IEA.
5) IPCC Fourth Assessment Report.
6) As described by the Intergovernmental Panel on Climate Change (IPCC).
7) Sectoral Decarbonization Approach (SDA): A method for setting corporate emission reduction targets in line with climate science. (2015). www.sciencebasedtargets.org.
8) The “Other industry” sector includes all industries that cannot be allocated to the industry sectors Iron & steel, Cement, Aluminum, Pulp & paper and Chemicals & petrochemicals, e.g. food, beverage and tobacco processing.
|Greenhouse gas emissions (metric tons CO2e)||2017||20161)|
|Total emissions (per MSEK sales)||12.8||13.2|
|Emission reductions, %||3||N/A|
1) Figures restated following further analysis.
|Energy use in our own operations (MWh)||2017||20161)|
|Direct energy use||90,045||99,970|
|Indirect energy use||85,495||84,145|
|Total energy use||175,540||184,115|
|Total energy use (per MSEK sales)||10.9||11.4|
1) Figures restated following further analysis.