The environmental externalities of tobacco manufacturing: A review of tobacco industry reporting

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Abstract

Growing research and public awareness of the environmental impacts of tobacco present an opportunity for environmental science and public health to work together. Various United Nations agencies share interests in mitigating the environmental costs of tobacco. Since 2000, transnational tobacco industry consolidation has accelerated, spotlighting the specific companies responsible for the environmental and human harms along the tobacco production chain. Simultaneously, corporate social responsibility norms have led the industry to disclose statistics on the environmental harms their business causes. Yet, independent and consistent reporting remain hurdles to accurately assessing tobacco’s environmental impact. This article is the first to analyze publicly available industry data on tobacco manufacturing pollution. Tobacco’s significant environmental impact suggests this industry should be included in environmental analyses as a driver of environmental degradation influencing climate change. Countries aiming to meet UN Sustainable Development Goals must act to reduce environmental harms caused by the tobacco industry.

Keywords: Drivers of climate change, Industrial externalities, Product manufacturing, Sustainability, Tobacco industry

Introduction

The World Health Organization’s (WHO) 2017 report “Tobacco and Its Environmental Impact: An Overview” calls attention to the environmental burden of growing, curing, packaging, transporting, manufacturing, and distributing 6.25 trillion cigarette sticks annually (Hendlin 2017; Kelly 2017; World Health Organization 2017a). So far, the global tobacco control agenda has mainly focused on the one billion smokers and seven million people per year dying globally from tobacco use and exposure (Ng et al. 2014; Novotny et al. 2015; Reitsma et al. 2017; World Health Organization 2017b). Yet, important research examining deforestation (Otañez et al. 2009; Otañez and Glantz 2011; Eriksen et al. 2015) and cigarette butt waste (Novotny et al. 2009; Healton et al. 2011; Slaughter et al. 2011; Curtis et al. 2014) has made the public health case for confronting tobacco’s environmental impact—creating allies between public health and environmental interests (Freiberg 2014; Curtis et al. 2016; Wallbank et al. 2017).

Tobacco smoke emissions from cigarettes alone on a global scale contribute significant masses of toxicants to the global environment. In a single year, direct emissions from smoking contribute tens of thousands of metric tons of known human carcinogens, toxicants, and greenhouse gases (Repace 2004). Toxic emissions from all smoked cigarettes annually include an estimated 3000–6000 metric tons of formaldehyde and 12 000–47 000 tons of nicotine (Novotny et al. 2015). In addition, three major greenhouse gases are released in significant amounts via tobacco smoke: carbon dioxide, methane, and nitrous oxides (Gilmour et al. 2006; World Health Organization 2017a). One study found that the environmental pollution from smoking three cigarettes caused up to ten times the small particulate matter (PM2.5) concentrations of idling a diesel car engine for 30 minutes (Invernizzi et al. 2004).

Hand in hand with tobacco’s ecological harms, the environmental justice consequences of tobacco are pressing. The human harms from deforestation (Lecours et al. 2012; Leppan et al. 2014; Jew et al. 2017; Jimu et al. 2017), farm workers suffering from green leaf sickness (Schep et al. 2009; Benson 2011; Faria et al. 2014; Bonamonte et al. 2016), soil exhaustion (Leppan et al. 2014), and other fallout from tobacco farming, mostly occurring in low- and middle-income countries, has become legible to environmental organizations, governments, and intergovernmental institutions. The sizable environmental impact of cigarette butt litter—the most pervasive litter item found on beach clean ups (Novotny et al. 2009; Novotny and Slaughter 2014)—also pollutes terrestrial and aquatic ecosystems (Healton et al. 2011; Slaughter et al. 2011).

Industrial ecology research on product lifecycle analysis, however, has yet to adequately address the tobacco industry’s considerable contribution to environmental pollution and degradation (Trucost 2009).

The United Nations’ Sustainable Development Goals (SDGs) which aim to address global challenges to both sustainability and development (United Nations 2015a), incorporate as target 3a the WHO Framework Convention on Tobacco Control (FCTC) (World Health Organization 2003; United Nations 2015a, b), the landmark international treaty and global governance structure ratified by 181 countries to reduce the damage of the tobacco epidemic. This reinforces the need to focus on tobacco as a global industry considerably contributing to environmental degradation and health inequalities (Kulik et al. 2017). Increasingly, the reinforcing effects of environmental sustainability and public health dovetail in their fight to reduce the consequences of tobacco.

This article is the first to review the environmental costs of tobacco manufacturing with the industry’s own published data. While estimations exist (Zafeiridou et al. 2018), quantifying the environmental damage of the tobacco industry has not yet been fully measured, understood, or acted upon. This is due in part to a lack of accurate, reliable, independent environmental reporting and data transparency. Until the early 2000’s, few data were publicly available. Since the early 2000’s, some data has been made voluntarily available through pressure on the industry to abide by prevailing corporate social responsibility (CSR) standards, although these reports are neither systematic nor standardized. Nonetheless, analyzing the tobacco industry’s own data reporting the environmental costs of tobacco manufacturing clarifies the contribution of tobacco to environmental pollution, even if this self-reported data emerges from flawed methods and an overly narrow scope.

Methods

Our analysis proceeds from the self-reported industry data published in public documents. From January through May 2018 we examined tobacco industry sustainability reports and annual investor reports from 2005 to 2018, as well as UN Global Compact reports (before tobacco companies were excluded from this organization in September 2017), Carbon Disclosure Project reports, and other publicly available resources to gather industry-reported data on the environmental costs of tobacco manufacturing. Although we reviewed data since 2005, whenever possible, we used the most updated environmental reporting information available through July 2018. We also drew upon previous estimates of the environmental costs of tobacco in the peer-review literature and third-party reports.

The largest tobacco companies currently report their annual energy use, CO2-equivalent emissions, water use, water discharge, hazardous waste, and total waste, including or omitting different areas of reporting over time. For example, Altria does not report water discharge data, Japan Tobacco International (JTI) stopped after 2014 reporting intensity (number of cigarettes produced or millions of dollars of revenue per unit of pollution), and the granularity of reporting detail differs dramatically by corporation. To the extent possible, current data on these metrics is included here for six major tobacco companies: Altria/Philip Morris, Philip Morris International (PMI), Reynolds American Inc. (RAI, now a subsidiary of BAT), British American Tobacco (BAT), Imperial Brands (formerly Imperial Tobacco), and Japan Tobacco International (JTI). China National Tobacco Company (CNTC) is addressed separately, as the company, which produces more than 40% of the world’s cigarettes, appears to follow different voluntary reporting systems. Available manufacturing data pertain mainly to cigarettes, rather than to smokeless tobacco or electronic-cigarettes (e-cigarettes).

Theoretical framework and background

While the questions surrounding the tobacco industry’s corporate social responsibility (CSR) reporting and auditing are unique due to the scrutiny this particular industry receives, the problems of industry externalities and the lack of transparent third-party auditing are more general problems with the CSR paradigm shared by other companies (Tesler and Malone 2008; Hirshbein 2012; Fooks et al. 2013; McDaniel et al. 2016, 2018). Fernando and Lawrence (2014) propose an integrated theoretical framework for explaining CSR practices by bringing together three inter-related and complementary theories: legitimacy theory, stakeholder theory and institutional theory. This integrated approach supports the existing research on the motivation and impact of the tobacco industry’s own CSR efforts. While tobacco CSR programs and the marketing of these programs is constrained more than some industries (Dorfman et al. 2012; McDaniel and Malone 2012), insofar as in many developed countries they cannot use their CSR donations to explicitly promote their product to youth, nonetheless like other industries the tobacco industry seeks to profit from their CSR efforts and “neutralize” negative publicity (Gonzalez et al. 2012; Fooks et al. 2013). Our results are discussed through understanding that the tobacco industry’s efforts to reduce their environmental harms amount to CSR initiatives displaying a lack of transparency and independent verification, that limit objective assessment of the environmental impact of tobacco manufacturing.

Accounting for the environmental impact of tobacco manufacturing requires foremost having access to reliable data. Two problems arise: one procedural, the other epistemological. While environmental accounting in the last decades has become less haphazard and more scientific, it remains an inexact art. Open questions include: do consulting and auditing firms have full access to industry data, and is the industry reporting everything? Are companies aware of all externalities, or may there be other costs not yet reckoned due to conceptual blinders? Are these data being fully reported? From the tobacco industry’s publicly available materials, there are clear gaps and discrepancies from year to year. If the data exist, why are they not reported? If they do not exist, why not?

The lack of independent third-party oversight of these reports, i.e., oversight from agencies not directly paid and thus incentivized by tobacco company interests to favorably report, also is common among many industries, not just tobacco (Fooks et al. 2013). CSR “disclosure interaction effects” may take place if there is incentive on the part of management to deliver CSR goals, undermining the reliability of assurance agency reports for both investors and the public (Brown-Liburd and Zamora 2015). This problem exists across many industries. Although the Global Reporting Initiative aims to develop standards for CSR auditing, because CSR assurance companies operate in a “competitive, mainly unregulated market,” the credibility of directly industry-paid CSR assurances can lack, or be perceived to lack, credibility (Cohen and Simnett 2015).

Because tobacco’s particular harm to human and environmental health, and the non-essential status of the product, mandating data transparency for tobacco manufacturing warrants prioritization. Policies to provide a mechanism for outside accounting could consider tobacco product taxes to account for environmental impact, and then allow independent auditing of the tobacco industry using state funds, creating a financial firewall between industry and CSR assurance agencies. Currently, however, such an arrangement is absent. Piecemeal rather than organized reporting, and in-house rather than government or agency oversight on environmental pollution, greatly restrict current scientific assessments of the environmental impacts of tobacco product manufacture (Hirschhorn 2004; Moerman and Van Der Laan 2005; Palazzo and Richter 2005; Fooks et al. 2011). Stipulating a standardized metric, assessed by disinterested third-party reporting agencies would be a first step to accurately determine the true costs of tobacco production.

Research on what motivates industries to respond to their environmental and social impact exists for many industries, not just tobacco. Companies tend to act based on a mixture of novel policy constraints, updated risk assessments, cost offsets, and the business opportunities that arise in tackling externalities (Agrawala et al. 2011; Glaas et al. 2017). Brand image is also crucial to a CSR calculus (McDaniel and Malone 2009; Hastings 2012). Some companies have been shown to spend more money on advertising their CSR than they actually spent on sustainability or social responsibility projects (Gonzalez et al. 2012; Hastings 2012; McDaniel et al. 2018). Minimizing environmental harms through comparison with other industries is also a common tactic. For example, in PMI’s 2016 “Communication on Progress” for the UN Global Compact, PMI minimizes the water costs of tobacco, arguing that “[t]obacco growing and manufacturing take around one-third of the water required to make the same amount of tea or one-sixth that of coffee or chocolate (per weight of finished product)” (Philip Morris International 2016). PMI’s comparison attempts to put tobacco on par with these other products, ignoring the differentiator that these other products do not kill one in two of their daily users, as tobacco does (World Health Organization 2017b).

Tobacco companies appear to place the environmental externalities and global environmental impact of their business lowest in their list of priorities (Fig. 1 ), overlooking that the environmental costs of tobacco manufacturing and distribution extends beyond these companies. This may be due to fiduciary responsibilities, or a lack of research and awareness of tobacco’s environmental harms. The latter reason is supported by the fact that the Framework Convention Alliance (FCA), an umbrella group of tobacco control NGOs supporting the FCTC, in a literature review on each of the FCTC’s 38 articles, could not identify any literature on tobacco and the sustainable management of water and energy for their 2015 data report (Framework Convention Alliance and Campaign for Tobacco-Free Kids 2015). The FCA’s inability to locate relevant studies on the sustainability of the tobacco manufacturing reveals the need for systematic and independently verified data.