ITA APC Annual Report & Action Plan
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Imperial Tobacco Australia Limited Australian Packaging Covenant Annual Report and Action Plan 2016-17 Annual Report 2017-18 Action Plan Company Profile STATEMENT OF COMMITMENT This year, Imperial Tobacco Australia has renewed its support for the Australian Packaging Covenant and is enthusiastic to support the new strategy and direction of the Australian Packaging Covenant Organisation. ITA is a long-term signatory to the APC, first signing to the Covenant in 2002, and has remained committed to address sustainable packaging in ways relevant for our business. Packaging sustainability is a key pillar in our environment sustainability approach to minimise our environmental impact. This Annual Report is the first report under the APCO’s new strategy and reporting framework. The Report covers our financial reporting period - October 2016 to September 2017. In FY 2017, we worked to set a new baseline to measure packaging sustainability against the packaging sustainability framework reporting tool. Our key achievements to date include: Reviewed 100% of our packaging using the Sustainable Packaging Guidelines to identify opportunities which could improve the sustainability of our packaging Introduced 2 new packaging formats which have improved product and packaging sustainability, however unfortunately these have since been withdrawn from market. Introduced a new packaging sustainability assessment process for new packaging or packaging changes Set a baseline for renewable packaging – 86% by weight of packaging is made from renewable materials - and working towards setting a baseline for packaging optimisation and recoverability Commenced review of our business to business packaging to understand opportunities to reduce single use business to business packaging. Maintained best practice recycling systems at head office – 78% of our waste was recycled in the reporting period. We also investigated new opportunities to divert product destructions from landfill, we were able to divert 15% of product returns to compost facilities. Maintained our commitment to buying recycled products - including company stationery, copy paper, office stationery, and trade marketing materials. In total, we helped close the recycling loop by buying back 68% amount of material we recycled; Continued to support for the Tobacco Industry Product Stewardship Group to tackle butt litter. Whilst we face legislation which restricts our ability to make major changes to our packaging, we are committed to continually review our packaging to identify better materials to improve our packaging sustainability. Our commitments for 2017-18 are outlined in this report. We look forward to continuing our commitment to the Covenant and reporting our progress in 2019 Sincerely, Wayne Merrett General Manager Imperial Tobacco Australia March 2018 2 | P a g e Company Profile COMPANY PROFILE Imperial Tobacco Australia Limited (ITA) is a subsidiary of Imperial Brands PLC. As part of a larger international group, we have extensive operations in the sale of cigarettes; fine cut tobacco and pipe tobacco, cigars, rolling papers and accessories. In Australia, ITA is a packaging user and brand owner. Market Share Table 1 details ITA’s market share of tobacco and tobacco related products sold in the Australian market. Table 1: ITA Product Market Share in 2016-17 (Source: IRi All Channels Scan MAT) Product market (Australia) Market share Tailor made cigarettes 29.3% Fine cut tobacco 52.2% Cigarette and Loose Tobacco Portfolio Our Australian brand portfolio for cigarettes and loose tobacco products is detailed in Table 2. All brands are imported: Table 2: ITA Brand Portfolio in 2016-17 Cigarettes Pipe and Fine Cut Tobacco Camel Bank Davidoff Champion Escort Dr Pat Horizon Drum JPS Escort Peter Stuyvesant Golden Virginia Horizon JPS Peter Stuyvesant Stockman's White Ox Amphora Log Cabin Packaging materials Our packaging is regulated under the Tobacco Plain Packaging Act 2011, which prescribes the format and appearance of packaging. There are 3 main packaging types used to package our major product categories: 1. Tailor made cigarette 2. Fine cut tobacco 3. Pipe tobacco 3 | P a g e Company Profile Tailor made cigarettes and fine cut tobacco packaging is made up of several packaging components which are fused together, and therefore is considered a composite material. Packaging layers are listed in Table 3. Table 3: Packaging components for ITA products Tailor made Cigarettes Fine Cut tobacco Pipe tobacco Shipper Shipper Shipper Carton wrap Bundle wrap Tin Pack wrap Pouch wrap Tin liner Pack foil Pouch Pack frame Business Locations The Imperial Tobacco Australia Limited head office is located at: 4-8 Inglewood Place Norwest Business Park Baulkham Hills NSW 2153 Sales offices are situated in the following locations around Australia: Mulgrave, VICTORIA Darra, QUEENSLAND Adelaide, SOUTH AUSTRALIA 4 | P a g e Company Profile APC MANAGEMENT Our Australian Packaging Covenant obligations are managed as part of our broader corporate sustainability approach. Globally, our business strategy includes a commitment to ‘Respect Natural Resources’ which is also reflected in our local approach. We focus on 5 key areas to reduce our environmental impact 1) reduce resource consumption 2) recycle to avoid landfill, 3) sustainable supplier engagement 4) packaging sustainability and 5) litter reduction. Our APC action plan is incorporated into the business environment plan. Plans are developed and reviewed annually as part of our continual improvement program. The plan is owned and implemented by a cross-functional team including representatives from: Corporate and Legal Affairs; Procurement; Operations; Product Quality; Logistics; and Information Services We also have a volunteer ‘Green Team’ committee which gets together to discuss new environment programs and engage staff to reduce our environment impact. 5 | P a g e Company Profile 2016-17 PERFORMANCE SUMMARY Overview of reporting framework The new APC annual reporting tool provides an improved framework to assess packaging sustainability. The framework is divided into 3 categories and 13 categories relevant to packing sustainability covering areas of strategy and commitment, packaging design and sustainability, packaging recovery and supply chain influence. Further, there are 6 core criteria which we are required to address and 7 recommended criteria. A summary of APCO reporting criteria can be found in Figure 1. Members are rated against each criteria from ‘Getting started’ to ‘Beyond best practice’, producing an overall position. Members are then required to implement actions to improve their rating Figure 1: APCO Annual reporting criteria 2016-17 report rating In 2016-17, we focussed on setting a new baseline to measure progress in meeting the new APCO criteria and to maintain previously implemented programs which support our APC and broader environment commitments. We responded to 10 out of 13 criteria (6 core and 4 recommended criteria) and were scored overall 46% rating our performance in the ‘Advanced’ category. A summary of our score can be found in Figure 2. Figure 2: ITA 2016-17 annual report rating A detailed summary of our performance rating can be found in Table 1. 6 | P a g e Table 4: ITA report rating and progress for 2016-17 Criteria Objective Report rating 2016-17 outcomes 1. Leadership ITA has an Environment Policy which states the company commitment to sustainable 1.1 Packaging Integrate packaging Beyond best packaging - "Encourage sustainable design as a fundamental part of local brand Sustainability sustainability goals practice development, and work with global packaging teams to continually improve the Strategy and targets in sustainable features of our packaging". corporate strategy, Our Environment Plan states sustainable packaging is a key focus area of the business including use of the environment response. Further detail of our actions to meet the APC criteria are Sustainable addressed in the company Environment Action Plan for 2017-18 FY. Packaging Targets for packaging sustainability are documented in our Action Plan. Guidelines (SPG) or equivalent 100% new packaging or packaging changes reviewed using the Sustainable Packaging Assessment process. 100% packaging groups reviewed against the Sustainable Packaging Guidelines annually. 2 new sustainable packaging opportunities, to improve packaging optimisation, or improve the percentage of renewable, recyclable, recycled materials used, and post-consumer recovery of packaging investigated annually 70% recycling rate achieved at all company sites. Collaborate with the Tobacco Industry Product Stewardship Group to investigate opportunity to recover flexible plastic consumer packaging. Investigate 1 opportunity to reduce or improve reusability and recyclability of business to business packaging by end 2018. Our Action Plan is owned, managed and implemented by a cross-functional team including representatives from Corporate and Legal Affairs, Product Quality, Corporate Services, Procurement, Information Services and Logistics. Whilst we don’t have a documented Environmental Management System, an annual review of our environmental drivers and impact areas is conducted to continually improve our environment response. This is reflected in the annual review of our Action Plan. Company Profile Criteria Objective Report rating 2016-17 outcomes 1.2 Closed Encourage supply Getting started We participate in the Tobacco Industry Product Stewardship