Water Stewardship for A Better Tomorrow: Our Ongoing Commitment and Achievements

Welcome to Driving Momentum – the Reynolds American organization’s newsletter that shares the latest moments driving our transformation journey towards A Better Tomorrow? by Building a Smokeless World. Want to stay in the know? Click the “subscribe” button above.

Navigating Water Challenges: Addressing Critical Obstacles for Our Business

Reynolds American is an indirect subsidiary of the global BAT Group, and the U.S. is the global Group’s largest end market. Last year, the BAT Group used 86% of its water in its operations and only 14% in offices. Understanding both the impact the global Group can have on water supplies and the impact short water supplies would have on business, BAT has set water targets to reduce, recycle, and improve water stewardship across the business. By 2025, the global Group aims to reduce water withdrawn by 35% (vs. 2017 baseline) and increase the water recycled rate to 30% within the U.S. and across global operations.

Over the past few years, our Operations Sustainability team has tackled the water basics including achieving Alliance for Water Stewardship-certification at our facilities, optimizing processes, eliminating losses, and where possible, increasing water recycling.

To meet our water goals and protect our community water supply, we’ve made waves by taking the additional step to invest in an advanced on-site water recycling facility, known as the Reynolds WaterHub. Once complete, the WaterHub’s world-class technology will capture a combined wastewater stream, treat it to NC reclaim water standards, and reintroduce it as intake water for the factory, aiming to save 60 million gallons of water annually. This investment reflects our dedication to water conservation and stewardship both locally and globally.

100% of Operations Sites Alliance for Water Stewardship-Certified

We are proud to have closed out 2023 with 100% of our operations sites being Alliance for Water Stewardship-certified. Alliance for Water Stewardship Standard is a globally recognized framework that allows water users to better understand their water use and impacts, and to work collaboratively and transparently toward sustainable water management within the catchment context.

Reynolds WaterHub Construction Underway at the Reynolds Operations Center

In September of 2023, we officially broke ground on the WaterHub with construction expected to be complete by the end of 2024. Once operational, the facility is expected to reclaim more than 60 million gallons of water per year, equivalent to the annual water supply of 550 average U.S. households.

With the initiative, we aim to reduce water withdrawn by over 40%, which in turn would reduce the water withdrawn across global operations by 6%. And that’s not all; with the WaterHub, the Reynolds American organization’s water recycled rate aims to jump from 19.5% in 2023 to more than 40%, surpassing the global goal of a 35% recycling rate and increasing the water recycled by 5% on an annual basis. That’s a lot of water!

The WaterHub facility will also include a unique conference room and greenhouse – areas that will be beneficial for educating employees and visitors on Reynolds American’s sustainability journey and the importance of environmental excellence for the organization. View the video above to see our construction progress over the past week.

Recognition by SEAL Business Sustainability Awards for WaterHub

Recently, Reynolds American was named a recipient of the SEAL Business Sustainability Award in the Environmental Initiative category for the expected positive impact of the WaterHub and efforts to preserve and make efficient use of water. Great work, team!

What are the SEAL Awards, you ask? The SEAL Business Sustainability Awards honor leadership, innovation, and commitment to sustainable business practices. The Environmental Initiative Award specifically evaluated applicants on impact metrics, innovation and uniqueness of the initiative, sharing of insights and best practices, and investment of organizational leadership capital.

Water Withdrawn Reduction in Manufacturing and Operations

In addition to recycling water, our Operations Sustainability team has been making a splash by addressing necessary changes at our facilities to use less fresh water. Between 2017 and 2023, we reduced our water withdrawn across our operations by 31%. Some innovative tactics the team has utilized to do so include:

·?????? Integrating a new open chilled water loop treatment

·?????? Improving boiler cycles and cooling tower operation

·?????? Reducing air washers cleaning cycles

·?????? Recovering and reusing vacuum pump water discharge

·?????? Reducing operation site footprint

·?????? Optimizing production and reusing washdown

·?????? Returning condensate to boilers

Employee Spotlight: Steven Jones, Director of Technical Services

Speaking of the Operations Sustainability team, meet Steven Jones. Steven is the project manager behind the new state-of-the-art WaterHub who is chartering new waters of achievement. He is a Tobaccoville, NC native and a legacy employee, joining the Reynolds American organization in his grandfather, uncle, and father’s footsteps, but distinctive to his journey, as an engineer.

Managing this project has come with its own hurdles. He describes the project saying, “This project is one-of-a-kind in our organization and there were a host of challenges: from revising permits with our local municipality for sanitary discharge, to working out the logistics of another company operating a separate facility on our property. The team had to be flexible, and the leadership team here empowered us to make quick decisions to keep the project on track.”

The team has continuously reframed their thinking and challenged the status quo which has led to their success thus far.

We hope you enjoyed this edition of Driving Momentum. Let us know your thoughts in the comment section, give us a like, and subscribe for future updates. Want to stay current on the latest news and updates from the Reynolds American organization? Follow our social media channels: LinkedIn, Facebook, Instagram, X

Reynolds American Inc. (RAI) is a wholly owned U.S. subsidiary of the global BAT Group and the U.S. parent company of, among others, R. J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc.; American Snuff Company, LLC; R. J. Reynolds Vapor Company; Modoral Brands Inc.; RAI Services Company; and Reynolds Marketing Services Company. References to “Reynolds,” "Reynolds American," “we,” “us,” “our”, and “organization” are for convenience and collectively refer to RAI and/or RAI’s independent operating subsidiary companies.

Forward-looking Statements and Other Matters

This document may contain certain forward-looking statements, including "forward-looking" statements made within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

These statements are often, but not always, made through the use of words or phrases such as “believe”, “anticipate”, “could”, “may”, “would”, “should”, “intend”, “plan”, “potential”, “predict”, “will”, “expect”, “estimate”, “project”, “positioned”, “strategy”, “outlook”, “target” and similar expressions. These include statements regarding our ESG targets.

All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors. It is believed that the expectations reflected in this document are reasonable, but they may be affected by a wide range of variables that could cause actual results and performance to differ materially from those currently anticipated. A review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found by referring to the information contained under the headings “Cautionary Statement” and “Group Principal Risks” in the 2023 Annual Report and Form 20-F of British American Tobacco p.l.c. (BAT)

Additional information concerning these and other factors can be found in BAT's filings with the U.S. Securities and Exchange Commission (“SEC”), including the Annual Report on Form 20-F and Current Reports on Form 6-K, which may be obtained free of charge at the SEC's website, https://www.sec.gov/ and BAT's Annual Reports, which may be obtained free of charge from the BAT website https://www.bat.com/.

The forward-looking statements reflect knowledge and information available at the date of preparation of this website and we undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on such forward-looking statements.