SUSTAINABILITY PERFORMANCE SUMMARY 2019

2Imperial Brands Sustainability Performance Summary 2019

We are committed to transitioning smokers to alternative products with potentially lower health risks, to reduce the public health impact of smoking.

CONSUMER HEALTH

What we are doing

• Investing in leading edge science to develop next generation products (NGP) with potentially lower health risks

• Increasing the availability of NGP to adult smokers

• Ensuring our products are only marketed and sold to adult consumersREAD MORE

ABOUT OUR RESEARCH

We are committed to growing our business whilst reducing our climate-related impacts across our value chain.

CLIMATE & ENERGY

What we are doing

• We have developed a science-based target to reduce our absolute Scope 1 and 2 GHG emissions by 25% by 2030 from a 2017 base year

• We have developed a science-based target to reduce our absolute Scope 3 GHG emissions by 20% by 2030 from a 2017 base year

• We commit that 50% of our suppliers by spend covering purchased goods and services, will set science-based targets by 2023

• We have set a target to reduce absolute energy consumption across our operations by 25% by 2030 from a 2017 base year

INTRODUCTIONOur Sustainability Performance Summary details the work and progress we have made against our sustainability agenda and in particular our five priority sustainability issues: consumer health, climate and energy, farmer livelihoods and welfare , human rights and waste. Our sustainability strategy is aligned with the UN Sustainable Development Goals which aim to have a transformational impact on the world by 2030. In this document we also provide information on key sustainability performance indicators aligned to the Global Reporting Initiative (GRI) standards.

OUR SCIENTIFIC RESEARCH SHOWS

THAT E-VAPOUR IS SIGNIFICANTLY LESS TOXIC THAN

CONVENTIONAL CIGARETTES

REDUCTION OF SCOPE 1 AND 2 GHG EMISSIONS

BY 203025%

SEE OUR PROGRESS

3Imperial Brands Sustainability Performance Summary 2019

We seek to minimise the waste associated with our products, packaging and production process through a combined approach of reduce, reuse and recycle.

WASTE

What we are doing

• We have set a target to reduce the amount of waste we generate by 20%, by 2030 from a 2017 base year

• We have set a target to reduce the amount of waste to landfill by 50% by 2030 from a 2017 base year

• We have set a target to increase our recycling rate by 75% by 2030 from a 2017 base year

We will provide a safe and rewarding workplace for our employees and promote the respect of human rights across our business and supply chains.

HUMAN RIGHTS

What we are doing

• Reducing lost time accident frequency rate across our operations

• Measuring our safety performance by introducing leading indicators

• Raising awareness and improving our processes for identifying modern slavery in our business and supply chains through our partnership with the Slave Free Alliance

• Raising industry standards on the issue of child labour through our collaboration with the Eliminating Child Labour in Tobacco Growing (ECLT) Foundation.

FARMER LIVELIHOODS & WELFARE

OUR GOAL IS TO INCREASE

OUR RECYCLING RATE BY

BY 203075%

LOST TIME ACCIDENT

FREQUENCY RATE (PER 200,000

HOURS) DOWN IN 2019 BY

13%

CASE STUDY

SEE OUR PROGRESS

We focus our leaf partnership projects on: enhancing tobacco farmer productivity; supporting income through alternative crops; reducing labour requirements; and improving farming inputs. We seek to provide tobacco farming communities with a sustainable water supply, which often leads to lower labour requirements.

4Imperial Brands Sustainability Performance Summary 2019

PERFORMANCE SUMMARY OVERVIEW 16%

decrease in total waste compared to 2017 base year

Environment

5%decrease in total absolute Scope 1 and 2 C02e emissions compared to 2017 base year

10%decrease in water consumption compared to 2017 base year

13%decrease in lost time accident rate compared to 2018

Health & Safety

83%of our operations are certified to the internationally recognised health & safety management system, OHAS 18001

42%of our workforce are female

Diversity & Inclusion

40%of our PLC Board are female

40%of senior managers hired from local communities where the job was based

£2.136 million provided for community investment projects

Community

5Imperial Brands Sustainability Performance Summary 2019

Performance Indicator Unit 2017 2018 2019

Environmental Management SystemOperations with ISO 14001 certification at the end of the financial year % 92 91 86

WasteTotal Waste Tonnes 49141 43388 41089A

Relative Waste Tonnes per £million tobacco & NGP net revenue

6.34 5.61 5.14A

Waste to Landfill Tonnes 6746 6769 7072A

Relative Waste to Landfill Tonnes per £million tobacco & NGP net revenue

0.87 0.88 0.88A

Recycling Rate % per Tonnes 70 69 67

Climate and EnergyAbsolute Energy ConsumptionGRI Standard 302-1

GWh 873 842 815A

Relative Energy ConsumptionGRI Standard 302-3

KWh/£million tobacco & NGP net revenue

112544 108926 101913A

Absolute Scope 1 CO2e emissionsGRI Standard 305-1

Tonnes 18198 110899 108241A

ENVIRONMENTAL PERFORMANCEProgress against

2017 base yearExplanation of Performance

Progress made Improvement needed

(A) Select 2019 data has been independently assured by PricewaterhouseCoopers LLP (PwC) under the limited assurance requirements of the ISAE 3000 standard. The Assurance Opinion is available on our website. Data follows the reporting period Q4 FY18 – Q3 FY19, this is to allow for data collection, validation and external assurance. 2019 fleet fuel data is for the full FY19.

6Imperial Brands Sustainability Performance Summary 2019

Total Absolute Scope 1 and 2 CO2e emissions GRI Standard 305-5 Tonnes 271861 265636 258589A

Relative Scope 1 and 2 CO2e emissions GRI Standard 305-4

Tonnes per £million tobacco & NGP net revenue

37.9 34.4 32.3A

Emissions of ozone-depleting substance: R22GRI Standard 305-6

kg 233 270 100

WaterAbsolute water consumptionGRI Standard 303-5

m3 1468626 1329780 1315750A

Relative water consumption m3/£million tobacco & NGP net revenue

189 172 165A

ForestryNumber of trees planted to drive wood sustainability in Africa Number 1.7m 1.1m 950,000

ENVIRONMENTAL PERFORMANCEProgress against

2017 base yearExplanation of Performance

(A) Select 2019 data has been independently assured by PricewaterhouseCoopers LLP (PwC) under the limited assurance requirements of the ISAE 3000 standard. The Assurance Opinion is available on our website. Data follows the reporting period Q4 FY18 – Q3 FY19, this is to allow for data collection, validation and external assurance. 2019 fleet fuel data is for the full FY19.

Performance Indicator Unit 2017 2018 2019

Absolute Scope 2 CO2e emissionsGRI Standard 305-2 Tonnes 153663 154737 150348A

Progress made Improvement needed

7Imperial Brands Sustainability Performance Summary 2019

ENVIRONMENTAL PERFORMANCE 2019

Water consumption by withdrawal source (m3) GRI Standard 303-3

(A) 2019 data has been independently assured by PwC. Our Reporting Criteria Document contains detail on definition and scope of all non-financial KPIs; see www.imperial brandsplc.com/sustainability for more information

Disposal of hazardous waste (Tonnes) GRI Standard 306-2

Disposal of non-hazardous waste (Tonnes) GRI Standard 306-2

Mains - 78%Ground water - 22%Rain water - 0%

4% - Reused 31% - Recycled 20% - Incinerated & energy recovered17% - Incinerated 28% - Sent to landfill

15% - Reused46% - Recycled 12% - Incinerated & energy recovered 1% - Incinerated 15% - Sent to landfill 11% - Composted

Unit 2017 base year 2018 2019

Mains m3 1187229 1042724 1019894

Ground water m3 278565 285445 294218

Rain water m3 2832 1610 1638

Total m3 148626 1329779 1315750A

Water consumption by withdrawal source (m3)

17

18

19

0 20 40 60 80 100

0 20 40 60 80 100

0 20 40 60 80 100

Direct Energy Consumption by Source (%)

0 20 40 60 80 100%

17

18

19

In Direct Energy Consumption by Source (%)

0 20 40 60 80 100

0 20 40 60 80 100

0 20 40 60 80 100

17

18

19

17

18

19

In Direct Energy Consumption by Source (%)

0 20 40 60 80 100%

Direct Energy Consumption by Source GWh (%) GRI Standard 302-1

2017 Baseline

2018

2019

17

18

19

0 20 40 60 80 100

0 20 40 60 80 100

0 20 40 60 80 100

Direct Energy Consumption by Source (%)

0 20 40 60 80 100%

17

18

19

In Direct Energy Consumption by Source (%)

0 20 40 60 80 100

0 20 40 60 80 100

0 20 40 60 80 100

17

18

19

17

18

19

In Direct Energy Consumption by Source (%)

0 20 40 60 80 100%

Indirect Energy Consumption by Source GWh (%) GRI Standard 302-2

2017 Baseline

2018

2019

Natural gasDiesel oilHeavy fuel oil

LPGGasoline/ PetrolOther fuels

Natural gasDiesel oilHeavy fuel oil

LPGGasoline/ PetrolOther fuels

8Imperial Brands Sustainability Performance Summary 2019

Peformance Indicator Unit 2017 2018 2019

Health & SafetyOperations with OHAS 18001 certification at the end of the financial yearGRI Standard 403-8

% 87 87 83

Lost time accident frequency rate GRI Standard 403-9

Per 200,000 hours

0.36 0.46 0.40A

DiversityFemale employees

% 40 41 42

Female Operating Executive membersGRI Standard 405-1

% 11 13 11A

Female Board PLC membersGRI Standard 405-1

% 30 33 40A

Recruitment Development and RewardAverage number of hours of training and development provided per full-time employee (FTE) GRI Standard 404-1

Number of hours per FTE 2.28 1.2 1.85

Employee turnover rateGRI Standard 401-1

% 15.0 15.1 13.2

SOCIAL PERFORMANCE Progress against

previous yearExplanation of Performance

(A) 2019 data has been independently assured by PwC. Our Reporting and Criteria Document contains detail on definition and scope of all non-financial KPIs; see www.imperialbrandsplc.com/sustainability for more information.

Progress made Improvement needed

9Imperial Brands Sustainability Performance Summary 2019

Gender %

45% - Female51% - Male4% - Undisclosed Gender

49% - Under 30 34% - 30-504% - Over 5014% - Undisclosed Age

SOCIAL PERFORMANCE 2019

Group Total % Rate

Female 1196 13.3

Male 1607 13.1

Under 30 888 18.1

30-50 1212 9.6

Over 50 590 17.0

Employee Turnover Rate for 2019*GRI Standard 401-1

*Excludes Logista and US Operations. The gender and age group figures above exclude any individual who has chosen not to disclose their age and/or gender and so will not sum to the total figures

New Employee Hires for 2019*GRI Standard 401-1

Age %

10Imperial Brands Sustainability Performance Summary 2019

We have aligned our priority focus areas with five of the UN SDGs, however through

our business activities we are able to positively contribute to

additional SDGs, recognising the importance of all 17.

CELEBRATING THE POWER OF

DIVERSITY SOLAR BOREHOLES IN MALAWI

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DRIVING WOOD SUSTAINABILITY IN MADAGASCAR

PARTNERING WITH ECLT