Analysis of Major Environmental Impacts and Strategies within the U.S. Cigarette Manufacturing Industry

Abstract

The current period of increasing regulation and change in the United States cigarette industry offers new opportunities for those organizations to further develop their environmental sustainability programs. New FDA oversight and continuous decline in smoking rates is transforming the market place for cigarette manufacturers. The largest US cigarette manufacturers, Reynolds American, Altria, and Lorillard, make up over 90 percent of the market. These companies need to develop strategies to deal with ongoing changes. Cigarette makers have been under pressure to maintain their shareholder value in a declining market. The decline is not sustainable without reducing operating costs consistent with the decline. This provides an opportunity for environmental sustainability activities to bring value to the corporation while achieving environmental goals. This masters project offers a look into the environmental impact, strategies, and tactics used by the US cigarette manufacturing industry. Through the use of publically available information - for example, corporate reports, carbon disclosure data, and EPA reporting information - a comprehensive review of the industry is made. The objective in studying the US cigarette industry was to determine differences, identify effective practices, and then provide some insights into what improvements could be made to the industry’s environmental strategies and practices. An environmental strategy that minimizes environmental impacts and increases transparency will not only benefit the companies, but also the environment. Through market decline and facility consolidation, embracing environmental sustainability concepts such as renewable energy or sustainable packaging can provide value back to the cigarette manufacturers while continuing protection of the environment.