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Environmental & Social Due Diligence in Tobacco Industry

Corpbiz aims to develop and offer distinctive and cutting-edge environmental solutions for projects that have an impact on the environment across a range of industries. These solutions will be provided through impact assessment studies, pollution treatment facilities, analysis and monitoring of environmental media, and strict implementation of the plans within the allocated budget to help supporters on the one hand and achieve environmental protection on the other.

Our team provides practical business solutions to enterprises to fulfil their obligations. As a prominent ESDD consultant, we have established our presence by offering unique consultancy and solutions to businesses across India. We offer customized solutions through our vast team of experts in ESDD Registrations and Compliance with applicable laws, regulations, and guidelines. Through our market understanding and expertise in ESDD management systems, we offer personalized services to all our clients.

Need of Environmental & Social Due Diligence in Tobacco Industry

Environmental and social due diligence in the tobacco industry is crucial for several reasons. From an environmental perspective, it helps assess the industry's impact on ecosystems, deforestation, and water resources, promoting sustainable practices. Social due diligence is essential to address issues such as child labor, worker conditions, and community health, fostering responsible business conduct. The need of environmental & social due diligence in the tobacco industry are-

  • Mandatory social and environmental due diligence for companies is necessary for achieving the Sustainable Development Goals, to protect and fulfil human rights obligations and avoid environmental destruction.
  • Mandatory social and environmental due diligence must include transparent reports on standardized criteria, the obligation for development and implementation of an ambitious plan of action, permanent monitoring structures and sanctions.
  • Assessing the social impact is vital, particularly in terms of agricultural practices. The tobacco industry often involves small-scale farmers. Due diligence can ensure fair and ethical treatment of these farmers, preventing issues such as child labor and promoting sustainable farming methods.
  • Given the health risks associated with tobacco consumption, social due diligence is critical to address the industry's impact on public health. This includes evaluating marketing practices, adhering to regulations, and contributing to health awareness and education programs.
  • The tobacco industry can significantly affect local communities. Due diligence helps ensure that these communities are not adversely impacted, addressing issues like displacement, economic disparities, and promoting community development initiatives.

Challenges in Environmental & Social Due Diligence in Tobacco Industry

Tobacco not only harms the health of individuals, but it also harms the health of the environment. In addition to tobacco products, the tobacco industry is also accountable for hundreds of thousands of pounds of tobacco waste produced annually. The ecosystem is seriously threatened by tobacco waste, which calls for a long-term solution. Tobacco companies, in an attempt to garner positive press coverage, are offering pertinent solutions to the environmental issues their products cause rather than taking accountability for their products. Some of the challenges faced by businesses in com Environmental & Social Due Diligence in Tobacco Industry are-

Lack of Data

There is a lack of comprehensive data on and recognition of tobacco's true environmental cost among smokers, the general public, and even policymakers under Environmental & Social Due Diligence in Tobacco Industry. In the tobacco industry, conducting environmental and social due diligence can be challenging due to the lack of reliable data. This hampers efforts to assess the industry's impact on the environment and society effectively. Limited transparency from tobacco companies further complicates the process, making it difficult for stakeholders to make informed decisions about the industry's practices and their consequences.

Exploitation of Regulation

The differences in national regulations are being exploited by tobacco companies in order to avoid reporting or paying for any damages that are caused by their activities. The exploitation of regulations poses a significant challenge in conducting environmental and social due diligence in the tobacco industry. Some companies may exploit loopholes or lax enforcement of regulations, allowing them to continue harmful practices without adequate scrutiny. This exploitation makes it difficult for regulators and stakeholders to assess the true impact of the industry on the environment and society, leading to incomplete or misleading information during the due diligence process.

Dependency

There is an increased dependence on tobacco as a cash crop in a number of lower-income countries. Tobacco growing has many serious environmental consequences including loss of biodiversity, soil erosion and degradation, water pollution, and increases in atmospheric carbon dioxide.

Burden of Tobacco-Related Illness

Around 80% of the world's 1.3 billion tobacco users live in low- and middle-income countries, which bear the heaviest burden of tobacco-related illness and death. Tobacco use contributes to poverty by diverting household spending away from important things like food and shelter and toward tobacco.

Depletion of Soil Nutrients

Tobacco leads to the clearance of forests for cultivation, stripping fuel wood for curing, and forest resources for packaging, thus that would be damaging the environment. Tobacco highlights the depletion of soil nutrients at a very fast rate and displaces the indigenous flora and fauna, hence becoming a source of pests for other crops.

Public Health Policies

Under Environmental & Social Due Diligence in Tobacco Industry, it should be noted that the tobacco industry engages in socially responsible activities in order to distance itself from the fatal nature of the product that it sells or produces to interfere with the formulation and implementation of public health policies.

Life cycle Impact of Tobacco

Including secondhand and third-hand smoke exposure; and 5 post-consumption tobacco product waste disposal. Due diligence concerns stage 1 to 3. A list of potential risks should be developed in collaboration with stakeholders for each of these three stages, resulting in a transparent understanding of the environmental harm and the violations of human right caused by tobacco production and consumption. Clear guidelines and criteria are required.

Benefits of Environmental & Social Due Diligence in Tobacco Industry

Corpbiz believes that environmental and social sustainability are crucial while addressing the infrastructure gaps and sustainable development needs consistent with national laws and regulations and its mandate. Some of the benefits of Environmental & Social Due Diligence in Tobacco Industry -

  • Mandatory Environmental & Social Due Diligence in Tobacco Industry for companies is absolutely necessary to achieve Sustainable Development Goals, protect and fulfil social obligations, and avoid environmental destruction.
  • The tobacco industry has an ecological footprint that is comparable to that of entire countries. The child labour in the tobacco industry is one of the worst kind of social infractions. Tobacco industry's mandatory environmental and social due diligence should include transparent reports based on standardized criteria, the obligation to develop and implement an ambitious plan of action, permanent monitoring structures, enforcement, and sanctions.
  • Deeper knowledge of operating processes and the company's supply chain acquired through due diligence has a myriad of benefits, first and foremost, lower operational and strategic risks, which can pose significant threats. It can take companies years to recover from the impact of negative events on their reputation.
  • An enhanced reputation for commitment to Environmental & Social Due Diligence in Tobacco Industry has been shown to improve brand value and enhance customer loyalty, improving a company's competitive position, pricing power, and sales.
  • The tobacco industry's so-called contributions to the environment, such as promoting tree planting, drown out the true solutions to protect the environment and restore the ecosystem while publicizing its supposed sustainable practices.
  • Conducting due diligence promotes transparency by encouraging companies to disclose their environmental and social practices. This transparency encourages helping stakeholders make informed decisions about their involvement with the industry.
  • Addressing Environmental & Social Due Diligence in Tobacco Industry can lead to contribution to the long-term sustainability of the tobacco industry, ensuring its viability in the face of changing societal expectations and regulations.

Our Services For Environmental Due Diligence Process

We provide assistance in Environmental Due Diligence Services in Tobacco Industry. The ultimate goal of an Environmental Due Diligence Process is to comprehend the responsibilities associated with a site and oversee any related expenses and cleanup efforts. Agencies can use the Environmental Due Diligence Process to look at the proposed property in-depth and uncover additional environmental concerns, in addition to looking into the aspects of site contamination. This will serve as a source Document in the event of further contamination and queries regarding site responsibility, as well as aid in creating an initial environmental condition assessment of the property at the time of the transaction. Our Services include-

Transparency and Information Disclosure

Corpbiz is committed to working with the client to ensure that social and environmental assessment necessary papers are made available in a accurate manner, in an accessible place, and in a form and language that is understandable to affected people and to other stakeholders, including the general public, so they can provide meaningful inputs into project design and implementation.

Monitoring and Reporting

Corpbiz requires the client to conduct monitoring of the implemened environment and social mitigation measures. The extent of monitoring activities, including their scope and periodicity, is commensurate with the project's risks and impacts. Clients will provide periodic monitoring reports on environmental and social measures and relevant plans, as provided in the legal agreements and/or country systems. Corpbiz carries out its own due diligence of monitoring through progress/monitoring report review, field visit, and post-evaluation and provides support to strengthen the client's systems. Corpbiz, in collaboration with the client, monitors projects on an ongoing basis until completion and, if necessary, beyond project completion as required.

Reasons to Choose Corpbiz

  • Solid Network of 40,000+ Lawyers/Attorneys/Environmental Experts
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  • Partner Base of 40,000+ Auditing and Law Firms Globally
  • Worked with over 30,000+ Entrepreneurs across the Globe
  • AI-powered Service Delivery Platform ensuring Timely Support
  • Dedicated Foreign Investment Desk with 200+ Client Representatives
  • Maintained Consistency with 99.7% Client Recommendations
  • 100+ Queries for Company Incorporation Globally

Overview of Environmental & Social Due Diligence in Tobacco Industry

Tobacco use is one of the serious public health challenges in many regions of the world. It has been noticed the dimension of an epidemic resulting in enormous disability, disease, and death. There is an estimation that five million deaths that are preventable happen every year globally, attributable to tobacco use.

India has been very conscious of the harmful effects of tobacco use, disease burden, and related social and economic costs of health care. Over the period, various administrative measures were taken for the prohibition of tobacco smoking in public places and to regulate the sale of tobacco products and their advertisements. A serious need was felt for framing a comprehensive national legislation on tobacco control, which would ensure uniform and effective enforcement of measures to achieve desired results. The Government of India passed legislation after extensive deliberation. The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003 was passed in May 2003 with the goal of protecting public health by prohibiting smoking in public places, prohibiting tobacco product advertisements, prohibiting tobacco product sales to minors and near educational institutions, mentioning strong health warnings, which would be including pictorial depiction on tobacco products, and regulating tobacco product distribution.

For any legislation to be successful, there is a need for adequate preparedness on the part of civil society, locally and globally, with regard to awareness of the existing problem and acceptance of the necessity for such legal measures. At the global level, India has been a forerunner in the negotiations leading to the Framework Convention on Tobacco Control, which was ratified by India in February 2004. At the domestic level, the State Governments, which are the main implementing agencies, have been advised to enforce the provisions of the tobacco control legislation strictly.

Environmental and social due diligence in the tobacco industry refers to the process of systematically evaluating and assessing the environmental and social impacts of tobacco-related activities and operations. This evaluation is conducted by companies, investors, regulatory authorities, or other stakeholders to ensure compliance with regulations, ethical standards, and sustainable practices.

Environmental Due Diligence involves evaluating the environmental aspects of tobacco production, including issues related to deforestation, water usage, pesticide and chemical usage, waste management, and pollution. It assesses the industry's impact on natural resources, biodiversity, and ecosystems. Social Due Diligence focuses on assessing the social and human rights aspects of tobacco production. This includes examining labour practices, occupational health and safety, child labour, working conditions, community engagement, and the overall social impact on communities where tobacco is cultivated and processed.

Need for Environmental & Social Due Diligence in Tobacco Industry Initiative

Due diligence must include Corporate Social Responsibility (CSR) since businesses must make sure that their suppliers are adhering to all CSR obligations. Like many other multinational corporations in an increasingly globalized world, tobacco companies have created voluntary corporate social responsibility (CSR) programs in response to public expectations arising from these initiatives. The tobacco industry's commitment to corporate social responsibility is inherently contradictory, as the industry's fundamental operations run counter to the objectives of public health policies concerning tobacco control.

In addition to using voluntary corporate social responsibility programs to boost their public image, tobacco companies also use these programs to disrupt the implementation of legally binding tobacco control laws that have a track record of successfully lowering tobacco use.

The demand for tobacco products will be decreased by implementing widespread but efficient action against the environmental risks brought about by the tobacco industry. Stronger environmental regulations will result in higher tobacco product prices, a decline in the social acceptance of tobacco use, and modifications to the most widely used tobacco products.

The tobacco industry is, therefore, a good example to emphasize that voluntary CSR schemes do not advance Environmental & Social protection but serve as a tool for continuing to make profits without conscience. Thus, a compulsory due diligence framework is required to achieve the SDGs and to protect and fulfil human rights.

Purpose of Environmental & Social Due Diligence in Tobacco Industry

Some of the Purposes of Environmental & Social Due Diligence in Tobacco Industry are-

For identification, evaluation, and management of the environmental and social risks that have an impact on the project.

To adopt a mitigation hierarchy approach to the project's E&S risks, i.e.

  • Anticipate and avoid risks and impacts
  • Minimize or reduce risks and impacts to acceptable levels, if not avoidable
  • Once risks and impacts have been minimized or reduced, mitigate; and
  • Where significant residual impacts remain, compensate for or offset them, where technically and financially feasible.

To help identify differentiated impacts on the disadvantaged or vulnerable and to identify differentiated measures to mitigate such impacts, wherever applicable.

To assess the relevance and applicability of environmental and social institutions, systems, laws, regulations, and procedures in the assessment, development, and implementation of projects, whenever appropriate; identify gaps, if any exist, and

To assess borrower's existing capacity and gaps therein and identify areas for enhanced capacity towards management of E&S risks.

Approach and Methodology of Environmental & Social Due Diligence in Tobacco Industry

  • Study project information, proposed interventions, their magnitude, and locations, and carry an assessment of each proposed intervention to identify the magnitude of E&S risk and impacts.
  • Review the relevance and applicability of national and state legal requirements.
  • Conduct site visit to understand baseline environment and social settings, proposed activities under the sub-project, their location, and sensitivity
  • Present key baseline data essential for impact assessment in the immediate vicinity area of proposed interventions from secondary sources, such as land use, protected areas in the vicinity, ascertain the presence of indigenous (scheduled tribe)/vulnerable people, etc.
  • Undertake an institutional assessment to identify existing capacities & relevant gaps to manage E&S risks and impacts.
  • Conduct preliminary stakeholder consultations to help identify potential stakeholders, provide information on the proposed interventions, identify issues and concerns, and ascertain appropriate mechanisms for continued engagement.
  • Carry out activity-wise environment and social screening and identify risks and impacts. Classify the sub-project based on risk level (low, moderate or substantial and high) and recommend commensurate plans/measures to meet identified risks and impacts.

Environmental & Social Due Diligence in Tobacco Industry in Relation to Business

The tobacco industry ignores its responsibility when it comes to the environmental costs on ecosystems, humans, flora, and fauna of their business. These companies have promoted policies that avoid all environmental responsibility of the producer, and they attempt to divert public attention away from their environmental responsibilities through corporate social responsibility programs.

Companies should avoid causing or contributing to negative human rights impacts. When such impacts occur, businesses must immediately stop the actions that cause or contribute to the impacts. Tobacco is extremely harmful to human health, and there is no doubt that tobacco production and marketing are incompatible with the human right to health.

Importance of Due Diligence

  • Improves a company's knowledge of its operations and supply chain
  • Reduces a company's operational and strategic risks
  • Improves transparency (internally and externally)
  • Enhances governance
  • Improves relationships with its stakeholders such as employees, business partners, communities, host governments

Why Choose Corpbiz for ESDD in Tobacco Industry?

Corpbiz offers services like business registration, government registration, regulatory measures, tax filing, IPR, and much more, with a primary focus on supporting small and medium-sized businesses (SMEs). Professional services are offered in India by Corpbiz, a technology-driven platform. We work hard to give our clients the greatest service possible:

  • Every call or letter is answered by us within a few minutes.
  • We have excellent automation and customer empowerment in place, so all it takes is a click to get in touch with us.
  • Give up worrying about registering your business because we are offering a range of corporate services.
  • Our knowledgeable staff will tell you about the project and, following thorough investigation and inspection, recommend the premium approach.
  • We can easily provide worldwide certification and approval thanks to our wide network in many different nations.
  • In assessing their project impacts on the environment through EIA, recommending innovative solutions to reduce or eradicate impacts and thereby getting environmental clearances from respective authorities.
  • In preparing an environmental management plan for their project.
  • In pre & post analysis and monitoring of various environmental media's while getting clearance and implementing the project
  • To identify and enhance the quality of services beyond the expectations of our valued customers.
  • Reviewing and evaluating the findings.
  • Developing a confirmation Sampling and Analysis Plan (SAP).
  • Performing sample collection and analysis.

Frequently Asked Questions

Environmental & Social Due Diligence in Tobacco Industry refers to the process of assessing and managing the environmental and social risks with an impact associated with the tobacco industry's operations in India.

Environmental & Social Due Diligence in Tobacco Industry is crucial to identify and mitigate potential negative effects on the environment and society, ensuring responsible business practices and sustainability.

The tobacco industry can contribute to deforestation, soil degradation, and water pollution due to the cultivation of tobacco plants and manufacturing processes.

The industry can adopt sustainable farming practices, promote reforestation, and implement eco-friendly manufacturing processes to minimize environmental impact.

Implementing public awareness campaigns, supporting tobacco farmers with alternative livelihood options, and investing in healthcare and addiction prevention programs are some measures to address social impacts.

Yes, the Indian government has regulations and policies in place to promote sustainable practices and reduce the negative impacts of the tobacco industry.

Investors can scrutinize companies' sustainability reports, engage in dialogues with company management, and support initiatives promoting responsible business practices.

Under Environmental & Social Due Diligence in Tobacco Industry, consumers can choose products from companies with strong environmental and social responsibility records, supporting businesses prioritizing sustainability and ethical practices.

Yes, certifications like Fair Trade and sustainable agriculture certifications can indicate environmentally and socially responsible practices in the tobacco industry.

Environmental concerns in the tobacco industry include deforestation, water pollution, pesticide use, and soil degradation due to tobacco cultivation. Additionally, energy consumption during manufacturing processes is also a concern.

Social issues in the tobacco industry encompass health problems caused by smoking, child labour in tobacco farming, economic challenges faced by tobacco farmers, and broader public health implications.

Under Environmental & Social Due Diligence in Tobacco Industry, the Governments can enforce regulations, impose taxes, and promote awareness campaigns to discourage smoking. They can also support farmers in transitioning to alternative crops and fund healthcare initiatives related to tobacco use.

Yes, investors can engage with tobacco companies, encourage transparency, and advocate for sustainable practices. They can divest from companies with poor social and environmental records and invest in socially responsible funds.

An effective management tool for determining the social and environmental components of any business that are crucial to decision-making is called Environment and Social Due Diligence (ESDD).

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