By Amit Kumar Satanker | Akanksha Singh
Few industries embody the contradictions of corporate sustainability as starkly as the cigarette industry. Big Tobacco trumpets its environmental, social, and governance (ESG) achievements while selling a product that is neither environmentally nor socially responsible. Yet these qualify to be certified under various benchmarks and standards of ESG protocols. In 2017, the UN Global Compact excluded tobacco companies, citing conflicts with public health and SDG 3. It was hoped that ESG and other reporting standards would demand more data and draw greater commitment from toxic companies. A general protocol applicable to all companies makes it difficult to thresh out genuine achievement from greenwashing.
Globally, cigarette companies stand out for championing ESG, but the environmental burden to manufacture of their product, and consumers and those exposed to their product are all in harm’s way. Philip Morris claims a “smoke-free future” with reduced-risk products and continues its sustainability stunts by promoting its products and technology in a country like India, that already banned e-cigarettes and the likes. British American TobaccoAT promotes carbon neutrality and afforestation and claims to contribute towards a ‘Smokeless World’. Japan Tobacco highlights sustainable farming and water conservation. India’s three leading cigarette companies —led by ITC Ltd., Godfrey Phillips India Ltd. (GPIL), and VST Industries—claim progress in emissions reductions, plastic neutrality, and responsible sourcing. Yet, a closer examination reveals a disturbing pattern of greenwashing.
ESG Claims Fall Short on Transparency
By itself, tobacco cultivation, processing, and distribution leave a heavy ecological footprint. Deforestation for firewood-based curing, soil degradation from chemical use, and excessive water consumption are endemic.
We surveyed and analysed the environmental claims of India’s three largest tobacco companies using five years of publicly shared ESG reports. Not surprisingly, we found several shortcomings gaps in their reportsdisclosures, which border on greenwashing. Here is the gist of what we found.
Corporate sustainability disclosures are riddled with omissions. None of the major cigarette firms in India provide comprehensive life cycle assessments (LCA), crucial for measuring their true impact. Their reporting focuses on factory emissions (Scope 1 and 2) but conveniently excludes supply chain and post-consumer waste (Scope 3), which constitute the largest share of their footprint. While ITC claims over 50% renewable energy usage, these figures lump in its broader fast-moving consumer goods (FMCG) operations, obfuscating the actual footprint of its cigarette division. GPIL, which manufactures Marlboro in India under license, has pledged carbon reductions but provides no independent verification of its claims.
A glaring omission is the environmental impact of cigarette butts—the most littered plastic waste globally. This is despite directions and guidelines by the Central Pollution Control Board (CPCB) on what is expected on cigarette companies. The cigarette companies are yet to fully comply to this policy. While ITC Ltd. and GPIL promote plastic neutrality, yet there is no industry-wide effort to address the staggering pollution caused by discarded filters.
A Call for Stronger ESG Mandates
The limitation is also in the protocol and design of ESG framework which is mandated by regulators. The absence of stringent ESG mandates for the tobacco industry allows these gaps to persist. India’s regulatory framework does not require full Scope 3 emissions disclosure, nor does it enforce Extended Producer Responsibility (EPR) for cigarette waste. Unlike the European Union, which is moving towards a polluter-pays model for tobacco firms, India lags behind in imposing sustainability accountability on the sector.
So what must change? First, there is a need for full ESG transparency. Companies must disclose complete LCAs, including emissions across the supply chain, water use, and biodiversity loss. Independent audits should be mandatory and disclosed to the public. Second, cCigarette producers should fund waste collection programmes and implement biodegradable filter alternatives. Third, sin products, like cigarette, must have a separate Carbon Accounting Standard applicable on them. A sector-specific carbon tax or offset requirement should be introduced to reflect tobacco’s environmental cost. Fourth, just as cigarette packs carry health warnings, environmental warnings should highlight tobacco’s ecological damage.
India’s cigarette industry has long operated in the shadows of ESG scrutiny, crafting sustainability narratives that mask the true cost of tobacco. Regulators, investors, and consumers must demand incremental gains from all cigarette manufacturers. Until ESG claims align with genuine accountability, the industry will continue to trade in smokescreens, not sustainability.
Amit Kumar Satanker and Akanksha Singh are fellows at the Programme for Sustainability Management, Indian Institute of Forest Management (Bhopal).
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