Philip Morris International says it is fundamentally transforming its business by putting smoke-free products at the core of its sustainability efforts to address societal challenges, drive operational excellence and reduce its environmental footprint.
The company yesterday published its third Sustainability Report (2017) in which it outlines the steps it is taking to bring about this transformation.
‘PMI’s commitment and ambition is to replace cigarettes as soon as possible with better alternatives to smoking for the millions of men and women who would otherwise continue to smoke,’ the company said in a note posted on its website.
PMI said it was providing a more comprehensive picture of its sustainability activities. ‘With the aim of achieving greater transparency and facilitating the assessment of its progress, PMI has included a fuller set of metrics and data trends,’ it said. ‘In addition, the company has provided more contextual information on its business and how sustainability is managed, taking into account feedback received on its 2016 report.’
Last year, PMI introduced a set of Business Transformation Metrics to track progress against its goal of a smoke-free future, and key 2017 milestones were said to have included:
- ‘PMI’s resource allocation continues to shift to smoke-free products, which accounted for 74 percent of global R&D expenditure and 39 percent of global commercial spend.
- ‘Smoke-free products [including heated tobacco products and electronic cigarettes] represented approximately 4.4 percent of PMI’s shipment volume and around 13 percent of net revenues, excluding excise taxes.
- ‘PMI estimates that, by the end of 2017, over 4.7 million adult smokers had stopped smoking cigarettes and made the change to IQOS (PMI’s main smoke-free product), while approximately 10,000 more consumers are switching every day.’
The report is said to provide also an overview of PMI’s wider sustainability efforts to create long-term value: from how it is addressing social and environmental impacts to managing the impact of transformation on PMI’s value chain and excelling in how it operates. Key progress in 2017 was said to have included:
- ‘More than one-third, 34.4 percent, of the management positions at PMI held by women, showing progress against the company’s goal of reaching 40 percent by 2022.
- ‘PMI’s rollout of Responsible Sourcing Principles to help identify and manage labor issues in its non-agricultural supply chain.
- ‘Environmental milestones include being recognized for the fourth consecutive year on CDP’s Climate A-List, and for the first time its water programs achieved the CDP Water A-list ranking.’
PMI said it remained focused on securing the integrity of its supply chain through its efforts to tackle the illegal trade in tobacco products, while pushing transparency further by publishing its approach to corporate tax and data privacy, and providing an overview of its Marketing Principles and Principles for Engagement with third parties.
‘The progress PMI has made is an indication of its sustainability ambitions,’ the note said. ‘PMI is on course with its business transformation, delivering on its CO₂ reduction targets, improving in the area of inclusion and diversity to meet key goals, and strengthening the governance of its sustainability management.
‘The report also highlights how, going forward, reducing the environmental footprint of the smoke-free products’ manufacturing process, promoting crop diversification among tobacco farmers and equipping PMI employees to successfully transform the company are essential.’