Philip Morris International today published its first integrated report, a comprehensive overview of the company’s environmental, social and governance (ESG) performance and its progress toward delivering a smoke-free future—including the company’s ambition to switch more than 40 million adult smokers to its smoke-free products by 2025, with half of the total to come from non-OECD countries.
“Since we announced our smoke-free commitment in 2016, we have made enormous progress in terms of organizational capabilities, the integration of sustainability into every aspect of our transformation, and our business,” said Andre Calantzopoulos, CEO of PMI.
Among other things, the integrated report shows that PMI directed 98 percent of total R&D expenditure and 71 percent of total commercial expenditure toward smoke-free products in 2019.
PMI’s smoke-free product net revenues reached 18.7 percent of total net revenues in 2019 compared to 2.7 percent in 2016. In 2019, net revenues from smoke-free products exceeded 50 percent of total net revenues in four markets.
PMI’s smoke-free product shipment volume increased to approximately 60 billion units in 2019, up from 7.7 billion in 2016. The company’s combustible product shipment volume in 2019 declined to 732 billion units, down from 845 billion in 2016, partly reflecting the impact of adult smokers switching to PMI’s smoke-free products.
Since announcing its smoke-free vision in 2016, PMI has delisted more than 600 cigarette stock-keeping units (SKUs) globally while broadening its portfolio of heated-tobacco units to more than 400 SKUs.
At year-end 2019, there were an estimated 9.7 million users worldwide who have stopped smoking and switched to PMI’s heat-not-burn smoke-free product IQOS compared to 6.6 million in 2018, according to the report.
On the ESG front, the integrated report highlights PMI’s youth access-prevention programs, initiatives to mitigate environmental risks and impacts across its value chain and efforts to improve the wellbeing of is farming community.
“Our integrated report aims to provide a comprehensive overview of what PMI is about combined with a holistic set of metrics that go beyond our financial disclosures, covering our business transformation as well as environmental, social and governance topics,” said Huub Savelkouls, chief sustainability officer at PMI.