19 key indicators will monitor the company’s progress in implementing environmental, social, and management sustainable practices regarding the impact of the company’s products and operations.
The introduction of 11 targets by 2025 and 19 indicators that track Philip Morris International’s progress in sustainable development envisages a renewed business strategy, reflected in the third annual Integrated Report, published this week.
The report notes the accelerated progress in the company’s transformation and the achievement of the vision for a smoke-free future and sets even more ambitious goals. One of them is related to investments and development of products for improving the quality of life and in the field of healthcare, by creating easier-to-take medicines. This became clear during the official presentation of the Integrated Report of the international company to the media.
The company updates its assessment of the importance of topics related to sustainable development and introduces the Sustainable Development Index. The document sets a strategic framework, specifies the indicators for business transformation, presents a roadmap to 2025, and sets shortened deadlines for achieving the company’s business goals.
“Sustainable development and good business results are interconnected and mutually supportive. Philip Morris International is committed to working as an agent of change and having a positive impact on society. Our business must offer effective alternatives to adult smokers compared to continuing to smoke. To achieve this, we focus on consumers, technology, science, and innovation. We are expanding our activities in areas beyond nicotine and tobacco, such as healthcare and improving the quality of life, with a view to long-term development, “said Jacek Olczak, CEO of the company.
Data, science, and facts speak louder than words, and our actions are based on them, says Philip Morris International, pointing out that 15.3 million people worldwide have already stopped smoking with smokeless products. The company reports a total of 21.7 million adult users of its innovative nicotine products without combustion, sales of which already account for nearly 30% of its net revenue. The integrated report also provides information on good practices in countries that are skillfully moving towards smoking cessation – such as Japan, where smokeless products are significant, and the United Kingdom, where reducing the harm of smoking through smokeless alternatives in public policy.
In direct contact from New York, especially for the media, details of the Integrated Report were given by Sarah Bostwick, Global Head of the Sustainability Stakeholder Engagement Department at Philip Morris International.
“Philip Morris International’s transformation is not just about replacing one product with another, it is about transforming the company’s entire value chain. This requires us to reformulate our business model, which brings new challenges, but at the same time offers new opportunities. In 2022, we added to the company’s goals the expansion of our activities to products to improve the quality of life and those in the field of healthcare, which would have a positive effect on society. The truth is that we can achieve our goal of a smoke-free future only if we are together – with consumers, regulators, and the public, “said Sarah Bostwick at the presentation of the report to the media.
The company’s roadmap for sustainable development includes 11 goals that Philip Morris International is committed to achieving by 2025, including targeted cessation of cigarette sales, use of the full potential of smokeless products, development of wellness and healthcare, building an inclusive work environment, improving the quality of life of employees in the supply chain, tackling climate change and protecting nature.
“Another direction in the strategy for sustainable development is the reduction of waste from our smokeless products. This refers to the recycling of waste from smokeless products – heated tobacco products and electronic cigarettes, as well as the devices themselves – old and obsolete, which the company has launched on the market. Another part of our efforts to reduce the footprint of our activities on the environment is to replace the cars of employees who are entitled to company cars with hybrid ones. We also have local initiatives – for example, the growing information campaign “#Change the Picture”, aimed at changing the habits of adult smokers, urging them to throw away their cigarette butts in designated areas for general waste; as well as “Fun Summer, Caring Autumn” – a program to improve the socio-economic situation of communities in tobacco-producing regions in the country, “added Dilyana Yakova, Manager of Regulation and Sustainable Development at Philip Morris.
The new assessment of sustainable development identifies the priority problems in the environmental, social, and managerial aspects of sustainable development, for the solution to which resources will be allocated. The revised strategic framework distinguishes two separate areas of influence of Philip Morris International: impact from products and impact from the company’s operations. The most important results are the following:
Impact of products
A total of 21.7 million are adult users of the company’s smokeless products as of December 31, 2021, 15.3 million of whom have stopped smoking. For comparison, the figures from 2020 are respectively the following – 18.3 million and 13.0 million.
, 1% of adjusted net revenues come from smokeless products, which are available in 71 markets worldwide by the end of the year. Based on 23.8% and 64 markets in 2020
99% of adjusted R&D expenditure is for smokeless products, for a total of $ 566 million, the ratio remains the same, but there is an increase of 14% in dollar terms compared to $ 495 million in 2020.
86% of IQOS devices returned to the company’s centralized recycling facilities are recycled, a weighted average for each recycled device, compared to 84% in 2020.
Impact of business operations.
% of the managerial positions in the company are held by women, in line with the commitment to achieve this goal in 2022.
Since 2018, 5 human rights impact assessments have been carried out in high-risk countries and action plans have been implemented; by comparison, these estimates were four in 2020.
67% of farmers with tobacco supply contracts with FMI receive decent wages, and in 2020 the percentage was 48%.
The reduced total value of carbon emissions throughout the supply chain by 18% and emissions from the company’s direct operations were reduced by 33% compared to the base values from 2019.
100% of the purchased tobacco does not lead to a risk of deforestation of virgin and protected forests.
Philip Morris International will evaluate its progress on 19 specific key performance indicators. The full set of them is the new Sustainability Index of the company, which links the results in the field of sustainable development of the company with 30% of the remuneration of senior management.
