Philip Morris International Inc. (PMI) (NYSE:PM) today published its
fourth Sustainability
Report, detailing its progress in key areas across its value chain.
PMI’s mission to unsmoke the world is core to its sustainability
ambition and business strategy.
André Calantzopoulos, PMI’s Chief Executive Officer, said: “We’re often
asked, ‘Can a tobacco company be sustainable?’ Our answer to that is,
‘Absolutely.’ That is, provided we are taking every step possible to
completely replace cigarettes with better alternatives for the adult
smokers who would otherwise continue smoking, addressing challenges
across our value chain and seizing opportunities to add value to
society. Our most recent Sustainability Report reflects the hard work
and dedication of all our employees globally in moving toward our goal
of a smoke-free future. It demonstrates that we are on track to achieve
this bold ambition and are well positioned to address the challenges
ahead.”
The 2018 Sustainability Report outlines how PMI is accelerating efforts
to accomplish its mission to unsmoke the world, including its progress
against a set of key business transformation metrics. The company’s
strategy supplements the efforts by the World Health Organization (WHO)
to reduce smoking prevalence, and is aiming to reduce smoking among PMI
consumers more than three times faster than the target set by the WHO.
The company’s aspiration is that at least 40 million people who would
otherwise have smoked cigarettes will have switched to PMI’s smoke-free
products by 2025, reducing the number of PMI cigarette smokers by 55
million.
The report documents how PMI is continuing to focus considerable
resources to prevent child labor and improve labor conditions throughout
its value chain; scaling up its efforts toward improving inclusion and
diversity; and reducing its environmental footprint through greener
energy, water and litter management and the preservation of
biodiversity, land and forests.
The following were among PMI’s key milestones in 2018 on the road to a
sustainable, smoke-free future:
-
Only four years after it was launched, PMI estimates that 6.6 million
adult smokers have stopped smoking and switched to the company’s
heated tobacco product IQOS.
-
Smoke-free products represented 5.1 percent of shipment volume, but
already 13.8 percent of net revenues. IQOS was available in 44
markets by the end of 2018. In 19 of these markets, net revenues from
smoke-free products for PMI exceeded 10 percent of total net revenues,
and in three markets, smoke-free products already became the biggest
part of PMI’s business, exceeding 50 percent of total net revenues.
-
PMI continued to shift its resources toward smoke-free products: 92
percent of its research and development investment and 60 percent of
its global commercial expenditure were dedicated to smoke-free
products, while seven manufacturing facilities were producing them,
up from three factories in 2017.
-
Playing its part in the circular economy, PMI established a
centralized initiative to recycle used IQOS devices; CIRCLE
(Central Inspection and Recycling for Closed Loop Economy) brings
returned device recycling to the highest industry standards.
-
PMI initiated a step change improvement of its Agricultural Labor
Practices program, with the ambition to have no child labor within its
tobacco supply chain by 2025. Its program is already considered
industry-leading, and the monitoring data, covering 88 percent of
contracted farms, show that 98 percent of the over 300,000 farms
visited by field technicians were free of child labor in 2018.
-
PMI reinforced its human rights due diligence work by conducting a
pilot human rights impact assessment at its factory in Mexico.
-
PMI scaled up its efforts in managing social and labor practices in
its electronics supply chain.
-
Worldwide representation of women in PMI management roles increased to
35.2 percent, on track to reach its target goal of 40 percent by 2022.
-
PMI’s factory in Brazil received the Alliance for Water Stewardship
certification in 2018—the first of any industry in Latin America—and
the aim is that by 2025, all PMI’s factories will be certified to the
AWS standard.
-
For the fifth year in a row, PMI achieved CDP’s Climate A-list for its
comprehensive action to reduce greenhouse gas emissions and mitigate
climate change and for transparency in its reporting practices.
The four pillars of PMI’s sustainability strategy are: Transforming Its
Business, Driving Operational Excellence, Managing Its Social Impact and
Reducing Its Environmental Footprint. In each of these pillars, PMI
reassessed its most relevant challenges, with insights provided by a
broad group of external and internal stakeholders, to prioritize areas
where its work can have the greatest impact, thereby contributing toward
the United Nations Sustainable Development Goals. The 2018
Sustainability Report was developed in accordance with the Global
Reporting Initiative (GRI) reporting standards and is aligned with the
Sustainability Accounting Standards Board (SASB) standards and provides
extensive data, inviting readers to assess PMI’s performance across a
wide set of metrics.
“It was important to have an updated outside view, considering that our
business transformation is advancing rapidly and will lead to new
challenges and opportunities,” said Huub Savelkouls, PMI’s Chief
Sustainability Officer. “The sustainability materiality analysis we
carried out last year highlighted that the mission of our company—to
unsmoke the world by replacing cigarettes with better smoke-free
alternatives for those adult smokers who would otherwise continue
smoking—is fundamental for PMI’s ambition to become a sustainability
leader.”
Download the full 2018 Sustainability Report here: www.pmi.com/sustainability/sustainability-report.
About Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is leading a transformation in the
tobacco industry to create a smoke-free future and ultimately replace
cigarettes with smoke-free products to the benefit of adults who would
otherwise continue to smoke, society, the company and its shareholders.
PMI is a leading international tobacco company engaged in the
manufacture and sale of cigarettes, smoke-free products and associated
electronic devices and accessories, and other nicotine-containing
products in markets outside the U.S. PMI is building a future on a new
category of smoke-free products that, while not risk-free, are a much
better choice than continuing to smoke. Through multidisciplinary
capabilities in product development, state-of-the-art facilities and
scientific substantiation, PMI aims to ensure that its smoke-free
products meet adult consumer preferences and rigorous regulatory
requirements. PMI's smoke-free IQOS product portfolio includes
heat-not-burn and nicotine-containing vapor products. As of March 31,
2019, PMI estimates that approximately 7.3 million adult smokers around
the world have already stopped smoking and switched to PMI’s
heat-not-burn product, which is currently available for sale in 47
markets in key cities or nationwide under the IQOS brand. For
more information, please visit www.pmi.com
and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This press release and the Sustainability Report contain projections of
future results and other forward-looking statements. Achievement of
future results is subject to risks, uncertainties and inaccurate
assumptions. In the event that risks or uncertainties materialize, or
underlying assumptions prove inaccurate, actual results could vary
materially from those contained in such forward-looking statements.
Pursuant to the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995, PMI is identifying important factors
that, individually or in the aggregate, could cause actual results and
outcomes to differ materially from those contained in any
forward-looking statements made by PMI.
PMI's business risks include: excise tax increases and discriminatory
tax structures; increasing marketing and regulatory restrictions that
could reduce our competitiveness, eliminate our ability to communicate
with adult consumers, or ban certain of our products; health concerns
relating to the use of tobacco products and exposure to environmental
tobacco smoke; litigation related to tobacco use; intense competition;
the effects of global and individual country economic, regulatory and
political developments, natural disasters and conflicts; changes in
adult smoker behavior; lost revenues as a result of counterfeiting,
contraband and cross-border purchases; governmental investigations;
unfavorable currency exchange rates and currency devaluations, and
limitations on the ability to repatriate funds; adverse changes in
applicable corporate tax laws; adverse changes in the cost and quality
of tobacco and other agricultural products and raw materials; and the
integrity of its information systems and effectiveness of its data
privacy policies. PMI's future profitability may also be adversely
affected should it be unsuccessful in its attempts to produce and
commercialize reduced-risk products or if regulation or taxation do not
differentiate between such products and cigarettes; if it is unable to
successfully introduce new products, promote brand equity, enter new
markets or improve its margins through increased prices and productivity
gains; if it is unable to expand its brand portfolio internally or
through acquisitions and the development of strategic business
relationships; or if it is unable to attract and retain the best global
talent. Future results are also subject to the lower predictability of
our reduced-risk product category’s performance.
PMI is further subject to other risks detailed from time to time in its
publicly filed documents, including the Form 10-Q for the quarter ended
March 31, 2019. PMI cautions that the foregoing list of important
factors is not a complete discussion of all potential risks and
uncertainties. PMI does not undertake to update any forward-looking
statement that it may make from time to time, except in the normal
course of its public disclosure obligations.
# # #
View source version on businesswire.com: https://www.businesswire.com/news/home/20190515005340/en/
Copyright Business Wire 2019