—Philip Morris International Inc. (“PMI”) (NYSE: PM) today published its third Sustainability Report (2017), outlining the concrete steps being taken to fundamentally transform its business by putting smoke-free products at the core of PMI’s sustainability efforts to address wider societal challenges, drive operational excellence, manage its social impact and reduce its environmental footprint. 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.
In its report, PMI provides 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. 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. Key 2017 milestones 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 products1 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 IQOS2 (PMI’s main smoke-free product), while approximately 10,000 more consumers are switching every day.
The report also provides 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 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.
1 Includes heated tobacco products and e-cigarettes. 2 Status at the end of December 2017, reflecting new PMI methodology. For markets where IQOS is the only heated tobacco product, daily individual consumption of PMI heated tobacco units represents the totality of their daily tobacco consumption. For markets where IQOS is one among other heated tobacco products, daily individual consumption of heated tobacco units represents the totality of their daily tobacco consumption, of which at least 70 percent are PMI heated tobacco units.