Report communicates PMI’s progress toward
becoming a majority smoke-free company as the company continues to
transform for good.
Philip Morris International Inc. (PMI) (NYSE: PM) released its
fourth annual Integrated Report today. Informed by a formal
sustainability materiality assessment, the report aims to provide
an objective description of the company’s business model,
governance and management, strategy, and performance.
“Despite its many tests, 2022 was a remarkable year that brought
our employees closer and saw us make measurable strides toward
achieving our purpose,” said Jacek Olczak, Chief Executive Officer
of PMI. “We are progressing toward our 2025 aspiration of becoming
a majority smoke-free company and ultimately phase out cigarettes.
While a transformation of this magnitude and complexity cannot be
achieved overnight, we are committed to making it happen as fast as
possible. It is through constructive engagement that we will
accelerate the pace of meaningful and impactful change and complete
our transformation for good.”
PMI’s latest Integrated Report communicates the progress the
company is making towards achieving its purpose—the company’s
statement of purpose articulates PMI’s aim to deliver a smoke-free
future by focusing its resources on developing, scientifically
substantiating, and responsibly commercializing smoke-free products
that are less harmful than smoking, with the aim of completely
replacing cigarettes as soon as possible and to evolve in the
longer term into a broader lifestyle, consumer wellness, and
healthcare company.
Building on its ESG framework, PMI developed eight strategies
targeting the company’s most pressing areas of impact. To accompany
these eight strategies, PMI established 11 goals, which form the
basis of its 2025 Roadmap, and 19 key performance indicators (KPIs)
to measure progress via its Sustainability Index. Each KPI is also
aligned with one of two drivers: product sustainability (11 KPIs)
or operational sustainability (8 KPIs).
“Non-financial information is increasingly being used by
external stakeholders to assess and compare a company’s performance
to others, including the financial community in their analyses and
investment decisions. It is key to the integrity of PMI’s reporting
that the information and data that we publicly disclose accurately
reflect our company’s progress, following clear calculation
methods,” explained Emmanuel Babeau, Chief Financial Officer of
PMI.
Last year, PMI also published its first ESG KPI Protocol, which
includes the definition, methodology, and scope of each of the
Sustainability Index’s KPIs to provide measurable, verifiable,
consistent, and accurate reporting on progress. In conjunction with
its latest Integrated Report, the company is also publishing an
updated Protocol that notably accounts for efforts undertaken
during 2022 to make these KPIs even more robust.
Progress against PMI’s sustainability aspirations continued
mostly apace in 2022 as it sought to tackle the impacts of both its
products (what it produces) and its operations (how it
produces).
On the social side of its product impact, the company continued
to transform and deliver on its purpose; further, it continued
implementation of youth access prevention programs in its direct
and indirect retail channels. Mindful of the importance of reducing
post-consumer waste, it made progress in implementing take-back
programs for its smoke-free devices and consumables and increased
its electronic device repair capabilities.
Product impact
Social
- 24.9 million: Estimated total adult users of PMI’s smoke-free
products (2021: 21.7 m)1
- 32.1%: Of net revenues derived from smoke-free products (2021:
29.5%)2
- 73: Markets where PMI smoke-free products are available for
sale, of which 42% are in low- and middle-income countries (2021:
71, 42%)3
- USD 10.7 billion: Cumulative investment behind smoke-free
products since 2008 (2021: USD 9.2 billion)4
- 91%: Of total shipment volume covered by youth access
prevention programs in indirect retail channels (2021: 91%)5
- USD 0.3 billion: Annual net revenue from wellness and
healthcare products (2021: USD 0.1 billion)
Environmental
- 86%: Recycling rate of IQOS devices returned to centralized
recycling hubs (weighted-average percentage of each device that is
recycled) (2021: 86%)6
- 68%: Of shipment volume covered by markets with anti-littering
programs in place for combustible cigarettes
- 8.5%: Of shipment volume covered by markets with smoke-free
consumables take-back programs7
On the social side of PMI’s operations, the company expanded
access to structured lifelong learning offers among PMI employees,
published a strengthened commitment to human rights, and completed
its sixth and seventh human rights impact assessments, in Brazil
and Malaysia. On the environmental side, it continued decarbonizing
its direct operations, and its science-based targets were validated
for net zero GHG emissions across its value chain by 2040. In
conjunction with the UN Biodiversity Conference (COP 15) in
December 2022, the company announced new long-term biodiversity and
water ambitions and strategies, aligned with the post-2020
biodiversity framework adopted by parties to the convention.
Operational impact
Social
- 40.7% Of management positions held by women, exceeding our 2022
target of 40% (2021: 39.7%)
- 7 Human rights impact assessments conducted since 2018 in
highest-risk countries (2021: 5)
Environmental
- 55% Proportion of tobacco purchased at no risk of net
deforestation of managed natural forest and no conversion of
natural ecosystems (2021: 37%)
- Triple A Score from CDP for climate, forest, and water security
for the third consecutive year
As a strong complement to the content and data included in PMI’s
2022 Integrated Report, the company has developed 12 case studies
and market stories that showcase impact and highlight how PMI
affiliates worldwide drive sustainability. All case studies and
market stories are available online in a dedicated section of
pmi.com/sustainability.
“We recognize the essential need to continue building legitimacy
and trust among our stakeholders, who are fundamental to our
company’s purpose and can accelerate the pace at which we achieve
it,” said Jennifer Motles, Chief Sustainability Officer at PMI.
“Our latest Integrated Report aims to address their demands for
more detailed and comparable information on our risks and
performance. As we continue to learn, transform, and discover
better ways to develop solutions that have a meaningful impact, we
hope our transparency and willingness to engage will spark dialogue
with those who can help accelerate our pace of change.”
Please visit pmi.com/sustainability to learn more about
sustainability at PMI and read the PMI Integrated Report 2022.
The preparation of PMI’s Integrated Report 2022 considers
guidance of international standards and frameworks, including the
Global Reporting Initiative (GRI), the UN Global Compact (UNGC),
the UN Sustainable Development Goals, the IFRS Foundation—including
use of its SASB Standards, Integrated Thinking Principles, and
Integrated Reporting Framework—and some of the recommendations from
the Task Force on Climate-related Financial Disclosures (TCFD).
Philip Morris International: Delivering a Smoke-Free
Future
Philip Morris International (PMI) is a leading international
tobacco company working to deliver a smoke-free future and evolving
its portfolio for the long term to include products outside of the
tobacco and nicotine sector. The company’s current product
portfolio primarily consists of cigarettes and smoke-free products.
Since 2008, PMI has invested more than USD 10.5 billion to develop,
scientifically substantiate and commercialize innovative smoke-free
products for adults who would otherwise continue to smoke, with the
goal of completely ending the sale of cigarettes. This includes the
building of world-class scientific assessment capabilities, notably
in the areas of pre-clinical systems toxicology, clinical and
behavioral research, as well as post-market studies. In November
2022, PMI acquired Swedish Match – a leader in oral nicotine
delivery – creating a global smoke-free champion led by the
companies’ IQOS and ZYN brands. The U.S. Food and Drug
Administration (FDA) has authorized versions of PMI’s IQOS Platform
1 devices and consumables and Swedish Match’s General snus as
Modified Risk Tobacco Products (MRTPs). As of December 31, 2022,
PMI's smoke-free products were available for sale in 73 markets,
and PMI estimates that approximately 17.8 million adults around the
world had already switched to IQOS and stopped smoking. Smoke-free
products accounted for approximately 32% of PMI’s total full-year
2022 net revenues. With a strong foundation and significant
expertise in life sciences, PMI announced in February 2021 its
ambition to expand into wellness and healthcare areas and, through
its Vectura Fertin Pharma subsidiary, aims to enhance life through
the delivery of seamless health experiences. For more information,
please visit www.pmi.com and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This press release and related materials contain projections of
future results and goals and other forward-looking statements,
including statements regarding business plans and strategies.
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 in certain markets or countries; health concerns relating
to the use of tobacco and other nicotine-containing products and
exposure to environmental tobacco smoke; litigation related to
tobacco use and intellectual property; intense competition; the
effects of global and individual country economic, regulatory and
political developments, natural disasters and conflicts; the impact
and consequences of Russia's invasion of Ukraine; changes in adult
smoker behavior; the impact of COVID-19 on PMI's business; 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, availability, and
quality of tobacco and other agricultural products and raw
materials, as well as components and materials for our electronic
devices; 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; if it is unable to attract and retain the
best global talent, including women or diverse candidates; or if it
is unable to successfully integrate and realize the expected
benefits from recent transactions and acquisitions. 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 PMI’s Annual Report on
Form 10-K for the fourth quarter and year ended December 31, 2022.
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.
1. Figures pertain to total IQOS users. See the Glossary
available on pages 205-209 of PMI Integrated Report 2022.
2. For definition of net revenues related to smoke-free
products, see the Glossary available on pages 205-209 of PMI
Integrated Report 2022. 2022 figure includes Swedish Match net
revenues from November 11, 2022 (acquisition date) to December 31,
2022. 2021 adjusted net revenues exclude the impact related to the
Saudi Arabia customs assessments.
3. Including Swedish Match and excluding PMI Duty Free.
Classification of low- and- middle-income countries is based on
World Bank report issued in 2022.
4. Investments reflect research, product and commercial
development, production capacity, scientific substantiation, and
studies on adult smoker understanding.
5. Total shipment volume includes cigarettes, other tobacco
products (OTPs), and smoke-free product consumables, See PMI’s ESG
KPI Protocol 2022 for further details.
6. Including recycling (80%) and incineration with energy
recovery (6%). 2022 figure excludes Russia.
7. Shipment volume includes heated tobacco units, e-vapor
cartridges, and e-vapor disposables. See PMI’s ESG KPI Protocol
2022 for further details.
# # #
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version on businesswire.com: https://www.businesswire.com/news/home/20230405005102/en/
David Fraser Philip Morris International T. +41 (0)58 242 4500
E. david.fraser@pmi.com
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