S&P ESG evaluation distinguishes PMI’s
strengths in several ESG areas
Philip Morris International Inc. (PMI) (NYSE:PM) is transforming
its business to deliver a smoke-free and sustainable future. Today,
the company announced that S&P Global Ratings’ ESG Evaluation
report has assessed PMI’s approach to environmental, social, and
governance (ESG) topics and confirmed that PMI has positively
differentiated itself within the tobacco sector.
The S&P Global Ratings ESG evaluation assesses a company’s
ESG strategy and ability to prepare for potential future risks and
opportunities, and provides a forward-looking, long-term opinion of
a company’s readiness for disruptive ESG risks and opportunities.
It provides an overall score that allows comparison with other
entities globally, including sector peers, and consists of a
combined sector/region score, an entity-specific score, and a
preparedness score. Based on entity-specific scores — designed to
indicate how a company is actively and effectively managing its
exposure to ESG risks and opportunities compared with its industry
peers—PMI is placed third in the E-entity specific score, 8th in
the S-entity specific score, and 15th in the G-entity specific
score among all 25 current publicly available ESG evaluations.
“I am proud that our dedication to sustainability, which is
fundamental to the transformation of our company, has been
recognized externally by S&P Global Ratings,” said Emmanuel
Babeau, Chief Financial Officer, PMI. “It is our firm belief that
sustainability and business performance do not follow separate
paths—they are fully interrelated and mutually reinforcing, and
should be organized and presented to all stakeholders, including
shareholders, in an integrated way.”
In February 2021, PMI announced an increased ambition for the
contribution of its smoke-free products to total net revenues to
more than 50 percent in 2025, meaning that in five years,
cigarettes would account for less than half of PMI’s total net
revenues. The company also stated its aspiration to commercialize
its smoke-free products in a total of 100 markets by the end of
2025, from 64 at the end of 2020. Additionally, PMI announced an
aspirational target of at least USD 1 billion in annual net
revenues from “beyond nicotine” products by 2025. This new
aspiration reflects additional growth potential and further
acceleration of the company’s transformation, leveraging PMI’s
significant capabilities within life sciences, device technology,
consumer expertise and more.
Recognizing PMI’s work in delivering a smoke-free future,
S&P Global Ratings notes: “The company has made significant
R&D investments, by sector standards, and is upskilling its
management team to prepare for this transition. In our view, the
company is well placed to meet its ambitions.” Adding: “We believe
PMI is adequately prepared for future disruptions, reflecting its
significant investments in [reduced-risk products (RRPs)], which
smokers seem to accept as an alternative to cigarettes, and its
solid track record of strategic execution despite headwinds.”
S&P also recognized PMI’s “approach to customer
engagement—unique among its peers—which educates consumers directly
about the health consequences of sustained tobacco use and supports
low-income customers in making the transition from cigarettes to
reduced-risk products.”
To make its progress both measurable and comprehensive, PMI
developed a set of bespoke key performance indicators (KPIs) that
it calls Business Transformation Metrics (BTM), which PMI reports
on periodically, allowing stakeholders to better assess both the
pace and the scale of its transformation. Many of the data
indicators showcase how PMI is reallocating resources from its
traditional cigarette business, basing its success on a future in
which it no longer makes or sells cigarettes. Additionally, in
2020, PMI integrated its sustainability and finance functions, so
that the sustainability function now reports to the CFO. That year,
the company’s Board of Directors also issued and signed a Statement
of Purpose, published in PMI’s Proxy Statement, reaffirming its
commitment to delivering on a future away from cigarettes.
On preparedness for the future, the S&P ESG Evaluation
states: “Management strongly believes in embedding a new culture
across the board and in PMI’s leadership team, with the same
mindset and behaviors trickling down the organization. It has made
significant organizational changes in the past three years with 45
percent of senior management being new. The senior team has been
upskilled on topics such as sustainability, technology, and
pharmacology. The company aims for at least 40 million adults [to
have switched to PMI’s smoke-free products and stopped smoking by
2025. The target is backed by a remuneration structure that links
executives’ performances to the progression of the RRPs.”
“Aligned with our purpose and commitment to put sustainability
at the core of our corporate strategy, we are working to seamlessly
integrate ESG into our culture, business strategy, and
executive-compensation determinations. We aim to continuously
improve our performance and drive significant and measurable
progress toward our targets and aspirations—all communicated
through open and clear reporting,” said Jennifer Motles, Chief
Sustainability Officer, PMI. “Our upcoming Integrated Report will
provide a comprehensive overview of our main challenges and explain
how we approach them. The product—and its impact on health—remains
at the core of PMI’s strategy.”
Later this month, PMI will release its 2020 Integrated Report,
which details how the organization’s strategy, governance,
performance, and prospects create value over the short, medium, and
long term. For more information, visit
www.PMI.com/Sustainability.
Forward-Looking and Cautionary Statements
This press release contains 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 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; 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, 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; 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.
The COVID-19 pandemic has created significant societal and
economic disruption, and resulted in closures of stores, factories
and offices, and restrictions on manufacturing, distribution and
travel, all of which will adversely impact our business, results of
operations, cash flows and financial position during the
continuation of the pandemic. Our business continuity plans and
other safeguards may not be effective to mitigate the impact of the
pandemic. Currently, significant risks include our diminished
ability to convert adult smokers to our RRPs, significant volume
declines in our duty-free business and certain other key markets,
disruptions or delays in our manufacturing and supply chain,
increased currency volatility, and delays in certain cost saving,
transformation and restructuring initiatives. Our business could
also be adversely impacted if key personnel or a significant number
of employees or business partners become unavailable due to the
COVID-19 outbreak. The significant adverse impact of COVID-19 on
the economic or political conditions in markets in which we operate
could result in changes to the preferences of our adult consumers
and lower demand for our products, particularly for our mid-price
or premium-price brands. Continuation of the pandemic could disrupt
our access to the credit markets or increase our borrowing costs.
Governments may temporarily be unable to focus on the development
of science-based regulatory frameworks for the development and
commercialization of RRPs or on the enforcement or implementation
of regulations that are significant to our business. In addition,
messaging about the potential negative impacts of the use of our
products on COVID-19 risks may lead to increasingly restrictive
regulatory measures on the sale and use of our products, negatively
impact demand for our products, the willingness of adult consumers
to switch to our RRPs and our efforts to advocate for the
development of science-based regulatory frameworks for the
development and commercialization of RRPs.
The impact of these risks also depends on factors beyond our
knowledge or control, including the duration and severity of the
pandemic, its recurrence in our key markets, actions taken to
contain its spread and to mitigate its public health effects, and
the ultimate economic consequences thereof.
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, 2021. 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.
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, as well
as smoke-free products, associated electronic devices and
accessories, and other nicotine-containing products in markets
outside the U.S. In addition, PMI ships versions of its IQOS
Platform 1 device and consumables to Altria Group, Inc. for sale
under license in the U.S., where these products have received
marketing authorizations from the U.S. Food and Drug Administration
(FDA) under the premarket tobacco product application (PMTA)
pathway; the FDA has also authorized the marketing of a version of
IQOS and its consumables as a modified risk tobacco product (MRTP),
finding that an exposure modification order for these products is
appropriate to promote the public health. 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
product portfolio includes heat-not-burn and nicotine-containing
vapor products. As of March 31, 2021, PMI’s smoke-free products are
available for sale in 66 markets in key cities or nationwide, and
PMI estimates that approximately 14 million adults around the world
have already switched to IQOS and stopped smoking. For more
information, please visit www.pmi.com and www.pmiscience.com.
S&P Global Ratings ESG Evaluation
S&P Global Ratings ESG Evaluation is an assessment of a
company’s ESG strategy and ability to prepare for potential future
risks and opportunities. The ESG Evaluation provides a
forward-looking, long-term opinion of readiness for disruptive ESG
risks and opportunities. The methodology is founded on this
organization’s sector and company expertise, relying upon in-depth
engagement with company management to assess material ESG impacts
on the company, past, present, and future.
# # #
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005525/en/
Philip Morris International Daniella Weinberg Philip
Morris International T. +41 (0)58 242 4500 E. daniella.weinberg@pmi.com
Philip Morris (NYSE:PM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Philip Morris (NYSE:PM)
Historical Stock Chart
From Apr 2023 to Apr 2024