Publishes Low-Carbon Transition Plan with
updated targets and detailed strategy to decarbonize its direct
operations by 2025 and to achieve net-zero emissions across its
entire value chain by 2040
As the urgency to adapt and take action to tackle the climate
change crisis becomes more pressing, Philip Morris International
Inc. (PMI) (NYSE: PM) today releases its Low Carbon Transition Plan
(LCTP), which provides a transparent and detailed view on how we
plan to achieve our climate ambitions, measure success, and report
on progress.
The plan brings forward PMI’s ambitions to achieve carbon
neutrality in its direct operations (scopes 1+2) by five years, to
2025, and to achieve carbon neutrality across its entire value
chain (scopes 1+2+3) by 10 years, to 2040. In addition, it
introduces a new goal for PMI’s critical suppliers to adopt
science-based targets (SBTs) in line with the SBTs that PMI has
already committed to, aligned with the 1.5°C pathway necessary to
meet the goals of the Paris Agreement. The importance of this new
target is linked to the relevance attributed to supplier
engagement, which is essential to support the achievement of PMI’s
CO2 reduction targets for scope 3 over time, allowing the company
to maintain its leadership role in climate actions. The LCTP links
these considerable ambitions to the company’s purpose and even
greater fundamental ambition of ridding the world of cigarettes,
while further seeking a net-positive impact on society.
“By presenting our low-carbon transformation strategy, we hope
to encourage change and foster engagement with investors and other
stakeholders who will be able to evaluate whether our company is
appropriately adapting its business model for success in a net-zero
carbon economy,” said Jennifer Motles, Chief Sustainability
Officer. “The LCTP showcases how our targets are underpinned by
detailed operational measures and a solid business strategy, which
are vital to translate ambition into action, achievement, and
impact, and most important, the only way to safeguard the
sustainability of our business and to help contribute to wider
societal action.”
Delivering on climate ambitions to create long-term
value
PMI has adopted a three-step approach to achieving its emissions
targets: 1) reducing consumption and optimizing efficiency to cut
greenhouse gas (GHG) emissions, 2) minimizing the use of fossil
fuels and promoting the switch to renewable energy, and 3)
compensating unavoidable emissions by prioritizing insetting
projects (nature-based solutions) and purchasing high-quality
carbon credits.
“Strong action must be taken to reduce the risks of climate
change and stop the destruction of nature. We believe that PMI must
play its part in protecting vulnerable ecosystems and communities
around the world by reducing our environmental impact across our
value chain, and by defining and executing strategies and
initiatives to achieve our long-term targets,” said Massimo
Andolina, SVP, Operations. “Our business and sustainability
strategies are advancing hand-in-hand with increasing momentum, and
we are investing in innovative programs and taking a
multidisciplinary approach to reducing the environmental impact of
our products, operations, and value chain.”
Investing in nature-based solutions: Portfolio of Climate
Investments
Recognizing that with today’s technologies, some emissions are
unavoidable, PMI’s approach to carbon pricing announced last year
includes the introduction of two complementary internal carbon
prices: a shadow price of USD 65 per ton of CO2e and a carbon levy
of USD 8 per ton of CO2e. The shadow price helps in the
prioritization of business cases for investment in activities aimed
at structurally reducing carbon emissions, while the carbon levy
helps size the investments required today to decrease GHG emissions
through offsetting and insetting initiatives.
Guiding these initiatives, PMI has created its Portfolio of
Climate Investments (PCI), which will provide transparency in the
activities necessary to further the company’s decarbonization
efforts. The PCI’s advisory committee is responsible for managing
and allocating the budget for climate-investment solutions along
three main lines of intervention: purchases of high-quality carbon
credits to support short-term neutrality targets, investments in
insetting projects within PMI’s value chain to support long-term
net-zero ambitions, and investments in innovative technologies that
can help permanently remove carbon from the atmosphere.
Social and Environmental Connectivity
Climate change impacts not only the environment but also
people’s livelihoods. PMI’s efforts to combat climate change are
not limited to working towards carbon neutrality in its operations
and across its entire value chain. The company is also working to
adapt to the impact of climate change and increase the resilience
of its business and the communities where it operates. Recognizing
that sustainability challenges do not exist in a vacuum but are
often linked to one another and must be considered to craft
appropriate solutions, PMI commissioned Article One to prepare a
briefing paper, entitled: “Climate Justice in Global Supply Chains:
A Perspective for the Private Sector.” The paper will discuss the
connectivity between environmental and social issues, drawn from
the impacts of climate change, as well as the ability to shape
solutions that are mutually reinforcing.
Recognitions of PMI’s climate action progress
In the S&P Global Ratings’ ESG Evaluation report, PMI was
recognized not only as a leader in the transition to carbon
neutrality but an industry differentiator for its approach to
carbon pricing. The company was also included in the Dow Jones
Sustainability Index (DJSI) North America for the first time last
year, achieving the highest score of 100 in the climate strategy,
environmental reporting, and environmental policy and management
systems categories. In 2020, PMI was one of just 10 companies
worldwide to receive the prestigious “Triple A” score for
environmental sustainability leadership by CDP, and maintained its
position on CDP’s A List for Climate Change for the seventh year in
a row. In addition, CDP placed PMI on its Supplier Engagement
leaderboard for the fourth consecutive year.
To access PMI’s LCTP Report, as well as additional information
on PMI’s approach to sustainability, please refer to the LCTP
Report and PMI Sustainability. To review PMI’s integrated
performance, please refer to PMI’s 2020 Integrated Report, which
includes progress on the company’s efforts to reduce its carbon
footprint. The report addresses some recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD), while the
remainder are covered by the company’s reporting to CDP.
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,
its shareholders, and other stakeholders. 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, versions of PMI's
IQOS Platform 1 device and consumables 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 products,
nicotine-containing vapor products and oral nicotine products. As
of September 30, 2021, PMI’s smoke-free products are available for
sale in 70 markets in key cities or nationwide, and PMI estimates
that approximately 14.9 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.
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Philip Morris
International David Fraser Philip Morris International T.
+41 (0)58 242 4500 E. david.fraser@pmi.com
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