| INTEGRATED REPORT 2019 |
Our performance at a glance
The ESG metrics on this page are explained in the relevant sections of our Integrated Report 2019 and in this online supplement. Find out more about this online supplement and please also refer to the glossary.
Our Integrated Report and online supplement cover the 2019 calendar year, but the aspirations, goals and forward-looking plans they contain may be impacted by COVID-19 and its effects on our business, which are currently unknown. Aspirational targets and goals do not constitute financial projections, and achievement of future results is subject to risks, uncertainties and inaccurate assumptions, as outlined in our forward-looking and cautionary statements.
Financials
Financials
| Financials (in millions USD, except per share data)1 | 2018 | 2019 | 2020 |
|---|---|---|---|
| Revenues including excise taxes | 79,823 | 77,921 | 76,047 |
| Excise taxes on products2 | 50,198 | 48,116 | 47,353 |
| Net revenues | 29,625 | 29,805 | 28,694 |
| Operating income | 11,377 | 10,531 | 11,668 |
| Net earnings attributable to PMI | 7,911 | 7,185 | 8,056 |
| Earnings per share (EPS) | 5.08 | 4.61 | 5.16 |
| Operating cash flow | 9,478 | 10,090 | 9,812 |
| Total assets | 39,801 | 42,875 | 44,815 |
| Total liabilities | 50,540 | 52,474 | 55,446 |
| Capital expenditures | 1,436 | 852 | 602 |
| R&D expenditure | 383 | 465 | 495 |
1 The information is a summary and is qualified in its entirety by reference to the full texts of PMI’s Annual Reports for the years ended 2018 through 2020, available on PMI.com.
2 This indicator refers to the amount paid by PMI entities, and excludes excise tax paid in several markets where third-party operators collected taxes on PMI products. The total amount of excise tax paid by consumers on PMI products amounted to USD 72.4 billion in 2020.
3 Net cash provided by operating activities.
Pillar 1 - Performance - Innovating for better products
Business transformation metrics: Product health impacts
| 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|
| R&D expenditure (smoke-free/total)1 | 72% | 74% | 92% | 98% |
| Total R&D expenditure (in millions USD) | 429 | 453 | 383 | 465 |
| Number of R&D positions (FTEs)2 | n/a | n/a | 764 | 942 |
| Patents granted relating to smoke-free products (cumulative) | 1,800 | 2,900 | 4,600 | 5,800 |
| Patents granted in IP5 jurisdictions relating to smoke-free products (cumulative)3 | 170 | 300 | 480 | 740 |
| Number of studies completed by PMI on smoke-free products (cumulative, since 2015) | ||||
| * Toxicological assessment | 36 | 57 | 82 | 109 |
| * Clinical assessment (short-term, focused on biomarkers) | 11 | 12 | 19 | 19 |
| * Perception and behavior | 7 | 7 | 9 | 9 |
1 Smoke-free products include heated tobacco units and e-cigarettes. Total products include smoke-free products, cigarettes, and other combustible products.
2 R&D positions: include scientists, engineers, technicians, and support staff. Comparable data for years prior to 2018 are not available, as the scope of R&D positions changed following company organizational changes.
3 Includes published international(PCT) patent applications. IP5 jurisdictions include Europe (patent applications published and patents granted by the European Patent Office), China, South Korea, Japan, and the U.S.
Business transformation metrics: Access to smoke-free products¹
| 2016 | 2017 | 2018 | 2019 | 2025 aspirations2 | |
|---|---|---|---|---|---|
| Number of factories producing smoke-free products out of total number of factories3 | 3 out of48 | 4 out of46 | 8 out of44 | 8 out of 38 | |
| Total SKU count – cigarettes4 | 4,421 | 4,201 | 3,968 | 3,799 | |
| Total SKU count – heated tobacco units | 62 | 145 | 253 | 414 | |
| Number of markets where PMI smoke-free products are available for purchase | 20 | 38 | 44 | 52 | |
| Proportion of markets where PMI smoke-free products are available, which are outside the OECD5 | 32% | 43% | 47% | 47% | |
| Number of IQOS stores | 26 | 63 | 81 | 199 | |
| Number of retailers that sell PMI smoke-free product consumables (in thousands) | 90 | 292 | 488 | 679 | |
| Commercial expenditure (smoke-free/total) | 15% | 39% | 60% | 71% | |
| Net revenues (smoke-free/total)6 | 2.7% | 12.7% | 13.8% | 18.7% | 38% - 42% |
| Number of markets where net revenues from smoke-free products exceed 10% of total net revenues | 1 | 5 | 19 | 31 | |
| Number of markets where net revenues from smoke-free products exceed 50% of total net revenues | 0 | 1 | 3 | 4 | |
| Smoke-free product shipment volume (billion units) | 7.7 | 36 | 42 | 60 | >250 |
| Combustible product shipment volume (billion units) | 845 | 791 | 767 | 732 | <550 |
| Smoke-free product shipment ratio (smoke-free/total)7 | 0.9% | 4.4% | 5.1% | 7.6% | >30% |
| Total users of PMI smoke-free products (in millions)8 | 2.1 | 6.9 | 9.6 | 13.6 | |
| Estimated users who have stopped smoking and switched to PMI smoke-free products – non-OECD (in millions)8 | 0.0 | 0.2 | 1.1 | 3.0 | >20 |
| Estimated users who have stopped smoking and switched to PMI smoke-free products – worldwide (in millions)8 | 1.5 | 4.7 | 6.6 | 9.7 | >40 |
1 Smoke-free products: include heated tobacco units and e-cigarettes.Total products: include smoke-free products, cigarettes, and other combustible products.
2 Aspirations: assuming constant PMI marketshare. We do not set aspirational targets for commercial expenditure, but expect ratio to continue increasing to enable the stated outcome in terms of shipment volume. Note: Aspirational targets and goals do not constitute financial projections.
3 Previous years’ data were restated to account for our second manufacturing facility in Italy, Bologna, that started producing heated tobacco units in 2016.
4 “SKU” stands for stock keeping unit.
5 Excluding PMI Duty Free
6 Excluding excise taxes. Forfuture periods, at today’s pricing and excise tax assumptions.
7 The smoke-free product shipment ratio is compiled based on millions of units.
8 See glossary on page 188.
Pillar 2 - Operating with excellence
Responsible marketing and sales practices
| 2018 | 2019 | 2020 | Goals | |
|---|---|---|---|---|
| Total number of compliance training sessions conducted on PMI’s Marketing Code (employees/third parties) | 23,438 | 14,500 (49%/51%) | ||
| Number of violations of the Marketing Code or Good Conversion Practices (GCP) resulting in substantiated cases of misconduct | 8 | 42 |
Sustainable supply chain management
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Total number of suppliers1 | 50,000 | >36,000 | >33,200 | |
| Total procurement spend (in billion USD)2 | n/a | 10 | 9.9 | |
| Number of critical suppliers3 | n/a | n/a | 95 | |
| Critical suppliers, as a proportion of total procurement spend | n/a | n/a | 35% | |
| Critical suppliers’ procurement spend assessed in PMI’s supplier due diligence platform (STEP)4 | n/a | n/a | 84% | 90% by 2020 |
| Critical suppliers of direct materials assessed in STEP, expressed as a proportion of procurement spend on critical suppliers of direct materials | n/a | n/a | 73% | |
| Critical suppliers of electronics assessed in STEP, expressed as a proportion of procurement spend on critical suppliers of electronics | n/a | n/a | 100% | |
| Number of tobacco farmers contracted by PMI and PMI tobacco suppliers | >350,000 | >350,000 | 335,000 | |
| Number of third-party tobacco suppliers with whom PMI has a direct contractual relationship5 | 15 | 15 | 13 | |
| Number of PMI leaf operations that contract tobacco farmers directly | 9 | 8 | 8 | |
| Number of field technicians providing support to contracted farmers and monitoring the implementation of PMI’s Good Agricultural Practices (GAP) and Agricultural Labor Practices (ALP) | 2,790 | 2,610 | 2,875 | |
| Proportion of tobacco purchased through direct contracts by PMI and PMI tobacco suppliers | 90% | 93% | 96% | >90% (ongoing) |
| Proportion of tobacco purchased for which labor practices have been systematically monitored | 77% | 88% | 92% | |
| Proportion of tobacco purchased assessed by AB Sustain (cumulative, since 2016)6 | 55% | 100% | n/a | |
| Number of tobacco supplier locations (countries) assessed by Control Union on ALP topics | 6 | 3 | 3 | |
| Cumulative number of tobacco supplier locations (countries) assessed by Control Union since 2013 on ALP topics7 | 19 | 21 | 22 | 24 by 2020 |
1 Suppliers: refers to tier1 suppliers, parent companies.
2 Procurement spend excludes tobacco leaf sourcing.
3 Suppliers’ criticality is evaluated taking into account spend segmentation and nature of component, aswell as supply flexibility (single source/not easily substitutable) as relevant. 2019 figure includes tier1 suppliers of direct materials and electronics managed by PMI’s central procurement team, and excludes tobacco leaf sourcing.
4 We started to formally onboard critical suppliers into our supplier due diligence platform (STEP) in July 2019.
5 Data refers to parent companies
6 In 2019, the industry did not run collective assessments with AB Sustain as it focused on the development of a new Sustainable Tobacco Production (STP) 2.0 program, but PMI continued to assess conformity to the GAP standards through annual self-assessments completed by all our suppliers. Between 2016 and 2018, AB Sustain had conducted formal assessments in 100% of our sourcing countries.
7 Cumulative number since 2013 excludes locations covered more than once by Control Union assessments over this period
Respect for human rights
| 2017 | 2018 | 2019 | 2025 | |
|---|---|---|---|---|
| Cumulative number of human rights impact assessments conducted | 0 | 1 | 2 | 10 |
Responsible & transparent R&D
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Cumulative number of scientific publications by PMI since 2008 | <200 | 340 | 365 |
| Cumulative number of institutions which have taken part in sbv IMPROVER since 2011 | 400 | 450 | 500 |
| Cumulative number of countries where institutions which have taken part in sbv IMPROVER since 2011 are located | 60 | 63 | 65 |
| Cumulative number of peer-reviewed publications issued as a result of sbv IMPROVER challenges since 20111 | 16 | 16 | 16 |
| Cumulative number of studies published on INTERVALS platform since 2018 | n/a | 9 | 40 |
| Cumulative number of protocols published on INTERVALS platform since 2018 | n/a | 57 | 103 |
| Cumulative number of data sets published on INTERVALS platform since 2018 | n/a | 144 | 354 |
1 Peer-reviewed publications issued as a result of sbv IMPROVER challenges conducted in the past three years are currently under preparation or validation, and are expected to be published in 2020
Business integrity
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Proportion of employees participating in training sessions pertaining to PMI’s Guidebook for Success | 93.5% | 86.9% | 86.6% |
| Total number of compliance training sessions on PMI’s Guidebook for Success completed (employees/third parties) | 189,696 (75%/25%) | 193,063 (82%/18%) | 253,763 (88%/12%) |
| Total number of reports received, involving compliance allegations and other concerns | 714 | 872 | 977 |
| Number of closed cases involving compliance allegations (number of unsubstantiated cases/number of substantiated cases) | 505 (188/317) | 582 (246/338) | 653 (284/369) |
| Proportion of substantiated claims, out of all closed cases involving compliance allegations | 62.8% | 57.7% | 56.5% |
Illicit tobacco trade prevention¹
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Coverage for tracking and tracing – master case level2 | 100% | 100% | 100% | 100% |
| Tracking and tracing – proportion of packs sold with unique code applied3 | 75% | 85% | 100% | 100% |
| Additional Framework Cooperation Agreements signed with law enforcement agencies/governments in a given year – number of countries | 10 | 5 | 2 | +5 by 2021 +12 by 2025 |
| Regional studies and country analysis to improve awareness of illicit trade – proportion of global consumption covered4 | 25% | 27% | 20% | 35% by 2020 |
| Number of law enforcement officers trained on how to authenticate PMI products5 | 717 | 500 | 6,617 | 500 by 2021 + 2,500 by 2025 |
| Number of countries with law enforcement agencies trained on how to authenticate PMI products | 15 | 10 | 23 | 10 per year |
| Anti-Counterfeiting Cooperation Agreements signed with our suppliers | 100% by 2025 | |||
| Number of PMI IMPACT projects selected per funding round6 | 31 | 29 | 0 | 90 by 2021 |
| Number of countries from which PMI IMPACT projects were selected per funding round6 | 16 | 22 | 0 | 60 by 2021 |
| Number of applications (project proposals) received by PMI IMPACT per funding round6 | 157 | 0 | 0 | 540 by 2021 |
| Number of countries from which applications were received by PMI IMPACT per funding round6 | 56 | 0 | 0 | 140 by 2021 |
| PMI IMPACT grants allocated in USD million7 | 28 | 20 | 0 | 100 |
1 Data cover PMI combustible tobacco products and smoke-free product consumables and devices.
2 Full coverage equates to 95 percent tracking and tracing in our supply chain (excluding kretek business). Five percent of master cases are not covered; these are destined to countries that are not identified as a source of potential diversion or where PMI sells to a single customer in the country.
3 Excludes kretek business
4 In 2019, we did not reach our target of 35 percent, as one study was not carried out.
5 The number of training sessions delivered each year depends on specific needs and requests raised locally by law enforcement agencies.The significant increase in 2019 was mainly driven by additional training sessions delivered in Latin America & Canada to better tackle the nature of illicit trade in the region, where smuggled “Illicit White” cigarettes are predominant whereas counterfeiting of PMI cigarettes remains low within the illicit trade of cigarettes.
6 There were no funding rounds of PMI IMPACT in 2018-2019. Data for 2017 and 2018 were restated: one project in 2017 was implemented without PMI IMPACT funding, and two projects in 2018 were not implemented. Other data related to PMI IMPACT were restated accordingly.
7 PMI pledged USD 100 million to PMI IMPACT. Goals related to PMI IMPACT are stated for the period 2016-2021.
Pillar 3 - Caring for the people we work with
Socio-economic well-being of tobacco-farming communities¹
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Number of tobacco farmers contracted by PMI and PMI tobacco suppliers | >350,000 | >350,000 | 335,000 | |
| Number of countries where farmers contracted by PMI and PMI tobacco suppliers are located | 28 | 27 | 24 | |
| Number of farmers with whom PMI has direct contracts | 23,000 | 21,000 | 16,500 | |
| Number of farmers who have direct contracts with PMI tobacco suppliers | 332,000 | >329,000 | 318,500 | |
| Number of third-party tobacco suppliers with whom PMI has a direct contractual relationship2 | 15 | 15 | 13 | |
| Number of PMI leaf operations that contract tobacco farmers directly | 9 | 8 | 8 | |
| Number of field technicians providing support to contracted farmers and monitoring the implementation of PMI’s Good Agricultural Practices (GAP) and Agricultural Labor Practices (ALP) | 2,790 | 2,610 | 2,875 | |
| Proportion of tobacco purchased for which labor practices have been systematically monitored | 77% | 88% | 92% | |
| Number of terminated contracts due to ALP violations (per crop season) | 36 | 50 | 641 | |
| Total number of ALP prompt actions recorded by field technicians | 12,749 | 18,543 | 14,440 | |
| Proportion of ALP prompt actions recorded by field technicians: | ||||
| • safe working environment | 63% | 74% | 73% | |
| • hazardous work performed by children | 35% | 25% | 19% | |
| • other | 2% | 1% | 8% | |
| Total number of ALP prompt actions resolved | 10,154 | 13,687 | 8,137 | |
| Number of ALP prompt actions recorded by field technicians relating to safe working environment | 8,087 | 13,780 | 10,519 | |
| Number of ALP prompt actions recorded by field technicians relating to non-payment of minimum wage to farmworkers3 | n/a | n/a | 1,158 | |
| Number of ALP prompt actions recorded by field technicians relating to child labor4 | 4,417 | 4,587 | 2,712 | |
| Proportion of farms monitored found with child labor incidents4 | 1.2% | 1.3% | 0.8% | |
| Proportion of ALP prompt actions recorded by field technicians relating to child labor that were resolved4 | 67% | 89% | 88% | |
| Proportion of tobacco farmworkers provided with safe and adequate accommodation5 | n/a | n/a | 80% | 100% by 2020 |
| Proportion of farmers and farmworkers having access to personal protective equipment6 | n/a | n/a | 99% | 100% by 2020 |
1 The farm-level data related to our tobacco supply chain reported in this report cover 22 countries we source from. It excludes Ecuador and Lebanon.
2 Data refers to parent companies.
3 We introduced this category of prompt actions in 2019.
4 Our monitoring and reporting of child labor refer to situations of hazardous work performed by children below 18 years old.
5 We introduced this category of prompt actions in 2019. Scope is limited to farmers providing accommodation to workers (approximately 6% of the total farmer base)..
6 We introduced this category of prompt actions in 2019.
Health, safety, and well-being at work
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Lost time incident (LTI) rate per 200,000 hours worked – PMI and contracted employees1 | 0.10 | 0.13 | 0.12 | <0.10 |
| LTI rate per 200,000 hours worked – PMI employees | 0.10 | 0.13 | 0.12 | |
| LTI rate per 200,000 hours worked – contracted employees | 0.07 | 0.08 | 0.10 | |
| Total recordable incidents rate (TRIR) per 200,000 hours worked – PMI and contracted employees | 0.22 | 0.22 | 0.20 | <0.30 |
| TRIR per 200,000 hours worked – PMI employees | 0.22 | 0.22 | 0.20 | |
| TRIR per 200,000 hours worked – contracted employees | 0.20 | 0.30 | 0.17 | |
| Number of fatalities – PMI and contracted employees | 2 | 2 | 1 | 0 |
| Number of fatalities – contractors2 | 1 | 1 | 0 | 0 |
| Number of fatalities – members of the public3 | 9 | 3 | 10 | 0 |
| Collision rate within PMI’s fleet of vehicles per year (collisions per million km driven) | 1.01 | 0.91 | 0.87 | <0.80 by 2022 |
| Proportion of manufacturing facilities with OHSAS 18001 and ISO 14001 certification4 | 91% | 97% | 98% | 100% by 2020 |
| Occupational illness frequency rate (OIFR) per 200,000 hours worked – PMI and contracted employees | 0.0027 | 0.0013 | 0 | |
| Number of markets with health and well-being committees | 36 | >40 | 55 |
1 We define a contracted employee as an employee who is under the direct supervision of PMI employees but employed by a temporary employment agency
2 We define a contractor as a person employed or working on behalf of a third-party company contracted by PMI, who remains under the direct supervision of their employer rather than PMI and are often involved in project-specific or outsourcing arrangements.
3 It is to our deep regret that we endured road traffic fatalities in 2019, including one PMI employee and 10 members of the public (read more on page 125).
4 Scope: manufacturing facilities producing more than three billion cigarette equivalents annually. The 2018 figure has been adjusted due to an internal reporting error.
Fair working conditions
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Number of PMI employees | 80,591 | 77,435 | 73,542 |
| Number of PMI full-time equivalent (FTE) positions | n/a | 77,039 | 71,795 |
| Proportion of employees covered by Collective Labor Agreements | 67% | 65% | 63% |
| Total number of Collective Labor Agreements | 80 | 81 | 80 |
| Total number of countries with Collective Labor Agreements | 35 | 35 | 35 |
1
PMI's workforce at year-end 2019
Number of employees by employment contract (permanent and temporary) by gender
| Women employed on a permanent contract | 29,137 |
|---|---|
| Women employed on a temporary contract | 1,494 |
| Men employed on a permanent contract | 40,965 |
| Men employed on a temporary contract | 1,946 |
Number of employees by employment contract (permanent and temporary), by region
| Employees on a permanent contract in European Union region | 18,167 |
|---|---|
| Employees on a temporary contract in European Union region | 2,272 |
| Employees on a permanent contract in Middle East & Africa region, including PMI Duty Free | 3,239 |
| Employees on a temporary contract in Middle East & Africa region, including PMI Duty Free | 186 |
| Employees on a permanent contract in South & Southeast Asia region | 29,646 |
| Employees on a temporary contract in South & Southeast Asia region | 137 |
| Employees on a permanent contract in Eastern Europe region | 6,786 |
| Employees on a temporary contract in Eastern Europe region | 171 |
| Employees on a permanent contract in East Asia & Australia region | 4,365 |
| Employees on a temporary contract in East Asia & Australia region | 154 |
| Employees on a permanent contract in Latin America & Canada region, and U.S. | 7,899 |
| Employees on a temporary contract in Latin America & Canada region, and U.S. | 520 |
Number of employees by employment type (full-time and part-time), by gender
| Women employed on a full-time contract | 30,028 |
|---|---|
| Women employed on a part-time contract | 603 |
| Men employed on a full-time contract | 42,667 |
| Men employed on a part-time contract | 244 |
All data as of December 31, 2019. Presentation of information and data aligns with guidance of GRI standard 102-8 (2016).
Diverse and inclusive working environment
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Proportion of female employees | 41.6% | 42.1% | 41.7% | |
| Proportion of management positions held by women1 | 34.4% | 35.1% | 36.1% | At least 40% by 2022 |
| Proportion of female employees at different managerial levels: 1 | ||||
| * managers | 36.1% | 36.6% | 37.5% | |
| * directors | 27.9% | 29.4% | 31.2% | |
| * senior management | 13.7% | 15.2% | 17.4% | |
| Proportion of new hires in management positions that are women1 | 42.8% | 40.6% | 40.7% | 50% |
| Proportion of new hires at junior levels that are women1 | 40.6% | 40.4% | 43.8% | 50% |
| Proportion of promotions in management positions that are women1 | 37.4% | 37.8% | 37.4% | |
| Number of women on PMI’s Company Management | 2 (out of 20) | 2 (out of 22) | 2 (out of 25) | |
| Proportion of women on PMI’s Company Management | 10% | 9% | 8% | |
| Number of women on PMI’s Board of Directors | 2 (out of 13) | 3 (out of 12) | 3 (out of 12) | |
| Proportion of women on PMI’s Board of Directors | 15% | 25% | 25% | |
| Proportion of employees at different age groups: | ||||
| * below30 n/a 18.6% | n/a | 18.6% | 17.3% | |
| • between 30 and 50 | 71.6% | 72.0% | ||
| • above 50 years old 9.8% | 9.8% | 10.7% | ||
| Number of nationalities among PMI’s employees | n/a | >100 | 126 | |
| Number of countries with affiliates with LGBTQ+ initiatives or networks | n/a | 25 | 27 |
1 We have expanded the scope of our gender diversity data to cover approximately 95% of PMI’s total workforce. Other related data and previous years’ data have been restated accordingly.
Talent attraction, retention, and employability
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Employee overall turnover rate1 | 9.37% | 11.51% | 14.10% | |
| Women employee overall turnover rate | 7.72% | 10.80% | 15.54% | |
| Employee voluntary turnover rate | 3.96% | 4.12% | 4.53% | |
| Spend for learning per employee (in USD)2 | n/a | n/a | 464 | |
| Proportion of employees covered by performance review3 | 77.3% | 77.0% | 79.4% | |
| Employee Net Promoter Score4 | n/a | n/a | +16 | At least +30 by 2025 |
1 Our transformation journey as we mobilized to deliver our vision of a smoke-free future resulted in higher turnover in 2019. This, combined withour business strategy to close our skills gap, a number of planned restructures and closure of some factories, contributed to the increase observed.
2 2019 figure only covers external vendor spend.
3 Data cover approximately 75% of PMI’s total workforce.
4 In 2019, we conducted a global survey to which over 34,000 employees (close to half our total workforce) responded.We measured the engagement of our workforce using the employee Net Promoter Score (eNPS), following a methodology similar to that we use to measure consumer engagement. The score can range from -100 to +100. The 2019 Transformation survey will serve as a baseline through which to track employee engagement.
Community support
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Number of social contributions supported by PMI (charitable donations/community investments)1 | 275 | 280 | 170 (145/25) |
| Number of partner organizations supported by PMI’s social contributions1 | 242 | 239 | 147 |
| Number of countries where projects supported by PMI’s social contributions were implemented | 63 | 63 | 43 |
| Number of direct beneficiaries of projects supported by PMI’s social contributions | n/a | >300,000 | >467,000 |
| Value of cash contributions (in millions USD) (charitable donations/community investments) | 29.5 | 28.3 | 17.0 (14.8/2.2) |
| Approximate value of in-kind donations (in ’000 USD) | 175 | 260 | 205 |
| Approximate value of management costs of PMI’s social contributions (in ’000 USD)2 | n/a | n/a | 650 |
| Approximate total number of volunteer hours by PMI employees3 | n/a | 18,000 | 16,700 |
| Approximate value of employee time spent on volunteering (in ’000 USD)3 | n/a | 500 | 430 |
1 The decline in value and number of social contributions in 2019 resulted from the decentralization of our policy approach and the elimination of the central budget that was previously allocated to the markets on a yearly basis. As part of our policy changes we also introduced a distinction between charitable donations and community investments. Our charitable donations are now funded and initiated by the markets while the community investments, focused on sustainability issues associated with our value chain, are now funded and managed by the business function leading the efforts to address the issue (e.g. child labor prevention programs in tobacco growing communities are now managed by our Leaf department). While these changes led to a reduction in both charitable donations and community investments in this first year, we do expect to see an increase in community investments in coming years.
2 This indicator was introduced in 2019
3 Data was initially collected in 2018 and covers volunteering during paid working hours. The decrease in 2019 is mainly driven by changes in Japan and Russia: PM Japan had a large volunteering event in 2018 that did not take place in 2019, and PM Russia conducted a higher number of activities outside of working hours (with the purpose of involving employees’ family). We are currently finalizing a PMI wide volunteering guideline which will be rolled out in 2020 and that we expect will significantly boost employee volunteering.
Pillar 4 - Protecting the environment
Climate protection
| 2010 baseline | 2017 | 2018 | 2019 | Goal | Scope | |
|---|---|---|---|---|---|---|
| CO{_2_}e scope 1 (metric tons) | 443,186 | 388,384 | 408,162 | 397,210 | PMI factories, offices, and fleet1 | |
| CO{_2_}e scope 2 (metric tons) | 470,864 | 241,355 | 175,785 | 158,672 | PMI factories and offices | |
| CO{_2_}e scope 1+2 (metric tons) | 914,050 | 629,739 | 583,947 | 555,882 | Carbon neutrality by 2030 | PMI factories, offices, and fleet |
| CO{_2_}e scope 1 from fleet (metric tons) | 143,148 | 119,588 | 114,936 | 111,400 | PMI fleet | |
| CO{_2_}e emissions from vehicles (g CO{_2_}e per km driven) | 296 | 226 | 221 | 222 | PMI fleet | |
| CO{_2_}e scope 3 (’000 metric tons)2 | 7,148 | 4,906 | 4,714 | 4,127 | PMI value chain | |
| CO{_2_}e scope 1+2+3 (’000 metric tons) | 8,062 | 5,536 | 5,298 | 4,682 | Carbon neutrality by 2050 | PMI value chain |
| Carbon in-setting credits (metric tons) | 0 | 0 | 0 | PMI factories, offices, and fleet | ||
| Carbon off-setting certificates (metric tons)3 | 0 | 956 | 1,242 | PMI factories, offices, and fleet | ||
| Number of carbon-neutral factories | 0 | 0 | 1 | All by 2030 | PMI factories | |
| CO{_2_}e scope 1+2+3 intensity (kg per million cigarettes equivalent)4 | 8,706 | 6,687 | 6,552 | 5,917 | PMI value chain | |
| CO{_2_}e scope 3 biogenic emissions (’000 metric tons) | n/a | 3,442 | 2,438 | PMI value chain | ||
| CO{_2_}e scope 1+2 absolute reduction versus 2010 baseline5 | 31% | 36% | 39% | 30% by 2020 40% by 2030 60% by 2040 | PMI factories, offices, and fleet | |
| CO{_2_}e scope 1+2+3 absolute reduction versus 2010 baseline5 | 31% | 34% | 42% | 40% by 2030 | PMI value chain | |
| CO{_2_}e scope 1+2+3 intensity reduction versus 2010 baseline | 22% | 25% | 32% | 30% by 2020 | PMI value chain | |
| CO{_2_}e intensity reduction in tobacco curing versus 2010 baseline | 38% | 47% | 61% | 70% by 2020 | PMI tobacco supply chain | |
| Proportion of flue-cured tobacco purchased cured with renewable fuel sources (self-sufficient firewood and biomass adoption) | 36% (29% + 7%) | 46% (33% + 13%) | 51% (36% + 15% | 70% by 2020 | PMI tobacco supply chain | |
| Proportion of Virginia tobacco purchased cured with coal | 20% | 15% | 16% | 0% by 2020 | PMI tobacco supply chain | |
| Approximate total number of curing barns upgraded since 2014 (cumulative) | 57,000 | 76,000 | 80,800 | 80,000 by 2020 | PMI tobacco supply chain | |
| Total energy consumption (gigajoules)6 | 8,025,559 | 8,896,274 | 9,353,222 | 9,456,576 | PMI factories, offices, and fleet | |
| Energy intensity (gigajoules per million cigarettes equivalent)7 | 8.60 | 10.75 | 11.57 | 11.95 | PMI factories, offices, and fleet | |
| Fuel consumption from non- renewable sources (gigajoules) | 5,597,766 | 5,988,022 | 5,819,072 | PMI factories, offices, and fleet | ||
| Fuel consumption from renewable sources (gigajoules) | 44,389 | 61,163 | 128,967 | PMI factories, offices, and fleet | ||
| Total electricity consumed (MWh)8 | 885,385 | 899,706 | 959,723 | PMI factories and offices | ||
| Total electricity consumed that is from renewable sources (MWh) | 443,837 | 546,944 | 623,940 | PMI factories and offices | ||
| Proportion of electricity used and purchased that is from renewable sources | 50% | 61% | 65% | PMI factories, offices, and fleet | ||
| Proportion of electricity used and purchased that is from renewable sources | 0% | 53% | 65% | 72% | 100% by 2025 | PMI factories |
| CDP Climate Change rating | A | A | A | A |
1 We include warehouses in PMI offices
2 In 2019, we reviewed our carbon footprint model, taking into account more primary data from suppliers and updating our methodology, leading to more accurate figures for our scope 3 emissions. We have restated our 2017 and 2018 data according to the new model. Other figures that include scope 3 emissions have also been restated.
3 2019 figure includes carbon off-setting certificates purchased in our factory in Klaipėda (seepage143) and our Operations Center in Lausanne (see page 68).
4 From 2019 onwards, intensity is measured in CO{_2_}e per million shipped cigarettes equivalent. Our baseline and previous years’ data have been restated accordingly.
5 We report on our progress against our current science-based targets which align with a 2-degree scenario: we committed to achieve an absolute reduction of our scope1+2 emissions of 30% by 2020, 40% by 2030, and 60% by 2040; and to achieve an absolute reduction of our scope 1+2+3 emissions of 40% by 2030.
6 The 2018 figure has been adjusted due to an internal reporting error
7 From 2019 onwards, energy intensity is reported in gigajoules per million shipped cigarettes equivalent. Previous years’ data have been restated accordingly.
8 We have reviewed the calculation methodology for our electricity consumption to account for the electricity produced in our facilities and we have restated previous years’ data accordingly. Other figures that include electricity have also been restated.
Littering prevention¹
| 2019 | |
|---|---|
| Number of anti-littering initiatives conducted | 54 |
| Number of affiliates with anti-littering strategy developed | 31 |
| Number of affiliates participating in World Cleanup Day | 31 |
| Number of participants to World Cleanup Day (PMI employees and other volunteers) | 3,962 |
| Number of cigarette butts collected during World Cleanup Day | 827,160 |
1 These indicators were introduced in 2019
Product eco-design and circularity
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Recycling rate of IQOS devices (weighted average)1 | n/a | 45% | 61-79% | 80% by 2025 |
| Proportion of IQOS device sales volume covered by the CIRCLE program2 | n/a | 66% | 39% | 100% by 2025 |
| Carbon footprint of PMI smoke-free products per user (kgCO2e/year)3 | n/a | n/a | QOS 3.0: 43.5 IQOS 3 MULTI: 47.5 IQOS MESH: 21.5 | |
| Proportion of packaging material that is recyclable4 | 94.4% | 93.6% | 93.5% | 100% by 2025 |
| Proportion of packaging material that is renewable4 | 88.9% | 88.3% | 87.7% | 95% by 2025 |
| Reduction of packaging materials used versus 2018 baseline | n/a | n/a | 3% | 15% by 2020 |
1 We established our two recycling CIRCLE hubs in 2018. Recycling rate: Depending on device type and processing facility (figures provided for product processed through CIRCLE hubs, varied by device type, zero landfill, remainder to energy recovery or material loss).
2 WeestablishedourtworecyclingCIRCLEhubsin2018.WhileweexpandedthenumberofmarketscoveredbyCIRCLEin2019, the decrease in coverage of sales volume is explained by IQOS growth in markets not yet covered by the program.
3 Depends on device and assumes 20 heated tobacco units/day. Scope includes materials, manufacturing, use, and end-of-life, but excludes logistics.
4 While we continued our efforts to substitute or reduce the use of materials from non-renewable sources and non-recyclable materials in our packaging, the slightly decreasing trend in the past years is driven by the volume mix evolution over this period of time.
Forest protection
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Proportion of tobacco purchased cured at no risk of deforestation of old-growth forests1 | 94% | 90% | 97% | 100% by 2020 |
| Proportion of flue-cured tobacco purchased cured with renewable sources (self-sufficient firewood and biomass adoption) | 36% (29% + 7%) | 46% (33% + 13%) | 51% (36%+15% | 70% by 2020 |
| Approximate cumulative number of curing barns upgraded since 2014 | 57,000 | 76,000 | 80,800 | 80,000 by 2020 |
| CDP forest rating | n/a | B | A- | A |
1 The category “old-growth forests” includes both primary (untouched) forests and secondary high conservation value forests. Old-growth forests are living, functional ecosystems which need protection. We use our Monitoring and Verification Framework for Sustainable Curing Fuel to systematically monitor the sustainability of all fuel types used in our tobacco supply chain.
Water stewardship
| 2010 baseline | 2017 | 2018 | 2019 | Goal | Scope | |
|---|---|---|---|---|---|---|
| Total amount of water withdrawn (’000 m3) | 4,998 | 4,152 | 4,371 | 4,008 | PMI factories | |
| Total amount of water consumed (withdrawn minus discharged) (’000 m3) | 2,449 | 1,672 | 1,958 | 1,883 | PMI factories | |
| Water ratio (water withdrawn in m3 per million cigarettes equivalent)1 | 5.35 | 4.83 | 5.14 | 4.74 | 4.4 by 2020 3.1 by 2022 | PMI factories |
| Number of fines2 | 0 | 0 | 1 | PMI factories | ||
| Number of spills2 | 0 | 0 | 1 | PMI factories | ||
| Cumulative number of local water risk assessments performed | n/a | 8 | 15 | 22 by 2020 | Tobacco supply chain | |
| Quantity of water used per ton of tobacco produced (m3) | n/a | 266 | 330 | Tobacco supply chain | ||
| Total amount of water used (’000 m3) | n/a | 119,600 | 138,200 | Tobacco supply chain | ||
| CDP water rating | A | B | A | A |
1 From 2019 onwards, water intensity is measured in m3 per million cigarettes produced equivalent .Our base line and previous years’ data have been restated accordingly.
2 Last year in the waste water treatment plant in Yangsan Factory of Philip Morris Korea, some of the waste water was accidentally drained to rain water due to operational mistake of the contracted service provider. PMI informed the authorities, implemented preventive measures and paid the corresponding fine.
Biodiversity
| 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|
| Proportion of tobacco purchased without detection of residues attributable to the use of WHO Toxicity Class 1 crop protection agents1 | 99% | 100% | n/a | 100% by crop year 2018 |
| Proportion of tobacco purchased without detection of residues attributable to the use of HHPs, as defined by FAO and WHO guidelines in 20161 | 88% | 89% | n/a | 100% by crop year 2020 |
1 The 2019 crop season data were not available at the time of the publication of this report
Waste reduction¹
| 2010 baseline | 2017 | 2018 | 2019 | Goal | |
|---|---|---|---|---|---|
| Total amount of waste generated (metric tons) | 143,596 | 140,316 | 134,367 | 131,104 | |
| Proportion of total waste generated that is recycled | 79% | 81% | 84% | 84% | 85% |
| Proportion of total waste generated that is incinerated with energy recovery | 9% | 12% | 12% | 12% | |
| Proportion of total waste generated that is disposed to landfill | 6% | 4% | 4% | ||
| Proportion of total waste generated that is incinerated without energy recovery | <1% | <1% | <1% | ||
| Amount of hazardous waste generated (metric tons) | 1,357 | 1,423 | 1,486 | ||
| Proportion of hazardous waste generated that is recycled | 37% | 41% | 33% | ||
| Proportion of hazardous waste generated that is incinerated with energy recovery | 44% | 44% | 49% | ||
| Proportion of hazardous waste generated that is disposed to landfill | 9% | 6% | 8% | ||
| Proportion of hazardous waste generated that is incinerated without energy recovery | 10% | 9% | 10% |
1 The scope of waste data covers factory waste but excludes marketing and project waste
This online supplement to our integrated report should be read in conjunction with PMI’s Integrated Report 2019. The information and data presented in this online supplement cover the 2019 calendar year or reflect status at December 31, 2019, worldwide, unless otherwise indicated. Where not specified, data come from PMI estimates. See About this online supplement for more information. Aspirational targets and goals do not constitute financial projections, and achievement of future results is subject to risks, uncertainties and inaccurate assumptions, as outlined in our forward-looking and cautionary statements.
