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October 27, 2021
Philip Morris International Accelerates Path to Carbon Neutrality
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
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
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
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
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
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