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May 17, 2022
Philip Morris International Releases 2021 Integrated Report, Introducing New Sustainability Strategy and Sustainability Index
Report communicates progress toward achieving sustainability targets and gives stakeholders an update on the company’s transformation to accelerate the end of smoking.
“Sustainability and business performance are fully interrelated and mutually reinforcing. Our actions—grounded in data, science, and facts—speak louder than words. PMI is committed to serving as an agent of change and advocate of positive values. We understand that our business must become a provider of effective alternatives to continued smoking for adult smokers who don’t quit. To achieve this, we are positioning ourselves at the forefront of consumer-centricity, technology, science, and innovation. With an eye to the long term, we are also expanding our business into areas beyond tobacco and nicotine such as wellness and healthcare,” said
PMI has expanded its social, human, intellectual, and manufactured capital in ways that allow it to go a step further, shifting focus to its long-term goal from doing less harm to having a net positive impact on society. The changes to the company’s Statement of Purpose ensure it remains a current and fair representation of the company’s strategy, expanding the last horizon from achieving a smoke-free future to also encompassing PMI’s long-term strategic efforts to become a lifestyle, wellness, and healthcare company.
The company’s 2021 sustainability materiality assessment helped identify the ESG issues on which PMI should prioritize and focus its resources. PMI subsequently redesigned our ESG framework, recognizing two distinct topic areas: those related to PMI’s products and those related to its business operations. This distinction forms the basis of PMI’s new approach to sustainability, which consists of eight clear impact-driven strategies that aim to address its most material ESG topics. These eight strategies—four aimed to address the impact of PMI’s products and four aimed to address the company’s operational impact—are accompanied by a robust framework of nine governance-related factors.
PMI’s 2025 Roadmap was revamped accordingly, and it now consists of 11 goals directly linked to these eight strategies, clearly explaining the social and environmental impacts PMI aims to achieve. Further, to clearly assess progress toward achieving these goals, PMI introduced 19 concrete KPIs to transparently showcase how the company defines success and evaluates progress, making its improvement both measurable and verifiable. Altogether, these KPIs make up the company’s new Sustainability Index, which explicitly links 30% of the company’s long-term compensation program to ESG performance.
In its 2021 Integrated Report and aligned with its new strategy, PMI organized its description of progress into two categories: the impact of its products and the impact of its operations. Highlights include the following:
21.7 million* total adult users of PMI’s smoke-free products as of
December 31, 2021, of whom 15.3 million* have switched and stopped smoking; up from 18.3 million* and 13.0 million*, respectively, in 2020.
- 29.1%* of adjusted net revenues derived from smoke-free products, which were available for sale in 71 markets worldwide by year end; up from 23.8%* and 64, respectively, in 2020.
99% of adjusted R&D expenditure on smoke-free products totaling
USD 566 million, consistent in proportion but 14% higher in dollar terms than the USD 495 millionspent in 2020.
- 86% recycling rate of IQOS devices returned to our centralized recycling hubs, weighted-average percentage of each device that is recycled, vs. 84% in 2020.
- 39.7% of management positions held by women, on track to achieve 2022 target of 40%.
- Five human rights impact assessments conducted since 2018 in highest-risk countries and action plans being implemented, up from four in 2020.
- 67% of contracted farmers supplying tobacco to PMI who make a living income, up from 48% in 2020.
- Reduced total value chain CO2e emissions (scope 1+2+3) by 18% and emissions from direct operations (scope 1+2) by 33% vs. 2019 baseline.
- 100% of tobacco purchased at no risk of deforestation of primary and protected forests.
“Our 2021 Integrated Report aims to address demands for more robust, comparable, and reliable
information on our ESG risks and performance, including data related to our company’s transformation, offering our stakeholders visibility into the future we are working toward,” said Jennifer Motles, Chief Sustainability Officer at PMI. “2021 was a year full of achievements, but challenges remain. As we continue to transform, learn, and discover better ways to develop solutions that have meaningful impact, we hope our transparency and willingness to engage will spark dialogue with those who can help accelerate the pace of change.”
The preparation of the 2021 Integrated Report considers guidance of international standards and frameworks, including: the
*Figures presented for 2021 and 2020 include
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 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
In addition, PMI’s business risks also include risks and uncertainties related to PMI’s acquisitions of
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
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