How our climate strategy adds business value
Developing and implementing a robust climate strategy creates significant business value by strengthening resilience and unlocking opportunities. Taking a proactive approach ensures readiness for future regulatory changes and reinforces our position as an industry leader.
Mitigating climate risk is important, as physical and transition risks—from extreme weather events to carbon pricing—can disrupt operations and supply chains. By putting comprehensive mitigation and adaptation strategies in place, we can better anticipate challenges, minimize disruptions, and protect stakeholder trust.
Our climate strategy drives efficiency and innovation beyond compliance and risk reduction. By working towards improving energy optimization, resource efficiency, and investing in low‑carbon technologies and carbon markets, we can strengthen business resilience, reduce costs, and create opportunities for value in a volatile environment.
A well‑executed climate strategy is a catalyst for long‑term growth for PMI. It also supports climate‑vulnerable stakeholders in our supply chain, such as smallholder farmers and business partners.
Why is ‘Climate’ a strategic priority?
Strategic approach
Our climate strategy is designed to address climate-related risks, build resilience, and seize opportunities for a low-carbon future. We use robust greenhouse gas (GHG) accounting, clear governance, and tools like internal carbon pricing to guide mitigation and adaptation along our value chain.
In line with the Paris Agreement, our science-based roadmap—validated by the Science Based Targets initiative—features our near-term 2030 absolute GHG emissions reduction targets and our long-term 2040 commitment to net-zero emissions, both aligned with a 1.5°C global warming scenario. To extend our impact, we ask suppliers to set science-based targets as well.
We work closely with global climate coalitions and local business associations to drive climate progress across regions.
Decarbonization
We focus on cutting GHG emissions where we have direct control and significant emission-reduction potential. Decarbonization levers turn our Climate Transition Plan into measurable action.
In our direct operations (scope 1+2), we’re driving down GHG emissions through energy efficiency, shifting to renewable energies, and investing in low-carbon fleets. Because we rely on agriculture for many of the most relevant materials used in our products, we focus on reducing land-related emissions in our tobacco supply chain and other agricultural materials. We also collaborate closely with suppliers to embed sustainable practices, work to integrate environmental considerations into our product design, and strive to optimize our logistics.
Resilience
Our integrated strategy integrates mitigation and adaptation to safeguard our operations and supply chain in a changing climate context. As outlined in our Climate Transition Plan, reducing emissions isn’t enough; we’re evolving toward a more holistic model that embeds systemic adaption measures. Mitigation remains a central pillar to reduce transition risk exposure, affecting both our operations and our upstream and downstream value chain.
Most physical climate risks are in the supply chain, so adaptation initiatives, partnerships, community programs, and nature-based solutions are vital. These efforts reinforce our long-term path toward a low-carbon and climate-resilient future.
Adaptation
Climate hazards such as floods, droughts, and heatwaves threaten our sites and supply chains. We invest in site-specific adaptation planning to keep our operations resilient, protect people and assets, and ensure supply continuity.
Our approach rests on three pillars:
- Risk-based planning: Particularly through our Climate Change Risks and Opportunities (CCRO) assessment we identify high-risk locations and adaptation priorities.
- Targeted adaptation measures: We tailor site-level actions in high-risk areas—such as flood defenses, water efficiency, heat-resilient infrastructure, energy backup, and climate risk training. In our wider value chain, we promote climate-smart agriculture, improve water stewardship, and train farmers.
- Monitoring and evaluation: We continuously monitor the effectiveness of our measures and reassess physical climate risks, refining our approach as new challenges emerge.
Shadow carbon price
Our shadow carbon price, set at USD 105 per ton of CO₂ in 2023 and reconfirmed in 2025, is woven into capital planning. Benchmarked globally and reviewed every two years, this price keeps us ready for market and regulatory shifts, strengthens long-term value, and manages climate-related risks.
However, with oral nicotine products in our product portfolio, this means our plastic footprint for packaging is growing, since these use rigid, single-use propylene cans that present greater sustainability challenges than our usual fiber-based packaging.
Our policies
We complement these publicly available documents with additional internal policies, including our internal Global Vehicle Fleet policy which frames our fleet strategy.
2030+ aspirations
Mitigation
- 50 percent reduction in absolute scope 1+2 GHG emissions versus 2019 baseline (SBT) by 2030.
- 33.3 percent reduction in absolute scope 3 FLAG GHG emissions versus 2019 baseline (SBT) by 2030.
- 27.5 percent reduction in absolute scope 3 industrial GHG emissions versus 2019 baseline (SBT) by 2030.
- 72 percent reduction in absolute scope 3 FLAG GHG emissions versus 2019 baseline (SBT) by 2040.
- 90 percent reduction in absolute scope 1+2+3 GHG emissions versus 2019 baseline (SBT) by 2040.
- Net zero GHG emissions in our value chain (scope 1+2+3) (SBT) by 2040.
Adaptation
- 100 percent of climate change vulnerable operations locations covered by an adaptation plan by 2030.*
- 100 percent of climate change vulnerable key tobacco sourcing locations covered by adaptation plan by 2030.*
Resilience
15 percent of total electricity consumption in own manufacturing operations self-generated by 2030.*
* We will begin reporting performance towards newly established targets in our next annual Value Report and will provide methodological details in our [Non-financial KPI hub].
This online content about our Value Report should be read in conjunction with PMI’s Value Report 2025. This report includes metrics that are subject to uncertainties due to inherent limitations in the nature and methods for data collection and measurement. The precision of different collection and measurement techniques may also vary. This report includes data or information obtained from external sources or third parties. Unless otherwise indicated, the data contained herein cover our operations worldwide for the full calendar year 2025 or reflect the status as of December 31, 2025. Where not specified, data comes from PMI financials, nonfinancials, or estimates.
Unless explicitly stated, the data, information, and aspirations in this report do not incorporate PMI’s Wellness unit, Aspeya. Regarding the Swedish Match acquisition, completed late 2022, unless otherwise indicated, this report includes information pertaining to its sustainability performance. Please also refer to "About this report" on page 3 of the PMI’s Value Report 2025 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 on page 142. In PMI’s Value Report 2025 and in related communications, the terms “materiality,” “material,” and similar terms are defined in the referenced sustainability standards and are not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures required by the U.S. Securities and Exchange Commission.
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