Improve the quality of life of people in our supply chain| PMI - Philip Morris International

Improve the quality of life of people in our supply chain

Our supply chain connects us with millions of people, from the farmers cultivating tobacco and other agricultural products to workers at the supplier companies that provide the products and services used in our products or necessary to run our business.

Purposefully phase out cigarettes

Purposefully phase out cigarettes
Maximize the benefits of smoke-free products

Maximize the benefits of smoke-free products
Seek net positive impact in wellness and healthcare

Seek net positive impact in wellness and healthcare
Reduce post-consumer waste

Reduce post-consumer waste
Foster an empowered and inclusive workplace

Foster an empowered and inclusive workplace
Improve the quality of life of people in our supply chain

Improve the quality of life of people in our supply chain
Tackle climate change

Tackle climate change
Preserve nature

Preserve nature

Improve roadmap goals

Our 2025 Roadmap goals

see our full 2025 roadmap

IMPROVE THE QUALITY OF LIFE OF PEOPLE IN OUR SUPPLY CHAIN

Eradicate systemic child labor in our tobacco supply chain.

Ensure all contracted tobacco farmers make a living income, and partner with our direct suppliers to promote a living wage for their workers.

Key performance indicators to track our progress

fundamentals background

See full performance metrics

Learn more about PMI’s Sustainability Index in our Integrated Report 2022. See the full performance metrics and related footnotes here.

The right thing to do

Promoting and adhering to sustainable business practices helps safeguard human rights, improve labor conditions, protect workers’ health and safety, tackle social inequalities, and contribute toward alleviating poverty.

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The right thing to do

Promoting and adhering to sustainable business practices helps safeguard human rights, improve labor conditions, protect workers’ health and safety, tackle social inequalities, and contribute toward alleviating poverty.

Agricultural supply chains face specific sustainability and human rights challenges. The tobacco we source is cultivated in many regions of the world, including low- and middle-income countries, where it is typically grown on smallholder farms. The socioeconomic well-being of farmers and their families depends on many factors, including the nation’s health and educational services, political stability, resilience to extreme weather events and conditions, access to markets, and public infrastructure. Our supply chain activities and investments extend beyond our direct effect on farmers, impacting people’s assets, capabilities, opportunities, and standards of living.

The business case

Caring for the quality of life of the people in our supply chain is a major contributor to building preparedness, resilience, and overall long-term success.

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The business case

As our business transforms, our supply chain evolves as well. Caring for the quality of life of the people in our supply chain is a major contributor to building preparedness, resilience, and overall long-term success. Prioritizing our agricultural supply chain allows us to focus on a critical component of our business that is vulnerable to poverty and human rights abuses. This includes working with farmers who make a decent living from growing tobacco, other crops, or other income-generating activity, which improves their livelihood and limits our potential exposure to child labor, forced labor and other labor-related violations, import bans, and reputational damage. We anticipate that the time, energy, and resources we have invested in developing, implementing, and monitoring the implementation of our Agricultural Labor Practices program will provide the insights needed to ensure similar standards are met throughout the rest of our supply chain as we continue on our transformation journey.

Improve roadmap goals

Our progress in 2022

Read more in our Integrated Report

ALP anniversary landing page thumbnail farmer Mexico

Social sustainability: Agricultural labor practices

Heated tobacco product factory

Conducting an end-to-end human rights impact assessment in Malaysia

Supply chain landscape

Managing our supply chain sustainably

Preventing child labor in tobacco-growing communities

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Argentina tobacco farmer thumbnail

Advancing income levels of farmers and farmworkers in Argentina

Human rights thumbnail

Respect human rights

Focus on: Human Rights

Focus on: Human Rights

Human Rights Report

Human Rights Commitment

Agricultural Labor Practices Code

Good Agricultural Practices (GAP)

Responsible Sourcing Principles

ALP 10 year anniversary report

ALP Step Change Guiding Principles

ESG KPI protocol 2022

Proud of the progress we have achieved in our tobacco supply chain, we will continue to expand and develop a social sustainability strategy that is able to respond to our transforming supply chain addressing impacts present in the rest of our value chain,increasing transparency, and ensuring robust data reporting. We are aware that this will require strong engagement with our suppliers, with our business partners, with others in the private sector as well as strong collaboration with specialized organizations, academics, and governments.

Noting the change in methodology related to implementation and further monitoring of our ALP requirements, during 2023 we plan to publish a dedicated disclosure detailing rationale behind the change in our approach. The report will share details related to our desired impact, challenges, and actions that we will take in order to mitigate potential unintended consequences derived from reporting data which relates only to that tobacco we end up purchasing, instead of the total contracted farm base.

As our company transforms and welcomes Swedish Match organization, we will work to integrate its supply chain to find synergies that may result in changes to sourcing supply. We will, accordingly, assess social and potential social impacts and adjust our strategy as needed.

Scott Coutts, Senior Vice President, Operations

We remain committed to provide a living income in our tobacco supply chain. To support our ambition, we plan to take a number of steps to make our data more robust, reliable, and meaningful. For example, we expect to undertake living income benchmarks in higher-income countries, including South Africa and Switzerland, and update 2022 benchmarks in other countries, in the coming years. We’ll also implement a new methodology to analyze farmers’ income at a more granular level with the support of our suppliers. We plan to report progress based on this updated methodology in next year’s Integrated Report. We will also implement our new farm-level monitoring guidelines, seeking to take a more proactive approach to detecting potential issues at an early stage.

Pedro Braga, Vice President Global Technical Operations

In 2023, we will further leverage our partnership with the Responsible Business Alliance (RBA) and the tools and resources it provides to foster improvement in social conditions in our electronics supply chain. In particular, we will continue building our internal capability and that of our suppliers to be better equipped to monitor and address identified issues. We will also pilot relevant initiatives, such as the RBA Workers’ Voice as well as the Responsible Factory Initiative (RFI), which assists suppliers to gain further insights and improve their sustainability journey. Depending on the outcome and the learnings acquired, we will explore the possibility of expanding such initiatives to our broader supplier base. In parallel, we will enhance our participation in working groups hosted by RBA and the Responsible Minerals Initiative (RMI) to expand our knowledge and gain insights into human rights trends in the electronics supply chain as well as share good practices.

Hafed Belhadj, Chief Procurement Officer

Building on a solid foundation established over the past decade, we will continue strengthening our policies, processes, and programs to address social issues and create a positive change across our value chain. We will continue working on respecting human rights within our organization and across our value chain, taking a systematic approach following the United Nations Guiding Principles on Business and Human Rights. Beyond our tobacco supply chain, we will enhance our efforts and expand our strategy and focus into our electronics supply chain, by further leveraging our Responsible Business Alliance membership.

Mimi Kurniawan, Vice President Operations Sustainability

This online content about our Integrated Report should be read in conjunction with PMI’s Integrated Report 2022. Unless otherwise indicated, the data contained herein cover our operations worldwide for the full calendar year 2022 or reflect the status as of December 31, 2022. Where not specified, data comes from PMI financials, non-financials, or estimates. Unless explicitly stated, the data, information, and aspirations referenced do not incorporate PMI’s Vectura Fertin Pharma business (consolidating the 2021 acquisitions of wellness and healthcare companies Fertin Pharma A/S, Vectura Group plc., and OtiTopic, Inc.), nor the late 2022 acquisition of Swedish Match AB. Please also refer to 'This report at a glance' on page 2 of the Integrated Report 2022 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 214. In the Integrated Report 2022 and in related communications, the terms “materiality,” “material,” and similar terms, when used in the context of economic, environmental, and social topics, 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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