To better understand how the sum of our actions as a company impacts forests, we further consolidated our approach to deforestation in 2020. We integrated it deeper into our overall climate protection strategy, creating a nexus between our efforts to protect the global climate, forests, and biodiversity. You can read more about our strategies on climate protection and biodiversity. We strengthened existing efforts in areas where we were already advanced—such as using spatial data to determine risk levels and plan for mitigation action—and expanded our focus on areas outside of our tobacco supply chain. This included creating synergies by better aligning our Leaf and Procurement functions—for instance, by designing and implementing shared criteria and measurements on forest protection such as a harmonized database of protected areas by the International Union for Conservation of Nature (IUCN).
Updating our Zero Deforestation Manifesto
PMI’s Zero Deforestation Manifesto commits us to eliminating deforestation within our supply chain. In 2020, we updated our Manifesto to reflect the public’s increased expectations and scrutiny of the private sector. The manifesto now includes a no-conversion policy for natural non-forest ecosystems (for example, peatland, savannah, and wetland) and the mandatory application of Free Prior Informed Consent (FPIC) when deciding on transformation projects that have an impact on local communities. Traceability requirements for medium- to high-risk forested areas now extend to the forest management unit, and we have aligned our forest-related definitions with those of the Accountability Framework initiative.
Throughout 2020, we engaged with our suppliers and external third parties, receiving valuable input from both civil society and companies operating in the forestry sector. Alongside the update, we produced implementation guidelines for our suppliers. Both documents were published in early 2021.
In this chapter
- Updating our Zero Deforestation Manifesto
- Improving our risk assessment
- Protecting forests in our tobacco supply chain
- Deforestation risks in pulp, paper, and other supply chains
- Next steps
Protecting forests in our tobacco supply chain
Our annual risk assessments are moving us closer to our goal of being forest positive by 2025. Our efforts center on two strategies: We are increasing the use of traceable, sustainably sourced curing fuels and promoting the planting of “live barns” in Malawi and Mozambique.
In 2020, we achieved our target of 100 percent of flue-cured tobacco purchased without risk of deforestation of old-growth forest (2019: 97 percent). Our success was due to focused interventions in geographies where we still faced this risk, including Argentina and Pakistan. Our revised—and expanded—goal is zero net deforestation of natural managed forests by 2025.
Performance highlights
Deforestation risks in pulp, paper, and other supply chains
We regularly assess PMI’s exposure to deforestation risk in our non-tobacco supply chains and engage with individual suppliers across the entire supply base. This allows us to refine our approach to biomass sourcing, raw materials traceability, certification and verification, and the use of recycled materials. We are investing in extensive supplier engagement- and capacity-building activities, which will be critical to successfully deploying our strategies.
In 2020, we updated our risk assessment for our board and paper supply chain with sustainability-related information and data for each supplier, using publicly available sources. We also updated our country assessment methodology and, after a detailed analysis, determined that the National Risk Assessments from the Forest Stewardship Council offer the most reliable data and other information with which to assess country-of-origin risk.
To achieve our zero deforestation goal, we increased our traceability requirements in 2020. We now require that suppliers submit more specific data, as well as information regarding the origin of materials used. The additional data helped us develop an improved methodology to assess our position versus our targets. This methodology will be validated in collaboration with our third-party consultant, South Pole.
We have shared our Responsible Sourcing Principles with all paper and pulp-based materials suppliers and are currently onboarding significant suppliers to our STEP supplier due diligence platform. Through our risk-based approach, we are making progress toward 100 percent transparency on supplier practices.
As we strengthen our approach to managing deforestation risks, we are expanding and intensifying our engagement processes. Further, we are implementing longer-term collaboration programs with suppliers of all key raw materials, such as board, paper, and acetate tow.
Next steps
Within the framework of our environmental strategy, we aim to maximize our positive impact by promoting projects in line with our Zero Deforestation Manifesto and Commitments. In particular, nature-based solutions (NBS) provide the right conditions for aligning with our zero net target and—where conditions allow—achieving forest-positive conditions.
In 2020, we started to pilot the accounting for positive impact in three select markets (Brazil, Mozambique, and the Philippines) where we know that proactive forest stewardship is of great importance. For 2021, we want to progress further in the approach by piloting full implementation of NBS following criteria and progress tracking from recognized stakeholders operating in the space of environmental accounting inventories.
We will also enhance monitoring of our zero net deforestation ambitions, leveraging our existing and well-functioning renewable curing fuels monitoring framework. To leverage synergies and increase efficiency, we are examining a shared spatial deforestation risk assessment approach for Leaf and Procurement sustainability to further align data reporting and prioritization.
For our board and paper supply chains, we will continue to strengthen our zero deforestation risk monitoring framework by asking suppliers for more granular traceability information (going beyond the country level) to ensure wood does not come from risk areas and for information about monitoring systems and third-party verification already in place.
This online content about our Integrated Report should be read in conjunction with PMI’s 2020 Integrated Report. The information and data presented here cover the 2020 calendar year or reflect status at December 31, 2020, worldwide, unless otherwise indicated. Where not specified, data come from PMI estimates. Please also refer to 'About this report' on page 3 of the 2020 Integrated Report 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 145. In the 2020 Integrated Report 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.
Other topics in this strategic pillar
Biodiversity - Progress 2020
We continued to support biodiversity initiatives that help conserve and restore the natural ecosystems around the tobacco farms from which we source.
Water stewardship - Progress 2020
Drawing on the experience and knowledge acquired through our risk assessments, we focused on developing guidance for applying a landscape approach to water optimization projects.