Responsible engagement

18 May 2021
PMI regards stakeholder engagement as fundamental to the creation of shared and sustainable value.
The Cube, PMI’s research and development facility in Neuchâtel, Switzerland.

We regularly interact with governmental bodies, and we work with a wide range of governmental and nongovernmental stakeholders on issues on which we have a legitimate interest or concern. In doing so, we seek to consider not just our views but also those of society when formulating our positions. 

Companies engage with the legislative and regulatory process for different reasons. Engagements may seek to improve the overall economic and/or social environment, create new business opportunities, and improve the regulatory landscape. This process, when handled with transparency and accountability, can result in regulations that address a relevant public issue, are well designed for their purpose, and create an environment where business and societies can prosper.

Topic description

For PMI, responsible advocacy is about conducting engagement in a way that respects the law, observes professional standards and ethical principles, and is consistent with the company’s vision and internal policies. This means acting in a fair, honest, and respectful manner when advocating our position with external stakeholders.

Responsible engagement is a tier 2 topic within our strategic pillar Operating with excellence.


The right thing to do

Society expects openness in policymaking and transparency from all participants on financial or other support provided to industry associations, trade groups, and political parties and their representatives. A sound framework for transparency in advocacy is therefore crucial to safeguarding the integrity of the public decision-making process. An organization’s participation in such processes, directly or through industry associations, must be transparent and consistent with its established public positions on the areas of public policy in question.

The business case

To PMI, the business case for advocacy and stakeholder engagement goes beyond the social license to operate. It focuses on finding solutions to current and future global challenges, raising awareness, and working hand-in-hand with stakeholder groups while making a significant positive societal impact. Stakeholder engagement is a crucial part of our strategy and it also underpins our external advocacy and joint work with governments and civil society to achieve transformational change—that is, fundamental changes to whole systems, not simply incremental improvements.

Advocating our positions responsibly is important, since the legislative, regulatory, and political landscapes may impact our ability to operate as well as the interests of other relevant segments of society. These landscapes are shaped by the advocacy efforts of multiple types of stakeholder, including those of other businesses, and civil society. A process of advocacy has the potential to create trust or erode it. Advocating responsibly carries advantages for dialogue and partnership building, supports risk and reputation management, and improves our business in the long run.

Achieving our aims

In all cases, our advocacy work is expected to respect applicable laws and professional standards and align with our company’s vision, ethical values, and principles, in particular our Code of Conduct, our External Communications and Engagement, and our anti-bribery policies. To this end, we train our employees, and third parties acting on our behalf, on those policies and compliance standards; we provide resources for our employees to speak up, ask questions, share ideas, or report concerns; we investigate and act on reports of suspected compliance issues; and we regularly evaluate progress and identify areas of risk and improvement. Our Code of Conduct and an overview of our engagement principles are available on our website. 

Our regular sustainability materiality assessments help us to understand which issues are important to the business and our stakeholders, and therefore where and how to focus our engagement. By defining the needs and interests of our stakeholders, we can also evolve our strategy to better meet their expectations and focus our reporting on the issues they care about.

We seek to understand the issues of concern and to respond openly and transparently to any questions raised about our products and the way we run our business.

The success of our business, especially as we continue to work toward a smoke-free future, depends largely on our ability to interact with others, including government officials, in a manner consistent with our ethical values, policies, and all applicable laws, avoiding interactions that might be perceived as having an illegitimate, improper, or corrupt intent. Hence, PMI has strict anti-corruption policies and processes, which unequivocally set the principles on how to lobby responsibly and with due respect for reporting and registration requirements. In this regard, PMI defines lobbying as direct or indirect communications with government officials to influence policies, laws, programs, positions, or policy-related actions or other official acts.

Many countries and their subdivisions have laws relating to lobbying activities as a way to promote transparency in the policymaking process and/or to regulate outside influence. PMI is committed to ensuring that all lobbying activities undertaken on behalf of the company are conducted in accordance with our standards and comply with applicable laws, including registration and reporting requirements. Any employee who may be engaged in lobbying activities—or oversees the work of third parties who may be engaged in lobbying activities—must comply with all applicable requirements.

To ensure transparency in all we do, we use our website to provide clarity on our views regarding public health and other central policy issues. There we also disclose our lobbying reports in the EU and the U.S., and our social contributions, as well as the limited political contributions we make. Our website also provides the list of business and trade associations in which PMI held a leadership role by serving on the Board of Directors or Executive Committee of that organization, along with the top 10 memberships paid. We belong to carefully selected business and trade associations around the world. We work with these groups because they represent our industry and the larger business community in policy discussions on issues where we have a common interest or objective. 

Advocacy must be consistent with our values and business strategy. In this regard, our goal is also to ensure a responsible approach to our political engagement activities following international best practices, standards and principles, such as the ones developed by the Organisation for Economic Co-operation and Development (OECD) in the Guidelines for multinational enterprises and the Principles for Transparency and Integrity in Lobbying.

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.

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