PMI reports 2019 ESG performance in its first integrated report

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PHILIP  Morris International Inc. today published its first Integrated Report, a comprehensive overview of the company’s environmental, social, and overnance, ESG, performance and its progress toward delivering a smoke-free future—including the company’s ambition to switch more than 40 million adult smokers to its smoke-free products by 2025, with half of the total to come from non-OECD countries.

PMI’s Integrated Report 2019 demonstrates the role of the organization’s strategy,

governance, and performance in the creation of value over the short, medium, and

long terms. Further, the report shows PMI’s approach and important progress in

various ESG areas, while setting new and ambitious targets for 2025 that complement

the company’s prior aspirations.

The Integrated Report also highlights the company’s most material sustainability

topics, including the health impacts of the company’s products, an aspect often not

captured by external ESG assessments.

The report focuses on this key area, and describes how the company is working to

reduce the harm caused by tobacco use by replacing combustible products with

scientifically substantiated reduced-risk alternatives.

PMI’s evolution from sustainability reporting to integrated reporting helps investors

make the connection between our product-focused sustainability initiatives, which

form the core of ourESG strategy, and our financial performance over time.

The report also enables the company’s stakeholders to better evaluate the

company’s progress in achieving its purpose. PMI’s Statement of Purpose, adopted

by the company’s Board of Directors earlier this year and published in its 2020

proxy statement, is also available in the Integrated Report.

“Clarity of purpose is essential for the internal alignment of any company. Since we

announced our smoke-free commitment in 2016, we have made enormous progress

in terms of organizational capabilities, the integration of sustainability into every

aspect of our transformation, and our business,” said André Calantzopoulos, Chief

Executive Officer, PMI. “PMI’s Statement of Purpose reaffirms our commitment to

deliver a smoke-free future for the

benefit of people who would otherwise continue to smoke and, hence, to global public

health. It is clear to all of us at PMI that the biggest positive impact our company can

have on society is to replace cigarettes with less harmful alternatives; this is at the

very core of our corporate strategy and sits atop our sustainability priorities while

we are progressing well on all others.”

 

The Integrated Report 2019 demonstrates how PMI is focusing its resources on developing,

scientifically substantiating, and responsibly commercializing smoke-free products that are a

better choice than continued smoking, with the aim of completely replacing cigarettes as soon as

possible. The company believes that, with the right regulatory encouragement and support from

civil society, cigarette sales can end within 10 to 15 years in many countries.

In 2016, PMI introduced a set of Key Performance Indicators (KPIs), referred to as Business

Transformation Metrics, to transparently measure and verify its progress toward a world without

cigarettes. In 2019, we continued to expand this set of metrics.

Highlights from our 2019 performance across these metrics include:

  • PMI continued to shift significant resources toward delivering a smoke-free future, with 98

percent of total R&D expenditure and 71 percent of total commercial expenditure directed

toward smoke-free products in 2019.

  • PMI’s smoke-free product net revenues reached 18.7 percent of total net revenues in 2019,

compared to 2.7 percent in 2016; by 2025 the company aspires to have 38 to 42 percent of

total net revenues coming from smoke-free products. In 2019, net revenues from smoke-free

products already exceeded 50 percent of total net revenues in four markets.

  • PMI’s smoke-free product shipment volume increased to approximately 60 billion units, up

from 7.7 billion in 2016 with an aspiration of more than 250 billion units by 2025. PMI’s

combustible product shipment volume in 2019 declined to 732 billion units, down from 845

billion in 2016, partly reflecting the impact of adult smokers switching to our smoke-free

products.

  • Since announcing our smoke-free vision in 2016, PMI has delisted over 600 cigarette SKUs

globally, while significantly broadening our portfolio of heated tobacco units, to over 400

SKUs.

  • At year-end 2019, there were an estimated 9.7 million users worldwide who have stopped

smoking and switched to PMI’s heat-not-burn smoke-free product IQOS, compared to 6.6

million in 2018. PMI’s vision of a smoke-free future is a global and inclusive one, aiming to

provide access to better alternatives to all smokers around the world. Approximately half of

PMI’s global cigarette sales volume is in non-OECD countries. We therefore aspire that over

20 million smokers in non-OECD countries switch to our smoke-free products by 2025, half

of our global aspiration of over 40 million users by that time.

ESG highlights from the Integrated Report 2019 include:

  • In 2019, PMI conducted a comprehensive and critical review of the company’s commercial

activities related to product marketing and sales activities. The study’s findings were

published in December 2019 in a report, Responsible Marketing Practices, on PMI.com. By

the end of 2020, PMI aims for youth access prevention (YAP) programs to be in place in

markets representing over 90 percent of PMI’s total shipment volume; by 2023, PMI aims to

have 100 percent of PMI’s portfolio of electronic smoke-free devices equipped with age-

verification technology.

 

  • In 2019, PMI continued to assess and mitigate environmental risks and impacts across its

value chain including a 42 percent absolute reduction of CO2e scope 1+2+3 compared to its

2010 baseline; 72 percent of electricity used and purchased within PMI factories was from

renewable sources; PMI has committed to achieving carbon neutrality in its direct operations

(scope 1+2) by 2030 and across the company’s entire value chain (scope 1+2+3) by 2050.

  • PMI continued to focus on the well-being of its tobacco farming communities: In 2019 we did

not find any incidents of child labor in over 99 percent of the more than 300,000 tobacco

farms monitored. The company aims by 2025 to have zero child labor in its tobacco supply

chain, including by ensuring that 100 percent of contracted tobacco farmers make a living

income.

Huub Savelkouls, Chief Sustainability Officer, said: “Our Integrated Report aims to provide a

comprehensive overview of what PMI is about, combined with a holistic set of metrics that go

beyond our financial disclosures, covering our business transformation, as well as environmental,

social, and governance topics. We support and seek to align with GRI, SASB, and TCFD

disclosure standards, enabling all stakeholders to benchmark our strategy and performance.”

Download the full Integrated Report 2019 at PMI.com/IntegratedReport2019. Additional

information on the company’s sustainable actions, aspirational targets, and commitments are

available on PMI.com/Sustainability.

Aspirational targets and goals do not constitute financial projections, and achievement of future

results are subject to risks, uncertainties, and inaccurate assumptions, as outlined in the forward-

looking and cautionary statements on page 189 of the Integrated Report 2019. Key terms,

definitions, and explanatory notes are set forth in the Integrated Report 2019. In the 2019

Integrated Report and in related communications, the term “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.

 

 

 

Philip Morris International: Delivering a Smoke-Free Future

Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a

smoke-free future and ultimately replace cigarettes with smoke-free products to the benefit of

adults who would otherwise continue to smoke, society, the company, and its shareholders. PMI

is a leading international tobacco company engaged in the manufacture and sale of cigarettes, as

well as smoke-free products and associated electronic devices and accessories, and other

nicotine-containing products in markets outside the United States. In addition, PMI ships a

version of its IQOS Platform 1 device and its consumables authorized by the U.S. Food and Drug

Administration to Altria Group, Inc. for sale in the U.S. under license. PMI is building a future

on a new category of smoke-free products that, while not risk-free, are a much better choice than

continuing to smoke. Through multidisciplinary capabilities in product development, state-of-

the-art facilities, and scientific substantiation, PMI aims to ensure that its smoke-free products

meet adult consumer preferences and rigorous regulatory requirements. PMI’s smoke-free IQOS

product portfolio includes heat-not-burn and nicotine-containing vapor products. As of March

31, 2020, PMI estimates that approximately 10.6 million adult smokers around the world have

 

already stopped smoking and switched to PMI’s heat-not-burn product, available for sale in 53

markets in key cities or nationwide under the IQOS brand. For more information, please visit

http://www.pmi.com

 

 

 

 

NGO calls on Ghana police to investigate nude picture circulating on social media

 

THE Child Rights International, CRI, a Non-Governmental Organisation, NGO, based in Ghana has

called on the police authority in the country to investigate a nude picture involving Rosemond

Brown, popularly called Akuapem Poloo, and a child circulating on social media.

The group in a petition to the director-general of the Ghana Police Service in Accra noted that the

picture violates the rights of the child to privacy and dignity.

“Our attention has been drawn to a nude picture involving a certain Miss Rosemond Brown,

popularly known as Akuapem Poloo and a child circulating on social media.

“As a child rights organization that believes in upholding the rights of children, we deem this act

as a violation of the Welfare Principle of the Children’s Act and abuse of the child’s rights to privacy

and dignity. We wish to notify your esteemed office to investigate the taking of the said images and

its circulation,” it said.

The Child Rights International, CRI, is a non-governmental organisation with the aim of upholding

the fundamental human rights of children irrespective of their religion, status, geographical location,

colour, and ethnicity.

– July 01, 2020 @ 17:15 GMT

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