BY EU STUDIO

Updated Friday, June 24, 2022-13:39

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The indicators indicate that we are walking, little by little, towards

a world without cigarettes

.

And Philip Morris International (PMI) committed to this goal in 2017, as stated in a letter from its Board of Directors announcing the company's "smoke-free vision".

The media significance of that declaration of intent reached international resonance.

Since then, the company has focused on that purpose, which is ratified and expanded in its 2022 Statement of Intent. "PMI remains faithful to its commitment to accelerating the end of cigarette consumption and with the conviction of

laying the foundations of a strong business in the areas of health and wellness

, striving to develop products that can have a net positive impact on society," the letter read.

But many will wonder

why this transformation is necessary

?

And in the words of Miguel Coleta, Director of Sustainability at PMI, he points out that everything evolves and that Philip Morris is no exception.

In addition, he adds that Philip Morris "is a company that currently markets a product that has a very large impact on health. And if we think from this point of view of sustainability, that impact is something that has to be worked on. Addressing the damage they cause our products is our great challenge and that is why we are transforming ourselves, not only to mitigate the damage caused by our products, but also

to have a positive impact on society

".

Philip Morris R&D Center in Switzerland.

But many will wonder

why this transformation is necessary

?

And in the words of Miguel Coleta, Director of Sustainability at PMI, he points out that everything evolves and that Philip Morris is no exception.

In addition, he adds that Philip Morris "is a company that currently markets a product that has a very large impact on health. And if we think from this point of view of sustainability, that impact is something that has to be worked on. Addressing the damage they cause our products is our great challenge and that is why we are transforming ourselves, not only to mitigate the damage caused by our products, but also

to have a positive impact on society

".

With this challenge, the company is aware that this transformation will not only depend on substituting one product for another, but also requires

the involvement of all the agents involved in its activity

: consumers, employees, supply chain, shareholders, regulators, community public health and civil society.

INTEGRATED REPORT 2021: BALANCE OF PAST, PRESENT AND FUTURE

To shed light on this great challenge, the company annually publishes the

Integrated Report

, which provides visibility and data on how progress is being made in this plan and, in addition, ensures control mechanisms so that achievements are tangible and measurable.

Because the change will only be real if the objectives that materialize and those that do not are verified

.

To arrive at this Sustainability Report, as Miguel Coleta points out, "you have to start with an analysis of materiality, like the one we did in 2021, and which allows us to see not only the impact we have on the world, but also the impact the world has on us.

For this reason, Philip Morris carried out a 'sustainability materiality assessment' where it analyzes the impact on the organization, among other factors, of the commitment to health, business integrity or respect for the climate.

Tobacco cultivation field.

The results of this evaluation have made it possible to identify and

prioritize new issues

related to environmental, social and good governance (ESG) criteria.

"We have redesigned our ESG framework to better show the issues on which we should prioritize our resources and focus. The framework recognizes two different forms of ESG issues: those related to our products (what we produce) and those related to our business operations (how we produce)," explains Jennifer Motles, Head of Sustainability at Philip Morris International.

This distinction forms the basis

of Philip Morris's new approach to sustainability, which consists of eight clear strategies: four of them aimed at addressing the impact of PMI's products - among which are: accelerating the end of cigarettes , increase the benefits of smokeless products, seek the positive impact on health and reduce post-consumer waste- and the other four, aimed at addressing the operational impact of the company -where they are: the promotion of an

inclusive work environment

,

improving the quality of life of employees in

the company's supply chain,

addressing climate change

and

nature conservation

.

Consequently, Philip Morris International's roadmap for 2025 has been renewed and now consists of 11 goals divided into those 8 strategies that clearly explain the social and environmental impacts that PMI intends to achieve.

REVISION OF THE ROADMAP FOR 2025

The report insists on the need to materialize the plans contemplated in its pages.

For this reason, the progress of the Roadmap is measured with

a set of 19 key indicators

that make up the PMI 'Sustainability Index', to show with total transparency how the company evaluates progress, making its progress quantifiable and verifiable. .

Among other aspects, it calibrates issues such as the rate of shipment of smokeless products or the percentage of net income they generate;

the annual net income from health and wellness products or the percentage of women in senior positions.

The report concludes that PMI, with the application of this global strategy, has achieved what

its net income from smokeless products now reaches 29.1% of the total

.

In addition, since 2008, it has accumulated an investment of more than 9,000 million dollars in this area.

OBJECTIVES OF THE NEW ROADMAP

In the words of Miguel Coleta, "we are making progress in our vision of a smoke-free world and thanks to this, we have acquired new skills,

nearly 1,000 scientists work with us

and this is allowing us to be able to enter the world of well-being and health with products that can have a positive impact.

Specifically, in 2021, PMI continued to enter the health and wellness sector with the purchase of Fertin Pharma, OtiTopic and Vectura.

This strategic investment is seen as a gateway to the goal of generating at least $1 billion in annual net revenue in this area by 2025.

"Looking at the long term,

we are expanding our business beyond tobacco and nicotine

, such as wellness and health care. Our ambition is that by 2025, at least $1 billion of our net income will be derived from these avenues. "

adjacent growth areas, marking an early milestone for a business that can grow much larger in the long term," said Jacek Olczak, CEO of Philip Morris International.

SUSTAINABILITY, A PRIORITY ISSUE

At Philip Morris International, sustainability is serious business: it's not just about minimizing the company's negative impact on the environment.

It is also seen as an opportunity to promote innovation, growth and the creation of long-term value.

"The largest and most pressing negative externality that our strategy seeks to address is the health impact of smoking. This is the most important contribution we can make to public health and is the cornerstone of PMI's business purpose and strategy" , recalls Jacek Olczak, CEO of the company.

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