Philip Morris International (PMI) is a multinational cigarette and tobacco manufacturing company in America. At the end of June, PMI published its first integrated report, a general overview of its environmental, social and governance (ESG) performance. This report has also shown the progress toward delivering a smoke-free future. The company aims to promote its smoke-free products and attracts about 40 million adult consumers by 2025. Nearly half of the total consumption of PMI's smoke-free products have come from non-OECD countries.
Andre Calantzopoulos, CEO of PMI, said:
"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."
PMI focus on innovation for better products to reduce adverse health impacts, according to the report:
"We recognize that cigarette smoking causes serious diseases and that the best way to avoid the harms of smoking is never to start or to quit. Nevertheless, for adult smokers who would otherwise continue to smoke, we believe that product innovation has a significant potential to benefit public health."
Moreover, the report shows that 98% of the total R&D expenditure and 71% of total commercial spending spent on smoke-free products in 2019.
PMI's net revenues of smoke-free products increased and reached 18.7% of total net revenues in 2019, while only 2.7 percent in 2016. In 2019, net revenues from smoke-free products accounted for more than half of the total net revenues in four markets.
The shipment volume of PMI's smoke-free products rapidly increased to about 60 billion units in 2019, and 7.7 billion in 2016. The traditional tobacco products shipment volume is 845 billion in 2016 and declined to 732 billion units in 2019. The growth of the shipment volume of smoke-free products means significant adult smokers attempt to use smoke-free products as a healthy alternative to traditional tobacco.
Since 2016, PMI announced its smoke-free vision, PMI has delisted over 600 cigarette stock-keeping units (SKUs) and broadened its portfolio of heated-tobacco units to more than 400 SKUs.
According to the report, around 9.7 million users globally stopped using tobacco and switched to PMI's heat-not-burn smoke-free product IQOS at the end of 2019, and about 6.6 million in 2018.
Huub Savelkouls, chief sustainability officer at PMI, pointed out:
"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."
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