Linked to PMI's newly introduced Sustainability Index, the new ESG KPI Protocol and the ESG Highlights provide data-driven insight into PMI's ESG performance
Following the introduction of PMI's Sustainability Index, Philip Morris International Inc. (PMI) (NYSE:PM) made its ESG KPI Protocol publicly available. This document describes how the Sustainability Index will measure PMI's progress toward reaching the goals outlined in its 2025 Roadmap and provides details about the 19 metrics that comprise PMI's Sustainability Index. This announcement follows the release of PMI's Integrated Report 2021, which includes details of the company's Sustainability Index and the 2022 Proxy Statement, which provides details on how long-term executive compensation is linked to the company's 2025 Roadmap through the Sustainability Index.
The ESG KPI Protocol is a separate, dedicated explanation of the Sustainability Index's mechanics. It includes the definition, methodology, and scope of each of the Sustainability Index's KPIs to provide measurable, verifiable, consistent, and accurate reporting on progress.
Through publication of its ESG KPI Protocol, PMI aims to provide further transparency on the key metrics used to measure how the company is progressing towards achieving its purpose and creating value for shareholders and other stakeholders. Further, the ESG KPI Protocol establishes a framework, which is specific to the company, and clearly defines KPIs that can provide the organization with a method for making the connection between the company's purpose, strategic direction, financial performance, and environmental and social considerations.
"As sustainability matures and gains importance inside and outside our company, the question of how to measure ESG performance is something many continue to grapple with. Accordingly, we developed a clear process for establishing concrete definitions, documentation, and controls for sustainability with the aim of standardizing how we measure ESG performance," said Jennifer Motles, Chief Sustainability Officer. "We have long expressed our support for more rigor in sustainability-related reporting—and not just for companies, but also for ESG ratings and related products. There is a need for greater transparency, more robust methodologies, and better clarity on definitions and assumptions. We certainly welcome recent developments leading to more consistency in standards under strong governance frameworks."
Additionally, PMI published its 2021 ESG Highlights—a data-driven document based on the company's 2021 Integrated Report and tailored to complement investor relations materials. It aims to further strengthen investor engagement and understanding of the relevance and robustness of PMI's sustainability strategy and transformation.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is a leading international tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company's current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, vapor, and oral nicotine products, which are sold in markets outside the U.S. Since 2008, PMI has invested more than USD 9 billion to develop, scientifically substantiate, and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. The U.S. Food and Drug Administration (FDA) has authorized the marketing of versions of PMI's IQOS Platform 1 devices and consumables as Modified Risk Tobacco Products (MRTPs), finding that exposure modification orders for these products are appropriate to promote the public health. As of March 31, 2022, PMI's smoke-free products were available for sale in 71 markets, and PMI estimates that approximately 12.7 million adults around the world, excluding Russia and Ukraine, had already switched to IQOS and stopped smoking. With a strong foundation and significant expertise in life sciences, in February 2021, PMI announced its ambition to expand into the wellness and healthcare areas and deliver innovative products and solutions that aim to address unmet consumer and patient needs. For more information, please visit www.pmi.com and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This press release contains statements relating to future plans and circumstances, including statements regarding our planned strategies, programs, operations, and goals that are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may generally, but not always, be identified by the use of words such as "anticipates," "intends," "expects," "believes," or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of PMI. Any such forward-looking statements speak only as of the date on which they are made and PMI has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.
PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as components and materials for our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; or if it is unable to attract and retain the best global talent, including women or diverse candidates. Future results are also subject to the lower predictability of our reduced-risk product category's performance. PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2021, and the Form 10-Q for the quarter ended March 31, 2022. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligation.