Published 1 year ago.
About a 5 minute read.
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/ This article is sponsored by
Philip Morris International.
PMI recently released its 2021 Sustainability Materiality Report, which describes how the company identifies the ESG topics that inform its strategies, goals, and reporting. It’s conducted with full transparency — for stakeholders, and for society.
It is clear that companies — especially multinationals such as Philip Morris
International, with an extensive value chain and stakeholders around the world —
have an important role to play in understanding their impacts. Periodically
assessing sustainability materiality issues helps a company articulate its
strategy, guide its reporting, and ensure its efforts and resources remain
focused on those areas where it can have the greatest impact.
At PMI, we’ve had strong sustainability
in place for many years. However, we knew that if we weren’t first taking action
to address the health impact of our products, any approach to sustainability
would be incomplete and considered disingenuous. Thus, as we started to
transform toward becoming a smoke-free
we developed a more holistic sustainability strategy — putting product
innovation at its core — and reported for the first time on our ESG efforts in
That same year, we conducted our first sustainability materiality assessment,
which we then refreshed in 2018, 2019, and most recently, in 2021. Throughout
our journey, our sustainability materiality assessment has proven to be
fundamental in shaping our strategy and reporting. With every exercise, we
strengthened our approach and accounted for both internal and external
developments. Notably, the 2021 process allowed us to consider the rapid
advancement of our business transformation, our recently announced ambition to
venture into wellness and
and the progress we have made so far toward the sustainability ambitions we had
announced as part of the 2025 Roadmap in our 2019 Integrated Report. In
addition, we strived to embed the principles of double
to bring further sophistication to our assessment.
Importantly, each assessment incorporates the feedback we’ve collected from
representatives of our key stakeholder groups: consumers, employees, the
supply chain, investors and the finance community,
regulators, the public health community, and civil society. Engaging
with stakeholders — including PMI’s critics — in an open and transparent way
offers the opportunity to understand their expectations and concerns, and to
consider these while defining our priorities. In turn, it also allows us to
strengthen our reporting and better explain the context and the challenges
related to our transformation.
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In 2021, we expanded our assessment — recognizing that there is value in
integrating different perspectives into our analysis to deepen our
understanding. We prepared a list of potentially relevant ESG topics; then, we
not only gathered stakeholders’ views, but also evaluated them according to
PMI’s impacts on society and the planet along its value chain (“outward
impacts”) and the potential risks and opportunities for PMI’s performance and
enterprise value carried by different ESG topics (“inward impacts”). The
insights we gathered will help us refine our sustainability blueprint.
The results of the 2021 sustainability materiality assessment indicated that
topics related to the social impacts generated by PMI’s products — including
product health impacts; sales, marketing, and consumer communications; and
innovation in wellness and healthcare — were a clear priority and represent
those areas with the greatest transformative potential for the company.
Additional topics — such as
diversity and inclusion, and materials and product eco-design, amongst others —
were also identified as clear priorities as they were assessed highly material
from an inward and outward impact perspective or deemed highly relevant by
stakeholders. Further, we identified three priority topics that were not
included in the list of most material topics, but that we expect to gain
momentum in the future:
and human capital development.
As the foundation of our sustainability strategy, the results of our
sustainability materiality assessment allow us to prioritize our focus and
resources on areas where we can have the greatest impact and make the most
progress. We also understood early on that integrated reporting would be the
most holistic way to describe the actions the company was taking to achieve its
purpose of delivering a smoke-free future. This is why we have continuously
evolved our reporting over the years, and quickly advanced it to seek alignment
with the framework of the International Integrated Reporting Council.
In addition, we support and seek to align with guidance and recommendations from
different reporting frameworks and standards, such as those from the
Sustainability Accounting Standards Board (SASB), Global Reporting
Initiative (GRI), Task Force on Climate-related Financial Disclosures
(TCFD), and the United Nations Sustainable Development Goals
(SDGs). Applying all of
these simultaneously while tailoring our disclosures to properly reflect our
company’s unique value proposition is a complex exercise. It is also an
enriching one, as it brings sophistication and perspective to our work.
At PMI, we are committed to continuously improve the way we measure and report
on our company’s approach, taking a comprehensive approach that not only covers
our activities (or “how” we operate) but also focuses on where we can have the
greatest impact: our products (or “what” we produce). We welcome efforts toward
the standardization of ESG reporting and are committed to respond to stakeholder
expectations for transparent, comparable, and reliable information on our ESG
risks and performance.
In February 2022, PMI published its 2021 Sustainability Materiality Report,
summarizing the approach and findings of a sustainability materiality
assessment conducted during the second half of 2021. A sustainability
materiality assessment is a process through which the company identifies,
assesses, and prioritizes issues by collecting inputs from a range of sources.
Published Mar 1, 2022 1pm EST / 10am PST / 6pm GMT / 7pm CET
This article, produced in cooperation with the Sustainable Brands editorial team, has been paid for by one of our sponsors.