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Sustainable Brands Pursues Broad-Based Business Transformation

SB announces PMI as the first graduate of its Voyager program — established to support the transformation of brands that face significant challenges related to ESG performance and reputation.

Brand Provided | By Sustainable Brands | Published 3 years ago | About a 7 minute read

Image: Johannes Plenio/Pexels

Since 2006, Sustainable Brands™ (SB) has envisioned a future where people and the planet are healthy and flourishing, thanks to a transformed economy. This shift will see all parts of the value network — from innovators and legacy businesses to their suppliers, investors and customers — working together to create the regenerative economy of tomorrow.

Working at the front end of innovation for a flourishing future means attracting companies across the economic system. It’s important to help them recognize the problems we face collectively and individually, and the opportunities these problems present for creating positive change. Over time, SB has developed a multifaceted platform to help enable that systems shift. It contains a variety of programs and tools that help a wide range of companies to transform themselves and their stakeholders. As a result, those companies can prosper as future-proof brands that are right for the future we need.

SB’s hypothesis has been that even traditionally challenged brands and sectors, if they are committed to ‘creative self-destruction,’ can meaningfully contribute to a flourishing future. They can achieve this by reimagining their purpose and redeploying their core competencies toward new product offerings that better align with the needs of a healthy society and planet. The SB Voyager program assists in that metamorphosis. It’s an onramp to SB’s peer-to-peer Corporate Member Network that has been established to support the full transformation of brands that face significant challenges related to environmental, social and governance (ESG) performance and reputation.

“SB has a vibrant network of Corporate Members. It’s composed of professionals from nearly 80 global and emerging brands who regularly learn from, collaborate with, and support one another on the journey to becoming ‘sustainable brands’,” said Darren Beck, VP of membership and international for SB. “Some companies have much greater distance to cover on that journey. They’d like to join the network, but have yet to meet the minimum requirements. If they’re ready to fundamentally transform their business to help create a more sustainable future, we’re ready to make room for them at the table. That’s where the Voyager program comes in.”

Today, SB is proud to acknowledge the first graduate from the Voyager program: Philip Morris International (PMI) — which became the inaugural participant when the program launched two years ago. At that time, it was well into an industry-first transformation. PMI made a public commitment in 2016 to change its business by actively phasing out cigarettes and replacing them with smoke-free products. According to World Health Organization (WHO) forecasts, there will still be more than 1 billion smokers by the year 2025. PMI is working to provide better, science-based alternatives for those adults who otherwise would continue to smoke. To date, PMI remains the only traditional cigarette manufacturer to make this commitment and thus reports regularly, and in detail, on its progress.

Prior to and during its two-year trial period as an SB Voyager, PMI engaged SB's Advisory Board and Corporate Members in stakeholder sessions and member meetings. In those engagements, members emphasized the importance of demonstrating an ongoing commitment to its smoke-free aspiration and beginning to envision what a net-positive future might look like for the company. PMI has risen to the occasion. Among other moves, the company has reaffirmed its board-level commitment to a smoke-free future and strengthened its sustainability governance during the last two years. This year, PMI furthered its ambitions — announcing an aspiration of generating at least $1 billion in net revenues from ‘beyond nicotine’ products by 2025, as well as an increased 2025 aim for the contribution of its smoke-free products to total net revenues to more than 50 percent; meaning that in five years, cigarettes will account for less than half of PMI’s total net revenues.

“It has been gratifying to see the progress PMI has made in just two years by leveraging the healthy challenge, support and encouragement of SB’s community and our tools. It is rare to see a company move so quickly, as we hope all companies will do — from thinking about how they can do less harm, to completely rethinking their business — all with the goal of eventually becoming a net-positive contributor to society,” Beck noted.

When PMI joined the Voyager program, it made the same commitments as SB’s full-fledged Corporate Members, plus the following Voyager-specific commitments:

It is undertaking a transformational change that goes to the heart of the controversies identified in SB’s membership screening process — in PMI’s case, this involves selling harmful, addictive products and operating in a highly controversial and criticized industry.
It has an active and influential change agent/champion driving the transformation within the business. This is clearly embodied by Jennifer Motles — who was promoted in late 2020 from Director of Social Impact and Sustainability to Chief Sustainability Officer, and now reports directly into PMI’s Chief Financial Officer, Emmanuel Babeau.
PMI CEO André Calantzopoulos has openly addressed the aforementioned controversies, affirmed support for the transformation and stated how it will help resolve the issues.

Through the Voyager program, PMI actively participated in bilateral conversations with members and other SB stakeholders at Corporate Member meetings and Sustainable Brands events around the world. PMI was also given access to the SB Brand Transformation Roadmap℠ — a proprietary orientation and navigation tool that comprehensively maps out the journey from business-as-usual to a fully sustainable brand, and helps companies determine where they fall in five key areas:

Within each of these areas, the Roadmap defines five levels of progress:

PMI was required to use the Roadmap to assess where it landed on the journey to becoming a ‘sustainable brand’ and identify opportunities for improvement. To balance its self-assessment, SB leadership scrutinized PMI responses to the assessment and facilitated external feedback from a variety of its Corporate Members.

“Sustainable Brands provides tools like the Roadmap to help us understand the north star and benchmark our performance internally. It also offers an opportunity to receive candid feedback and directional advice,” Motles said. “As an SB community member, we are able to participate in constant dialogue and fruitful discussion with other brands that have designed for a regenerative future from the start, have overcome transformational challenges similar to what we face, or may want to collaborate on eliminating barriers that impede our collective ability to change. PMI’s participation with the SB community across the globe and its focus on transformation enables us to advance faster in the right direction.”

SB acknowledges that welcoming a controversial company into the community is hard, even when that company is transforming its business model for the better. A lot of work goes into building understanding, cultivating trust and gauging authenticity. However, Beck says, the engagement is worth it.

"We recognize that no company is perfect. To flourish, businesses of all stripes need to reinvent themselves to address today’s global challenges. That's why I find PMI inspiring," Beck explains. "The level of transformation that they’re pursuing is a master class in big hairy audacious change. They are transforming their entire business model through a process of creative self-destruction — and challenging their industry to do the same. There are many insights that other brands can glean from this journey and apply to their own."

SB founder and CEO KoAnn Vikoren Skrzyniarz says:

“PMI’s commitment to industry disruption and business transformation demonstrates how every company has the potential to course correct and help create a more sustainable future. Its focus on switching smokers from cigarettes to better alternatives has the potential to substantially improve public health. But even more exciting is to see PMI taking a step towards a net-positive future by setting a significant revenue target for products that go ‘beyond nicotine.’ Leveraging its expertise in life science to enter the botanical and respiratory drug delivery markets is a way to retain and enhance talent and innovation, whilst applying existing skills and resources to delivering more social good as a brand. We salute PMI’s achievements to date and welcome them as a Corporate Member.”

SB sees its Voyager program and Brand Transformation Roadmap as tools to cultivate authentic engagement and progress with companies that are committed to reshaping their products and business models in service of a socially and environmentally regenerative future. When companies — particularly those with unsustainable business models — embrace their past; recalibrate; and boldly pursue new, industry-changing paths to reduce impact and move toward a net-positive future, we all benefit.