Philip Morris International Inc. (PMI) (NYSE: PM) has been included for the second consecutive year in the Dow Jones Sustainability Index (DJSI) North America. The index recognizes the top 20 percent of sustainability performers among the 600 largest U.S. and Canadian companies in the S&P Global Broad Market Index—those that exhibit best-in-class performance against environmental, social, and governance (ESG) metrics, as assessed by S&P Global.
Underpinning PMI’s inclusion in the index, the company scored 84 (out of 100) in the 2021 S&P Global Corporate Sustainability Assessment, reflecting an improvement of 10 points over the prior year and a top decile position in the tobacco industry.1 Importantly, PMI led the tobacco industry in 10 of the 24 criteria assessed1, including Innovation Management, which evaluates companies’ research and development spending, product innovations, and portfolio of tobacco alternatives and smoke-free products.
“ESG ratings can spur greater transparency and incentivize companies to improve their performance,” said Jennifer Motles, Chief Sustainability Officer. “We are proud to again be part of the Dow Jones Sustainability Index North America, which further confirms the significant progress we’re making to transform our business.”
“For many companies, the most material sustainability topics relate to their products,” she continued. “At PMI, addressing the impact of our products on public health, society and the environment remains the focus and core of our strategy. We believe that going beyond company operations to purposefully address product impacts can encourage business model transformations that lead to a more sustainable economy—and a better future. In the case of our industry, this means successfully phasing out cigarettes to accelerate the end of smoking.”
PMI is leading the industry transformation to smoke-free products, which made up approximately 29% of the company’s net revenues in the third quarter of 2021. The company’s ambition is for smoke-free products to account for more than 50% of full-year net revenues by 2025.
Manjit Jus, Global Head of ESG Research, S&P Global said: “We congratulate Philip Morris International for being included in the Dow Jones Sustainability Index for North America. A DJSI distinction is a reflection of being a sustainability leader in your industry. The record number of companies participating in the 2021 S&P Global Corporate Sustainability Assessment is testament to the growing movement for ESG disclosure and transparency."
PMI is also recognized by MCSI with an ESG Rating of BBB2 and by Sustainalytics with an ESG Risk Rating Score of 22.93. Additional information on PMI’s sustainability efforts and ESG performance is available on the company’s sustainability webpage.
Note: The term “material,” when used in the context of economic, environmental and social topics, is defined in the referenced sustainability standards, and is not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures required by the U.S. Securities and Exchange Commission.
1 Score date: November 12, 2021.
2 September 22, 2021 report.
3 October 19, 2021 report. Note: A Sustainalytics score of zero out of 100 represents the lowest ESG risk.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and other forward-looking statements. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.
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; 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. 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 the Form 10-Q for the quarter ended September 30, 2021. 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 obligations.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a smoke-free future and ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, society, the company, its shareholders and other stakeholders. PMI is a leading international tobacco company engaged in the manufacture and sale of cigarettes, as well as smoke-free products, associated electronic devices and accessories, and other nicotine-containing products in markets outside the U.S. In addition, versions of PMI's IQOS Platform 1 device and consumables have received marketing authorizations from the U.S. Food and Drug Administration (FDA) under the premarket tobacco product application (PMTA) pathway; the FDA has also authorized the marketing of a version of IQOS and its consumables as a Modified Risk Tobacco Product (MRTP), finding that an exposure modification order for these products is appropriate to promote the public health. PMI is building a future on a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke. Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, PMI aims to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements. PMI's smoke-free product portfolio includes heat-not-burn products, nicotine-containing vapor products and oral nicotine products. As of September 30, 2021, PMI's smoke-free products are available for sale in 70 markets in key cities or nationwide, and PMI estimates that approximately 14.9 million adults around the world have already switched to IQOS and stopped smoking. For more information, please visit www.pmi.com and www.pmiscience.com.
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