Sustainable Tobacco Production

Philip Morris International

3. Good Health and Well-Being 5. Gender Equality 17. Partnerships for the Goals

Overview

In 2014 Philip Morris International introduced a new product, which literally changed the tobacco industry. IQOS is a tobacco heating system which releases 95% less harmful substances when smoked than an ordinary cigarette. Along with creating less harmful products, PMI also successfully solves issues of social well-being, eco-friendly behavior and cooperation.

Authors

Alina Zaytseva

Alina Zaytseva

Artem Zelenin

Artem Zelenin

Olga Smirnova

Olga Smirnova

Vladislav Konshin

Vladislav Konshin

Anastasia Izmaylova

Anastasia Izmaylova

Mikhail Fomichev

Mikhail Fomichev

School

The Russian Presidential Academy of National Economy and Public Administration (RANEPA)

The Russian Presidential Academy of National Economy and Public Administration (RANEPA)

Professor

Natalia Yankovskaya

Natalia Yankovskaya

Innovation

Philip Morris International is one of the major companies in the tobacco industry. Despite its business focus, the company considers the importance of achieving sustainable development. Corporate social responsibility actions in PMI began to be discussed by general public after the development of their innovation.

According to Irina Zhukova, Director of Sustainable Development and Corporate Programs of PMI Russia, “The mission was to create a product that had the potential to reduce smoking-related harm”. As a result of long research, the fusion of science and psychology allowed the creation of IQOS. As it is known, cigarettes are one of the few legal products, the use of which can cause serious health-related diseases, including cancer. It is important to note that the harm comes primarily from the burning process, and nicotine, if not overheated, only causes addiction. In IQOS burning is replaced by heating at lower temperatures (300 degrees Celsius instead of 800). PMI scientific studies say that it reduces the release of harmful substances by 95%.

Moreover, when using the product, the ritual provided by ordinary cigarettes is preserved. Therefore, it is a full-fledged alternative that allows smokers to abandon options that are way more harmful.

Sustainable Tobacco Production

Inspiration

One of the motives for the company to act was the negative public opinion about the tobacco industry. Many believe that the activities of such companies contradict the goals of sustainable development in general. To that Irina Zhukova says the following, “If we are talking about the Sustainable Development Goals, there is Goal 3, one of the Targets is to reduce the harm from smoking a cigarette. We believe that our company’s actions contribute to achieving it”. It is impossible to close the tobacco industry as it will result in a lot of illegal or counterfeit products appearing and, thus, such action will not solve the problem of smoking. So, what actions were taken? About 15 years ago, PMI thought about what would happen next with this industry. As a result, two research centers were established (one in Switzerland, the other in Singapore). They were aimed to develop new products that are less harmful for the environment.

Overall impact

Philip Morris International's innovation has impacted society, the environment and business in general. The company is concerned about the importance of sustainability. They think that the product should be at the forefront of sustainable development and, according to Irina Zhukova, “Sustainable development is about HOW you do your business, but what is also important is WHAT you do”.

Due to the introduction of a new product, public opinion about the company has become more positive. Since then, more people have been applying for jobs at FMI because it has started a paradigm-changing process for the tobacco industry.

As for the impact on the environment, it has been proven that the newly developed IQOS product has much less negative influence on the ambient air. This is the conclusion reached by scientists from the University of Rome La Sapienza, who compared the indoor air quality after smoking cigarettes and IQOS. It has been proven that the vapor that is released consists of water, glycerin and quickly dissipates without leaving an unpleasant odor on clothes and hands.

However, let’s not forget that the use of IQOS, which consists of three parts (the device itself, the charger and the stick), produces toxic waste. Improper disposal of electronic devices can have negative repercussions for the environment and human health. Therefore, the company is actively addressing this problem. Any IQOS device can be handed over to a special point of electronic devices recycling. And soon the IQOS devices disposal service will appear in all brand stores. Moreover, PMI plans to start recycling used sticks next year already. Consumers will be able to store these sticks in special bags that will be sent for recycling.

For 2021 in Russia, more than 70% of IQOS users have given up cigarettes and finally switched to their substitutes. This is undoubtedly a good result, showing a significant long-term impact of the innovation. The whole story of sustainable development is only gaining momentum and, according to Irina Zhukova, “There will be further development. The process should be systemic, it is not a one-off project”.

Business benefit

Philip Morris International benefited in various ways by being sustainable. In 2020, PMI's global office conducted the first social and business impact assessment of the company's activities in Russia. The study identified the following positive distinctive features: a strong corporate culture and open work environment, well-established internal communications, successful transfer of employees to remote work, the implementation of protective measures to combat coronavirus that apply to contractors, as well as developed volunteer and charitable practices.

Philip Morris really cares about their employees' wellbeing. The company has Equal Salary Audit. It’s an audit of equal career opportunities between men and women and equal pay in the same positions. PMI is a supporter of the eradication of gender inequality, and by taking this measure, PMI contributes to reaching Goal 5.1. “We want to be a part of the business that improves the world. Rarely any company in Russia does things we do” says Irina Zhukova.

Social and environmental benefit

In terms of societal impact, the following benefits were identified during the previously mentioned assessment: competitive wages and social benefits, which state for the achieving SDG 5, workplace safety, opportunities for professional development and growth, participation in volunteer projects, providing support during the COVID 19 pandemic.

Moreover, PMI cooperates with competitors, addressing Goal 17. Here is a quote from Irina Zhukova, “The tobacco industry is very consolidated. There are only 4 companies around the world. We have a program that we have been working on together with counterparts for many years. Its aim is to prevent smoking among minors. We decided that our field is not for competition, that there will be mutual help”.

Regarding the environmental benefit company is a member of 9% of the world’s corporations whose CO2 emissions are minimal according to the Carbon Disclosure Project.

That's what Irina Zhukova thinks about this, “Environmental work in the company has always been carried out, even before everyone started talking about it. By 2025, we want to achieve carbon-neutral production. The transition to biofuels is already underway in the Leningrad Region. In addition, we always have special requirements for our suppliers regarding materials, they are also environmentally-aware.”

Interview

Irina Zhukova, Director of Sustainable Development and Corporate Programs

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Philip Morris International

Philip Morris International

Worldwide

Business Website: https://www.pmi.com/

Year Founded: 1847

Number of Employees: 10000+

Philip Morris International (PMI) is one of the world’s leading international tobacco companies. PMI aims to completely replace cigarettes with their smokeless products.