Philip Morris International's Decarbonization Strategy

While Philip Morris International is widely known as a cigarette company, in 2016 it announced its new purpose: To deliver a smoke-free future by focusing its resources on developing, scientifically substantiating, and responsibly commercializing smoke-free products that are less harmful than smoking, with the aim of completely replacing cigarettes as soon as possible.

These innovative alternative products do not burn tobacco or create smoke, and therefore emit significantly lower levels of carcinogens and other toxic substances than cigarettes. Although the company’s transformation journey started with a vision centered on the critical mission of phasing out cigarettes, this is not its sole or ultimate end goal. Researching and developing noncombustible alternatives that are scientifically substantiated to be less harmful than cigarettes is the first step. Broadening access for adult smokers while simultaneously and deliberately working to phase out cigarette smoking completed the equation of its smoke-free purpose. In the process, the company has expanded its social, human, intellectual, and manufactured capital in ways that allow it to go a step further, moving from a value proposition centered on doing less harm toward one where it can seek to have a net positive impact on society.

Progress achieved to date

2010-2020

-55%

-50%

Reduction in PMI’s direct operations (scopes 1+2)

Reduction in PMI’s upstream and downstream value chain (scope 3)

New baseline for PMI's targets set from 2019

Set science-based targets to 1.5°C pathway vs. 2019 baseline

New approach to carbon pricing (shadow price + carbon levy)

Bringing PMI’s targets forward

2021

Recognizing the urgent action required to tackle the climate change crisis, the LCTP brings forward PMI’s aim to achieve: • Carbon neutrality in PMI’s direct operations by five years to 2025 • Net-zero emissions across its entire value chain by 2040 – 10 years earlier than its previous 2050 goal

ZERO

In PMI’s direct operations (scope 1+2), target accelerated to 2025; formerly 2030

Carbon neutral

Across PMI’s value chain, target accelerated to 2040; formerly 2050

Net-zero ambition

PMI to set a new target on % of suppliers adopting science-based targets

Engaging suppliers

Introduction of a portfolio of climate investments to finance new technologies and solutions

Nature-based solutions

2022

Where PMI is today

Delivering PMI’s targets on its climate strategy (scopes 1+2)

PMI has increased the number of carbon-neutral production centers in its network by eight over the past year, rising from five in 2021 to 13 in 2022. The company is making progress towards its goal of 100 percent of its factories being carbon neutral by 2025.

2025

In PMI’s direct operations

Carbon neutral

Of factories will be carbon-neutral certified

100%

Of PMI’s fleet will be hybrid or electric

35%

Absolute reduction vs. 2019 in PMI’s tobacco supply chain

35%

Green electricity in manufacturing

100%

Forest net positive in PMI’s tobacco supply chain

100%

2030

Absolute reductions in PMIs direct operations (Scope 1 and 2)

-50%

Absolute reductions in PMI’s upstream and downstream value chain (Scope 3)

-50%

Net-zero goal (scopes 1, 2+3)

2040

PMI’s Low Carbon Transition Plan includes the company’s new target of achieving net-zero emissions across its entire value chain by 2040 – 10 years earlier than its previous 2050 goal.

View PMI's progress

See where PMI is today

View PMI's plan

Track PMI's progress

2020

Impact of COVID-19

Scope 1+2 emissions

Scope 3

Offsets and carbon removals

Net carbon emissions

CO2 emissions

Scope 1+2 emissions

Scope 3

Offsets and carbon removals

Net carbon emissions

Track PMI's progress

2021

Scope 1+2 emissions

Scope 3

Offsets and carbon removals

Net carbon emissions

Track PMI's progress

2022

CO2 emissions

Scope 1+2 emissions

Scope 3

Offsets and carbon removals

Net carbon emissions

Track PMI's progress

2025

CO2 emissions

Carbon neutrality (scope 1+2)

Scope 1+2 emissions

Scope 3

Offsets and carbon removals

Net carbon emissions

Track PMI's progress

2030

CO2 emissions

Scope 1+2 emissions

Scope 3

Offsets and carbon removals

Net carbon emissions

Track PMI's progress

2040

CO2 emissions

The scope of the progress spans the globe

2022

MEXICO

= production center

BRAZIL

ARGENTINA

SENEGAL

PAKISTAN

THE CZECH REPUBLIC

LITHUANIA

SWITZERLAND

PORTUGAL

INDONESIA

GREECE

Achieving carbon neutrality across all PMI factories by 2025 was one of the ambitious targets set out in PMI’s Low Carbon Transition Plan (LCTP). PMI has adopted a three-step approach in its efforts to achieve the company’s emissions targets:

Reducing consumption and optimizing efficiency to cut greenhouse gas (GHG) emissions.

Minimizing the use of fossil fuels and promoting the switch to renewable energy.

Compensating unavoidable emissions by prioritizing in-setting projects (nature-based solutions) and purchasing high-quality carbon credits.

Scale solutions towards a positive impact on water resources, measured as volume of water optimized and restored

Water

Protect nature by achieving no net loss on ecosystems connected to PMI’s value chain

Biodiversity

Philip Morris International’s work to reduce absolute emissions is guided by science-based targets aligned with a scenario of an increase in global temperatures of no more than 1.5 degrees Celsius above pre-industrial levels. PMI’s Low Carbon Transition Plan, launched in 2021, introduces the ambition for PMI’s critical suppliers to adopt SBTs (science-based targets) in line with the SBTs that PMI has committed to – aligning with the 1.5°C pathway central to meeting the goals of the Paris Agreement. The Science Based Targets initative (SBTi) has verified PMIs 2040 net-zero science-based target – making the company one of two dozen companies to date that have had their net-zero targets verified by the organization.

Read the company’s Statement of Purpose here

Click here for more information about PMI’s Low Carbon Transition Timeline

Click here to read PMI’s Low Carbon Transition Plan

CO2 emissions

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