Philip Morris International Sustainability Report Outlines Fundamental Transformation to Shift Its Business to Smoke-Free Products

Philip Morris International Inc. (“PMI”) (NYSE / Euronext Paris: PM) today published its sustainability report, outlining the fundamental transformation of the company to shift its business to smoke-free products. PMI’s efforts are squarely focused on replacing cigarettes with smoke-free products, offering the millions of men and women who continue to smoke a better alternative. This second United Nations Global Compact Communication on Progress includes expectations for investment, resource allocation and progress towards a smoke-free future.

• Since 2008, PMI has invested more than USD 3 billion in fundamental research, product and commercial development, production capacity, scientific substantiation and studies on adult smoker understanding of smoke free products.
• In 2017, PMI expects over 70% of its global R&D expenditure and over 30% of its global commercial expenditure to be allocated to smoke-free products.
• PMI has announced planned investments of more than USD 1.7 billion to build or convert its factories for the production of smoke-free products.
• More than 3 million adult smokers have already switched to IQOS, the first of PMI’s smoke-free products. By 2025, the company expects that at least 40 million consumers who would have otherwise continued smoking, will have switched to its smoke-free alternatives.
• The company indicates, as an aspirational goal, that by 2025 at least 30% of its volume will come from smoke-free products, assuming constant PMI market share.

The report also provides a comprehensive overview of PMI’s sustainability fundamentals, including:

• Its Agricultural Labor Practices program, which continues to raise the bar on improving labor conditions in agriculture, within and beyond tobacco;
• The adoption of science-based targets for greenhouse gas emissions, achieving a 23% reduction in 2016 compared to 2010, and targeting a 40% reduction by 2030 across the company’s entire value chain. For a third year in a row, PMI received recognition on CDP’s Climate A-List;
• Its external engagement principles, as well as marketing principles for combustible products and Good Conversion Practices for smoke-free products;
• Programs to fight illicit tobacco trade, including PMI IMPACT, a global funding initiative to support organizations in developing and implementing projects dedicated to fighting illegal trade and related crimes. PMI recently announced 32 projects selected for funding with approximately USD 28 million in the initiative’s first round; and
• PMI’s status as a Top Employer, including equal-salary certification, women in management, and health and well-being programs.

The full Communication on Progress is available at www.pmi.com/UNGCprogressreport2016 on the PMI website.

Philip Morris International Inc.
Philip Morris International Inc. (PMI) is a leading international tobacco company, with six of the world's top 15 international brands and products sold in more than 180 markets. In addition to the manufacture and sale of cigarettes, including Marlboro, the number one global cigarette brand, and other tobacco products, PMI is engaged in the development and commercialization of reduced-risk products (RRPs). RRPs is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. Through multidisciplinary capabilities in product development, state-of-the-art facilities, and industry-leading scientific substantiation, PMI aims to provide an RRP portfolio that meets a broad spectrum of adult smoker preferences and rigorous regulatory requirements. For more information, see www.pmi.com and www.pmiscience.com.

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