Marlboro

RATING

SECTOR

Tobacco

WEBSITE

CONTACT

Philip Morris Products S.A.
Quai Jeanrenaud 3
2000 Neuchâtel
Switzerland

STOCK EXCHANGE

LISTING

  • CDP A list 2018 Climate Change 
  • CDP Supplier engagement leader 2019
  • Equal Salary certified

EMPLOYEES

77,400

CHIEF SUSTAINABILITY OFFICER

Huub Savelkouls

AWARDS

N/A

CONTENT SOURCE

FURTHER READING

Report created by Katerina Vargova

Marlboro

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Note: Philip Morris International is the company which manufactures cigarettes with brand name Marlboro. Marlboro on its own is a brand name and thus the sustainability of Philip Morris International is attributed to Marlboro.

Marlboro is an American brand of cigarettes, currently owned and manufactured by Philip Morris USA (a branch of Altria) within the United States, and by Philip Morris International (now separate from Altria) outside the United States. Marlboro is the best-selling cigarette brand in the world since 1972.

Marlboro is the world’s best-selling international cigarette, which in 2018 accounted for approximately 36% of Philip Morris International‘s total cigarette shipment volume and held a 9.7% share of the international cigarette market.

Philip Morris International (PMI) is a leading international tobacco company engaged in the manufacture and sale of cigarettes, smoke-free products and associated electronic devices and accessories, and other nicotine-containing products in markets outside the U.S. 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. PMI’s smoke-free IQOS product portfolio includes heated tobacco and nicotine-containing vapor products. 

PMI is dedicated to doing something very dramatic – they want to replace cigarettes with smoke-free products as fast as possible. That’s why as stated, they have more than 400 scientists, engineers, and technicians developing less harmful alternatives to cigarettes at their two research facilities in Switzerland and Singapore.

Company Sustainability Activity

According to Philip Morris International, sustainability is about creating long-term value while minimizing the negative externalities associated with their products, operations, and value chain. PMI’s Board of Directors understands the special responsibility as a tobacco company and expects them to continuously improve the sustainability of their business and value chain and to contribute to the global sustainability agenda. 

They provide detailed updates on their commitments, achievements and challenges in the relevant sections in their report, along with many case studies.

Highlights

  • 36% absolute CO2 emissions reduction from their own operations (Scope 1 and 2) in 2018 versus their 2010 baseline
  • 26m additional trees planted by their suppliers and farmers in 2018
  • 93% decrease in plastics content of IQOS device packaging by replacing plastic trays with wood pulp trays in 2018
  • 1st PMI factory AWS certified in Brazil in 2018

Targets

Reducing environmental footprint 

  • 30% reduction of absolute CO2 emissions from their own operations (Scope 1 and 2) by 2020, 40% by 2030, and 60% by 2040 versus 2010 baseline 
  • 100% share of electricity used in manufacturing from renewables by 2030, versus 2010 baseline 
  • 40% reduction of absolute CO2 emissions from their operations and value chain (Scope 1,2, and 3) by 2030 versus 2010 baseline 
  • 70% reduction of flue-curing GHG emissions by 2020, versus 2010 baseline 
  • Zero Coal used in tobacco curing by 2020 

Biodiversity 

  • Zero Net deforestation of primary and high conservation value (HVC) forests associated with the tobacco supply chain by 2020
  • Zero Net deforestation of primary and HCV forests associated with the supply chain paper and board by 2022 
  • Zero Net deforestation of primary and HCV forests associated with the supply chain of other significant pulp-based product including cellulose acetate tow by 2025 
  • Zero Net deforestation of natural forest in the tobacco supply chain by 2025
  • Zero Net deforestation of natural forests in the paper and pulp-based products supply chains by 2030
  • Net positive impact on forests associated with the tobacco supply chain by 2025

Minimizing waste & littering 

  • All manufacturing facilities with zero waste to landfill by 2022

Managing water 

Progress

  • In 2019, out of the 94% of farms monitored by field technicians on the topic of agricultural labour practices, less than 1% were found with child labour incidents (children performing hazardous tasks).

Reducing environmental footprint

  • Reduce carbon emission in operations (Scope 1 and 2) and value chain (Scope 3).
  • In 2018, PMI continued its global program to implement energy-saving projects at every factory: commissioned projects focused on energy-efficient buildings, fuel control in manufacturing, and LED lighting
  • Philippines: installed a solar photovoltaic plant to produce clean electricity
  • Mexico: built a new boiler house to use biomass instead of fossil fuels, which should both lead to an estimated annual emissions reduction of 5,000 tons of CO2e annually 
  • Lowering carbon emissions from transportresults from good vehicle maintenance, ongoing switch to hybrid and more fuel-efficient vehicles, and eco-driving behaviour.
  • PMI is on track to achieve its current targets, with an overall reduction of 615,595 tons of CO2e in 2019
  • Working with tobacco farmers to reduce emissions – run 41 carbon reduction initiatives across their tobacco supply chain that focus on three strategic aspects: supporting the implementation by suppliers to plant trees in farmers’ communities; improving the fuel efficiency of flue-curing barns; switching from high-carbon or unsustainable fuels to sustainable wood staircase and a range of biomass products 
  • Provides guidance and support to make farmers more fuel-efficient, focusing on better combustion efficiency, ventilation, and heating control
  • In 2018, reached 46%, of 70% commitment (2020), of the tobacco leaf purchase cured using renewable fuels that are fully traceable
  • In 2019, they achieved the global multi-site certification to ISO 14001 and OHSAS 18001 of 98% of its factories
  • In packaging, more than 90% of their materials were paper and cardboard in 2019
  • In 2019, their CIRCLE hubs processed over 150 tons of end-of-life devices and materials destined for recycling or energy recovery
  • In 2019, for the third consecutive year, PMI earned a place on CDP’s Supplier Engagement Leaderboard for their actions and strategies to reduce emissions and lower climate-related risks in its supply chain.

Biodiversity  

  • To prove that firewood is renewable and traceable, they use their Monitoring Framework, to verify the sustainability attributes of how their suppliers and their farmers are managing deforestation risks. 
  • Forest land clearance for tobacco growing 
  • PMI aim is to ensure that the suppliers and farmers they work with plant more trees for barn construction than they cut by 2025
  • 90% tobacco purchased at no risk of deforestation of old-growth forest
  • PMI integrated pest management approach to help conserve biodiversity by promoting the use of less hazardous crop protection agents (CPAs), reducing unnecessary use of CPAs, ensuring that CPAs are managed appropriately.

Minimizing waste & littering 

  • PMI works with local stakeholders in their markets to promote anti-littering, using signs and other communication tools to encourage proper disposal behaviour in littering “hotspots,” such as urban centres, beaches, parks, outdoor concerts, and events. 
  • Enabling action by consumers: access to adequate waste receptacles such as ashtrays or bins with stubbing plates, or portable solutions, such as pocket ashtrays.
  • Enforcing anti-littering laws by raising consumer awareness on existing regulations, they can contribute to making littering socially unacceptable, an approach which can complement the work of authorities.
  • A successful collection system of heated tobacco units at their offices in Switzerland
  • By including sustainability considerations right from the design stage of the product, the devices’ carbon emissions per 1,000 use cycles they are reduced by 40% from previous versions
  • 84% of factory waste was recycled, in absolute terms, total waste has decreased by 4% in 2018 to 134,367 tons, approximately 1% of which was hazardous waste. 

Managing water

  • In 2017, PMI started to pilot the Alliance for Water Stewardship (AWS) Standard. In March 2018, the first factory in Brazil became AWS certified. Throughout the rest of 2018, PMI started to implement the AWS Standard – in Italy, Portugal, Indonesia, Russia, and Turkey – as part of the program to certify all factories by 2025.
  • In 2018, PMI sponsored ten solar-powered boreholes, the rehabilitation of hand pumps, sanitation facilities, concrete storage tanks, and rainwater harvesting systems, and they distributed household water treatment products and organized WASH training sessions in 15 villages. 

Certificates

ISO 14001 – 100% manufacturing facilities certified

OHSAS 18001

AWS certification – Core level for Philip Morris Mexico valid until 2023 

UN Sustainable Development Goals

UN SDGs Compliance

This analysis is based on Marlboro’s parent company, Philip Morris International.

SDG 3 

  • Cigarette smoking causes serious disease. By replacing cigarettes with less harmful alternatives they can significantly reduce the negative impact of their products on individuals and society.

SDG 8

  • They ensure good working conditions for all their employees and expect their suppliers to do the same for the benefit of over one million workers throughout their value chain.
  • In 2019, PMI brought together initiatives under a “Living Income Program,” which aims to assess actual farmer income versus the living income benchmark of a given area.

SDG 12

  • PMI improves the life-cycle impacts of their products – from reducing the environmental impacts of tobacco growing, to efficient low-carbon manufacturing, litter prevention and recycling programs.

SDG 13

  • PMI’s energy-efficiency programs in its operations and alternative curing fuels program in its tobacco leaf supply chain contribute to mitigating the risk of climate change

SDG 14 

  • PMI’s Environmental Commitment governs their management approach to waste and water to ensure that all effluents released are within, or better than, levels required by regulations in the countries where they operate

SDG 15

  • They are committed to protecting biodiversity, especially forested areas affected by their operations, particularly in the supply chain of tobacco leaf and paper-based packaging.

Secondary SDGs: 1, 2, 4, 5, 6, 7, 9, 10, 11, 16, 17

Evaluation

Marlboro as a part of Philis Morris International does not produce independent Sustainable Reports, therefore lacks transparency. Although PMI’s Sustainability Report mentions that PMI is making its sustainable strategies based on key performance indicators (KPIs). KPIs are not published in the report.

PMI managed to get almost all of their manufacturing facilities ISO 14001 and OHSAS 18001 certification which reduce their environmental impact.

PMI is listed in CDP but not in other significant indices (like Dow Jones Sustainability Index). Although PMI is trying to align with all of the UN SDGs, their activities are controversial – their products are harming human health and the environment. 

For PMI’s activities to reduce environmental footprint, Marlboro getting rating C.

Analyst Outlook: Negative

Marlboro is part of a tobacco industry that does a lot towards sustainability but hurts the environment and human health in other ways as well.

PMI and Marlboro are trying to better the world by being different and delivering a smoke-free future. They keep making the same mistake by promoting new products with no insurance that it will be a safer alternative for human health than cigarettes. This is misleading for the consumer with their intentions (lobbying and marketing). 

Key Points

  • Marlboro is subsidiary of Philip Morris
  • Even though Philip Morris is progressing in researche and development of alternate cigarettes, they still continue to make and market the largest portion of cigarettes around the world.
  • 6.6 million adult smokers around the world have already stopped smoking and switched to IQOS
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