TOP 10 TAKEAWAYS

from PMI’s Integrated Report

2022: Transforming for good
Find out how Philip Morris International is making progress toward achieving its purpose and
get detailed information about its strategic vision, performance, governance, and value creation.
Read PMI’s Integrated Report 2022

PMI’s sustainability materiality assessment is the foundation of its sustainability strategy—it

1 allows PMI to identify, assess, and prioritize ESG topics.
In line with the principles of double materiality, PMI’s 2021 sustainability materiality analysis
SUSTAINABILITY assessed the potential impact of sustainability topics on its performance and business overall in
MATERIALITY terms of risks and opportunities that could have an impact on the company’s ability to create value.
ASSESSMENT
& ESG SUSTAINABILITY MATERIALITY MATRIX
FRAMEWORK
HIGH

Product health impact

Sales, marketing, and

consumer communications Climate

Business integrity

Innovation in wellness
Significance of ESG impacts on PMI

and healthcare

Laws and
regulations

Human capital development

Engagement with policymakers
Diversity and inclusion
Economic contribution

Materials and product eco-design Water

Labor standards

Post-consumer waste Health and safety at work

Socioeconomic well-being of
Operational discharge tobacco-farming communities
Privacy
Employee well-being
Biodiversity
LOW

Philanthropy
Animal welfare

LOW Significance of PMI’s impacts on society HIGH

Key

Key Relevance to our stakeholders

ENVIRONMENTAL
Very high
SOCIAL
Relevance to our stakeholders
GOVERNANCE High

Our most material topics Medium

Emerging topics
Low

The sustainability materiality assessment helps identify the environmental,

social, and governance (ESG) issues that the Company should focus on. The
assessment consists of a threefold approach that evaluates both outward and
inward impacts in line with the principles of double-materiality, and accounts
for the expectations of the Company’s stakeholders.
—Jennifer Motles, Chief Sustainability Officer

E S G
ENVIRONMENTAL SOCIAL GOVERNANCE
PRODUC T

Materials and Product health Responsible R&D

product eco-design impact –
I M PAC T

– – Product reliability
Post-consumer Sales, marketing, –
waste and consumer Nicotine science
communications
–
Innovation in
wellness and
healthcare

Diversity and inclusion

Business integrity
–
Climate –
Socioeconomic well-
O P E R AT I O N A L

– Respect for
being of tobacco-farming
Water human rights
communities
– –
–
Biodiversity Sustainable supply
Human capital
I M PAC T

chain management
development

Labor standards
– Stakeholder engagement
Operational discharge Health and safety at work –
– – Data privacy
Animal welfare Employee well-being –
– Fair fiscal practices
Philanthropy

Read PMI’s 2021 Sustainability Materiality Report

Read more about priorities for PMI’s Sustainability Strategy

PMI aims to completely replace cigarettes as soon as possible with smoke-free products that are
2 scientifically substantiated to be less harmful than smoking and to evolve in the longer term into a
broader lifestyle, consumer wellness, and healthcare company.
STATEMENT OF The company’s purpose is clearly articulated in PMI’s Statement of Purpose, a declaration issued
PURPOSE by its Board of Directors. The Statement of Purpose also recognizes those stakeholders most critical
to long-term value creation and sustainability.

EXCERPTS FROM PMI’S STATEMENT OF PURPOSE

The Company is actively accelerating PMI remains committed to accelerating

the decline of cigarette smoking beyond the end of smoking and laying the
what traditional tobacco control measures foundations of a strong business in areas
can achieve alone. of wellness and healthcare as we strive
to develop commercially successful
products that have a net positive
impact on society.
PMI’s key stakeholder constituencies,
which are fundamental to both the
achieving of its purpose and to the
pace of its progress, will be affected in PMI believes that with the right
different ways by PMI’s transformation. regulatory encouragement and support
from civil society, cigarette sales can end
within 10 to 15 years in many countries.

Consumers

Civil society Employees

KEY
STAKEHOLDER
GROUPS
Public health Supply chain and
community business partners

Finance
Regulators
community

Read PMI’s Statement of Purpose

Read more about PMI’s Stakeholder Engagement

PMI’s purpose is grounded in science, technology, and sustainability, and sets

PMI’s long-term horizon. Clarity of purpose is fundamental to guide our efforts
and resource allocation. It enables the company to maintain consistency and
coherence as it transforms rapidly in order to leave cigarettes behind and
ventures into areas that represent new avenues of growth.
—André Calantzopoulos, Executive Chairman

Transforming PMI is not simply about substituting one product with another. It requires
3 revamping the company’s entire value chain and the way it engages with society. This
necessitates a holistic review and overhaul of the company’s entire business model and value
proposition, which brings challenges and opportunities to all aspects of the business.
TRANSFORMING
THE COMPANY
PMI’S BUSINESS TRANSFORMATION

Product transformation
Innovating for better products

PMI’s product lines are the most visible aspect of its

transformation. Over the past decade and a half, the
company has harnessed scientific and technological
advances to develop alternatives to cigarettes that are
scientifically substantiated to be a better choice for
adult smokers than continued smoking. PMI is working
relentlessly to phase out cigarettes by replacing them
with less harmful alternatives as quickly as possible to
achieve a smoke-free future.

Internal transformation
A new organization and value chain

Beyond PMI’s operations, the company is transforming

every step of its value chain to serve the company’s
purpose. PMI recognizes the challenges these changes
pose and are actively helping all those impacted (in direct
and indirect operations) to best manage the transition.

External transformation
Changing the way PMI engages with stakeholders

Engaging with external stakeholders is critical to achieving

PMI’s purpose. The company’s ability to successfully
transform requires that it works together with various
segments of society to create a paradigm shift in which
cigarettes become obsolete.

26 Philip Morris International — Integrated Report 2022

Read more about PMI’s Value Chain Transformation

Business Transformation Metrics

PMI realizes that business transformation is a very company-specific journey, which ESG
4 reporting standards do not adequately capture. To make its progress both measurable and
verifiable, it developed Business Transformation Metrics, a bespoke set of financial and
We realize thatkey
nonfinancial business transformation
performance is a very
indicators company-specific
(KPIs). These metricsjourney,
showcase how the company is
BUSINESS
which ESGresources
allocating reporting standards
away fromdoits
notlegacy
adequately capture.
business as it advances toward a future in which PMI
TRANSFORMATION
no longer makes or sells cigarettes.
METRICS To make our progress both measurable and verifiable, we developed our Business Transformation Metrics, a bespoke
set of financial and nonfinancial key performance indicators (KPIs). These metrics showcase how we are allocating
BUSINESS
resources awayTRANSFORMATION METRICS
from our legacy business as we advance toward a future in which we no longer make or sell cigarettes.

2015 2025
Business Transformation Metrics baseline 2020 2021 2022 aspirations
Total number of users of PMI smoke-
free products (in millions)¹* 0.2 18.3 21.7 24.9
Consumers & Revenues

Estimated number of users who have

switched to PMI smoke-free products
and stopped smoking (in millions)¹* 0.1 13.0 15.3 17.8 >40
Adjusted net revenues ratio (smoke-free/total)²*† 0.7% 24.2% 29.5% 32.1% >50%
Annual net revenue from wellness and
healthcare products (in billion USD)³* n/a n/a 0.1 0.3 ≥1
Number of markets where smoke-free
products are available for sale⁴* 7 64 71 73 100
Proportion of markets where smoke-free
products are available for sale that are
low- and middle-income markets⁵* 17% 39% 42% 42% >50%
Commercialization

Commercial (marketing) expenditure

ratio (smoke-free/total)* 8% 76% 73% 74%
Smoke-free product shipment
ratio (smoke-free/total)⁶*† 0.6% 10.9% 13.3% 15.1% >30%
Smoke-free product shipment volume (billion units)⁶*† 5 80 99 114 >250
Combustible tobacco product shipment
volume (billion units)⁶*† 877 650 645 641 <550
Change in combustible tobacco product shipment
volume (billion units) vs. 2015 baseline⁶*† n/a (25.8)% (26.4)% (26.8)% ~(40%)
Adjusted R&D expenditure ratio (smoke-free/total)⁷* 70% 99% 99% 99%
Supply chain direct spend expenditure
Operations
Sourcing &

(smoke-free/total)⁸ n/a 33% 35% 43%

Number of factories producing smoke-free
products out of total number of factories⁹*† 3 out of 48 9 out of 39 9 out of 38 24 out of 53
* The 2022 metrics marked with an asterisk (*) are subject to PwC’s Assurance Report
* The 2022 metrics marked with an asterisk (*) are subject to PwC’s Assurance Report
Notes:
Notes:
In the fourth quarter of 2022, we acquired Swedish Match, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition
is athe
In keyfourth
milestone in PMI’s
quarter transformation
of 2022, to becoming
PMI acquired a smoke-free
Swedish Match, a market company.
leader inPMI
oralconsolidated statements
nicotine delivery of earningspresence
with a significant for the year ended
in the UnitedDecember 31, 2022, include the results of
operations
States of Swedish
market. MatchMatch
The Swedish from November
acquisition11,
is a2022 (acquisition
key milestone date) transformation
in PMI’s to December 31,to2022, as presented
becoming in thecompany.
a smoke-free Form 10-K for the
PMI’s fourth quarter and year ended December 31, 2022.
consolidated
statements of earnings for the year ended December 31, 2022, include the results of operations of Swedish Match from November 11, 2022
Following the
(acquisition Swedish
date) Match acquisition
to December 31, 2022,and a review of
as presented inPMI and Swedish
the Form 10-K for Match’s combined
the fourth quarterproduct portfolio,
and year PMI reclassified
ended December certain of its own products previously
31, 2022.
reported under its combustible tobacco product category to the newly created smoke-free product category to better reflect the characteristics of these products.
Where applicable,
Following priorMatch
the Swedish years’ acquisition
KPIs have been
and arecalculated to reflect
review of PMI the reclassification
and Swedish on a comparative
Match’s combined basis. Impacted
product portfolio, metrics certain
PMI reclassified are marked
of itswith
own(†).
products previously
reported under its combustible tobacco product category to the newly created smoke-free product category to better reflect the characteristics of these products.
In 2023,applicable,
Where we plan toprior
evaluate our
years’ published
KPIs aspirations
have been to ensure
recalculated they the
to reflect remain ambitious, reasonable,
reclassification and achievable
on a comparative in the context
basis. Impacted metricsofare
a dynamic
marked and
withevolving
(†). smoke-free industry,
and impacts of our recent acquisitions.
In 2023, PMI plans to evaluate its published aspirations to ensure they remain ambitious, reasonable, and achievable in the context of a dynamic and evolving smoke-free industry,
1 Figures pertain to total IQOS users, for definition see Glossary. 7 Adjusted R&D expenditure excludes asset acquisition cost related to OtiTopic, Inc. in
and impacts of its recent acquisitions.
2 For definition of net revenues related to smoke-free products, see Glossary. 2022 2021. Total reported R&D expenditure in 2021 including these items amounted to
1 figure includes
Figures pertainSwedish
to totalMatch net revenues
IQOS users, from November
for definition 11, 2022 in
see pages 205-209 (acquisition
PMI USD 617 million.
smoke-free products that can be converted into cigarette equivalent units, such as
date) to December 31, 2022. 2021 figure excludes the impact related to the Saudi 8 Direct spend focuses on materials used in the manufacture of our products; it includes
Integrated Report 2022. heat-not-burn, e-vapor, and oral nicotine. Total shipment volume includes the listed
Arabia customs assessments. tobacco leaf, direct materials, and electronic devices and accessories. Data excludes
2 For definition of net revenues related to smoke-free products, see pages 205-209 in smoke-free products as well as combustible tobacco products: cigarettes and other
3 For definition of net revenues related to wellness and healthcare, see Glossary. 2021 Swedish Match and Vectura Fertin Pharma.
PMI Integrated Report 2022. 2022 figure includes Swedish Match net revenues tobacco products expressed in cigarette equivalent units. Data does not include
figure includes portion of net revenues reported after acquisition of Fertin Pharma 9 Data reflects the number of factories operated and owned by PMI at the end of the
from November 11, 2022 (acquisition date), to December 31, 2022. 2021 figure Swedish Match and wellness and healthcare products.
A/S, Vectura Group plc. and OtiTopic, Inc. that took place in the third quarter of 2021. respective year, including Swedish Match and Vectura Fertin Pharma. 2022 factories
excludes the impact related to the Saudi Arabia customs assessments.
4 Including Swedish Match. For definition of available for sale, see Glossary.
7 include
Adjusted R&D expenditure excludes asset acquisition cost related to OtiTopic, Inc. in
eight facilities producing heated tobacco units, two producing other
3 For definition
5 Excluding of netFree.
PMI Duty revenues
Worldrelated to wellness
Bank report issuedand healthcare,
in July 2022 is see
usedpages
on a 205-209 2021. Totalconsumables
smoke-free reported R&D andexpenditure
14 Swedish in 2021owned
Match including these primarily
facilities, items amounted
engagedto
in PMI Integrated
comparative Report
basis for income2022.
level2021 figure includes
classification. portionof
For definition oflow-
net revenues
and inUSD 617 million.of smoke-free products.
the production
reported aftermarkets,
middle-income acquisitionseeofGlossary.
Fertin Pharma A/S, Vectura Group plc. and OtiTopic, 8 Direct spend focuses on materials used in the manufacture of our products; it
Inc. that
6 These took place
indicators are in the thirdbased
calculated quarteronof 2021. of units. For definition of smoke-free
millions includes tobacco leaf, direct materials, and electronic devices and accessories. Data
4 products
Includingand
Swedish Match.tobacco
combustible For definition of available
products, for sale,
see Glossary. see pagesproducts
Smoke-free 205-209 in excludes Swedish Match and Vectura Fertin Pharma.
PMI Integrated
shipment volume Report
includes2022.
volume of smoke-free products that can be converted into 9 Data reflects the number of factories operated and owned by PMI at the end of the
5 cigarette
Excluding PMI Dutyunits,
equivalent Free.such
World Bank report issued
as heat-not-burn, in July
e-vapor, and2022 is used onTotal
oral nicotine. a respective year, including Swedish Match and Vectura Fertin Pharma. 2022 factories
comparative
shipment basis
volume for income
includes level classification.
the listed For definition
smoke-free products as wellof
aslow- and
combustible include eight facilities producing heated tobacco units, two producing other
middle-income
tobacco products:markets, seeand
cigarettes pages 205-209
other tobacco PMI Integrated
inproducts Report
expressed 2022.
in cigarette smoke-free consumables, and 14 Swedish Match owned facilities, primarily engaged
6 equivalent
These indicators are calculated
units. Data based on
does not include millions
Swedish of units.
Match andFor definition
wellness of
and healthcare in the production of smoke-free products.
smoke-free products and combustible tobacco products, see pages 205-209 in PMI
products.
Integrated Report 2022. Smoke-free products shipment volume includes volume of

Read more about PMI’s Business Transformation Metrics

For PMI, sustainability is more than just a means to minimize negative externalities and mitigate
5 risks while maximizing operational efficiency and resource optimization. PMI sees sustainability
as a fundamental opportunity for innovation, growth, and purpose-led, impact-driven,
long-term value creation. Accordingly, PMI works hard to integrate sustainability into every
SUSTAINABILITY aspect of its business and activities.
STRATEGY
PMI’s strategy crystallizes the notion of two distinct forms of social and environmental impacts—
those generated by its products (what it produces) and those generated by its business operations
(how it produces). This approach allows PMI to appropriately highlight that, consistent with its
sustainability materiality analysis results, addressing the social impacts generated by its products
is the core of its strategy.

The company’s approach to sustainability addresses its ESG priorities through eight
impact-driven strategies: four focus on product impacts, another four on impacts derived
from its business operations. The company’s policies, rules, and procedures define its ability
to successfully implement these strategies.
Read more about PMI’s Approach to Sustainability

While cigarette sales today remain the largest part of PMI’s business in most
countries, this is changing rapidly. PMI is actively accelerating the decline in
cigarette smoking beyond what traditional tobacco control measures can
achieve alone. Our stakeholders, who are fundamental both to achieving
our purpose and to determining the pace of our progress, will be affected in
different ways by our company’s transformation. We will seek to engage and
collaborate with all of them in an inclusive manner to speed our transformation
while mitigating negative consequences.
30 Philip Morris International — Integrated Report 2022 Overview Strategy Governance Product impact
—Jacek Olczak, CEO

30 Philip Morris International — Integrated Report 2022 Overview Strategy Governance Product impact

Our 2025 Roadmap

The company’s roadmap outlines its key goals and informs the route of its long-term plan.
6 Our
PMI’s 2025
2025 PMI’s
Roadmap,
2019, outlines our key
first2025
Roadmap
goals
Roadmap
introduced
and
in
informs the
comprises 11 headline
Our roadmap offers straightforward

to its eight strategies. and environmental impacts we aim to achieve

directiongoals,
our stakeholders by clearly outlining the social
to running to the end of 2025, connected
route of our company’s long-term plan.
with these strategies, in relation to both our
11 GOALS–2025Running to the end of 2025, it comprises 11 headline
PMI’s 2025 Roadmap, first introduced in
products and our business operations.

ROADMAP 2019,
PMI’S
goals, each connected 2025
to our eight strategies,ROADMAP
outlines our key goals and informs the
which
Our roadmap offers straightforward direction to
We believe business
our stakeholders can and
by clearly must help
outlining theto achieve
social
aim to address our priority ESG topics identified the UN Sustainable Development Goals (SDGs)
route of our company’s long-term plan. and environmental impacts we aim to achieve
by our sustainability materiality assessment. adopted in strategies,
2015. Accordingly, wetohave
with these in relation bothexplicitly
our linked
You can learn
Running
in
to themore
our each
goals,
about
end of
2021connected
2025,
Sustainability
thisit mapping
comprises
Materiality
to our
exercise
11 headline
Report. which
eight strategies,
PRODUCT IMPACT each of our
products andeight
our strategies to the SDG(s) to which
business operations.
it aligns and can contribute towards achieving.
We believe business can and must help to achieve
aim to address our priority ESG topics identified Goals Priority ESG topics Primary SDGs
the UN Sustainable Development Goals (SDGs)
by our sustainability materiality assessment. adopted in 2015. Accordingly, we have explicitly linked
Intentionally work toward phasing out cigarettes by ensuring
Purposefully Product health
You can learn more about this mapping exercise each1 ofthat
oursmoke-free products
eight strategies to represent at least
the SDG(s) 30% of our shipment
to which
phase out cigarettes impact
in our 2021 Sustainability Materiality Report. it alignsvolumes
and can and more than half of our net revenues by 2025 while
contribute towards achieving.
continuing to reduce our combustible shipment volume
Goals Priority ESG topics Primary SDGs
Develop and commercialize science-based smoke-free alternatives,
Intentionally
making themwork toward
available phasing
in 100 out (of
markets cigarettes
which atbyleast
ensuring
half in
Purposefully 2
that
Product health
Product health
1 low- smoke-free productsmarkets)
and middle-income represent atcontinuing
and least 30% of
to our shipment
increase the impact
phase out the
Maximize cigarettes
benefits volumes and more than half of our net revenues by 2025 while impact
CRTO D U C T

total number of users

of smoke-free products continuing to reduce our combustible shipment volume Sales, marketing,
and consumer
I M PAC T

Deploy robust youth access prevention programs in indirect

3 Develop
retail and commercialize
channels and ensure that science-based
sales of our smoke-free alternatives,
products abide by communications
2 making
our them available
Marketing Codes in 100 markets (of which at least half in Product health
low- and middle-income markets) and continuing to increase the impact
Maximize the benefits total number of users
Seek net positive
of smoke-free impact
products Leverage scientific and development capabilities to generate Sales, marketing,
Innovation in wellness
P R O D UP

4 at least USD 1 billion in annual net revenues from products in

in wellness and healthcare and consumer
I M PAC T

Deploy robust youth access prevention programs in indirect and healthcare

3 wellness and healthcare communications
retail channels and ensure that sales of our products abide by
our Marketing Codes
5 Reduce post-consumer waste and prevent littering by implementing Materials and
Reduce
Seek netpost-
positive impact
comprehensive programs covering all our consumables
Leverage scientific and development capabilities to generate product eco-design
Innovation in wellness
consumer
in wellnesswaste
and healthcare
4 at least USD 1 billion in annual net revenues from products in Post-consumer
Follow eco-design and circularity principles for all smoke-free and healthcare
6 wellness and healthcare
electronic devices waste

5 Reduce post-consumer waste and prevent littering by implementing Materials and

Reduce post- comprehensive programs covering all our consumables product eco-design
Diversity and
Foster an empowered Nurture a more diverse culture that promotes equity and inclusion
consumer waste
OPER ATIONAL IMPACT
and inclusive workplace
7
6 by providing
Follow accessand
eco-design
improving
to lifelong learning
circularity to allfor
principles ourallemployees
gender and local representation in management globally
electronic devices
and
smoke-free
inclusion
Post-consumer
waste capital
Human
development
L IONAL

8
Diversity and
Eradicate
Nurture a systemic childculture
labor inthat
our promotes
tobacco supply
equitychain
Foster anthe
Improve empowered
quality more diverse and inclusion inclusion
Socioeconomic
7 by providing access to lifelong learning to all our employees and
and inclusive
of life workplace
of people in our well-being
I M PAC T

improving
Ensure gender andtobacco
all contracted local representation
farmers makeina management
living income,globally Human capital
of tobacco-farming
supply chain 9 development
OENRAAT

and partner with our direct suppliers to promote a living wage communities
for their workers
8 Eradicate systemic child labor in our tobacco supply chain
Improve the quality Socioeconomic
Tackle climate 10 Achieve carbon neutrality in our operations and accelerate
of life of peoplechange
in our well-being
Climate
O P E R ATOI P
I M PAC T

our decarbonization
Ensure all contractedtoward
tobacconet zero across
farmers make aour value
living chain
income, of tobacco-farming
supply chain 9 and partner with our direct suppliers to promote a living wage
communities
for their workers
Promote biodiversity, address critical water challenges, ensure Biodiversity
Preserve nature 11 no conversion of natural ecosystems, and halt deforestation in
Tackle climate change 10 Achieve
both ourcarbon
tobacconeutrality
and pulpinand
ourpaper
operations
supplyand accelerate
chains Water
Climate
our decarbonization toward net zero across our value chain

Promote biodiversity, address critical water challenges, ensure Biodiversity

Preserve nature 11 no conversion of natural ecosystems, and halt deforestation in
both our tobacco and pulp and paper supply chains Water

Progress on PMI’s 2025 Roadmap is measured with a set of 19 key performance indicators
7 (KPIs) that collectively form PMI’s Sustainability Index. These KPIs are directly linked
to the 11 roadmap goals. The index has allowed PMI’s Board of Directors to enhance the
company’s compensation practices, explicitly linking long-term executive compensation to
SUSTAINABILITY ESG performance.
INDEX

PMI SUSTAINABILITY INDEX

Philip Morris International — Integrated Report 2022 Overview Strategy Governance Product impact Operational impact Fundamentals Reporting and performance 33

PRODUCT IMPACT
Contribution
Philip Morris International — Integrated Report 2022 Overview Strategy Governance Product impact 2022 impact 2022 Fundamentals
Operational 2025 KPI
Reportingtoand
total
performance
Philip Morris International — Integrated Report 2022 Overview
Key Strategy
performance indicators Governance Product impact Operationalperformance
impact Fundamentals Reporting
progress aspirations and performance
weight index score 33
materiality assessment
ty pillar—and, Purposefully phase
1 Smoke-free product shipment ratio (smoke-free/total)¹* 15.1% > 30%
strategies addressing out cigarettes Contribution
cts—is the most heavily
2 Adjusted net revenues ratio (smoke-free/total)²* 32.1%
2022
2022
2022
> 50%
2022
2025
2025 Contribution
KPI
KPI to total
to total index score
Key performance indicators performance progress aspirations weight
Key performance indicators performance progress aspirations weight index score
dex. Consequently,
ainability materiality assessment Number of markets where PMI smoke-free products
materiality assessment 3 73 100
Smoke-free product ratio
shipment ratio (smoke-free/total)¹* 15.1% > 30% > 30%
he majority ofpillar—and,
our are 1
available for sale³*shipment
ustainability
ity pillar—and, Purposefully
Purposefully phase phase
1 Smoke-free product (smoke-free/total)¹* 15.1%
Sustainability
osstrategies
linked to strategies
addressingaddressing out cigarettes
out cigarettes 4
Proportion of markets where smoke-free products are available
Adjusted 42% 32.1% > 50% > 50%
arget
our in 2022. the most heavily
products—is Maximize the benefits 2 for 2 that
sale
Adjusted net are low-net
revenues andrevenues ratio (smoke-free/total)²*
middle-income
ratio markets⁴*
(smoke-free/total)²* 32.1% > 50% 85%
cts—is the most heavily
ptoftothe index. Consequently, of smoke-free products Number ofwhere
markets where PMI products
smoke-free(in products
dex. ascertain
Consequently,the 5 Total
Numbernumber
3 of of users
markets of PMI
PMIsmoke-free
smoke-free products millions)⁵* 24.9 73 100
P R O D UPCRTO D U C T

s across
rs
he on ourthe
majority majority
our of our
forward-
of
3 arefor
are available available
sale³* for sale³*
73 100
s,lons.
theRead
total more
Sustainability ProportionProportion
of shipment volume covered by markets with youth
Sustainability about 6
Proportion
access of markets
4 prevention
of markets where
whereinsmoke-free
programs
smoke-free
products products
retailare
are
available available
91% 42% > 90% > 50%
ychbehind
target of our target in 2022.
eight strategies
in 2022. MaximizeMaximize the benefits
the benefits
4 forare
for sale that salelow-
that low- place in indirect
aremiddle-income
and and middle-income channels⁶
markets⁴* markets⁴*
42% > 50% 85%
85%
he Product
will toattempt
Impact
to the
ascertain the netofpositive
smoke-free
of smoke-free
Seek productsproducts
impact Annual 5 netTotal
ofnumber
revenue ofofPMI
from users ofand
wellness PMIhealthcare
smoke-free products
productsproducts (in millions)⁵* 24.9
PRODUCT

pt ascertain 75 Total number users smoke-free (in millions)⁵* 24.9

0.3 ≥1
nsese of factors
this report.
on our forward- in wellness and healthcare (in billions USD)⁷*
rs on our forward- Proportion of shipment volume covered by markets with youth
> 90% > 90%
nd aspirations. Read more about Proportion
6 of shipment volume covered by markets with youth 91%
ons. Read more about 6 access
access prevention
Proportion prevention
programs
of shipment programs
in place
volumes inin
covered place
indirect in indirect
retail
by markets withretail channels⁶
channels⁶
91%
ghts
ch of foroureach of strategies
eight our eight strategies 8 68% ≥80%
anti-littering programs in place for combustible cigarettes
Seek netSeek net positive
impact impact
boxes in theImpact
Product Impact Annual netfrom
revenue fromand
wellness and healthcare products
he Product positive Annual 7 net of
Proportion revenue
shipment wellness
volume coveredhealthcare
by marketsproducts
with end-of- 0.3 ≥1
act sections
published
ns of of this report.
alongside
this report. in wellness and healthcare 97 (in billions USD)⁷* 0.3
8.5% ≥1
≥80%
in wellness and healthcare (in billions USD)⁷*
life take-back programs in place for smoke-free consumables⁸
provides details about Reduce post-consumer waste 15%
ProportionProportion
of PMI smoke-free
of volumesdevices
shipment volumesbycovered
In conjunction with the 10 Proportion
8 of shipment covered marketsbywith
markets with n/a 68% 1 ≥80%
otocol 8 with eco-design certification⁹ in place for combustible cigarettes
anti-littering
anti-littering programs programs
in place for combustible cigarettes
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are also publishing PMI’s
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publishedpublished
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or repaired
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life take-back programs in place for smoke-free consumables⁸
Reduce Reduce post-consumer
waste waste
I included
ort in the index.
2021,details
provides details about 15%
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ts
ityfor efforts
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e KPIs even more
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iling definition, scope, scope, 11 157 1,000
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2021
senior since 2021 (in thousands)
(in 10thousands)
roles 30.5% 35%
PI the index. Foster an empowered
on accounts for efforts
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and inclusive performance
workplace OPER ATIONAL IMPACT
performance
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KPIsthese
esubject KPIs even more robust.
toeven more robust. to structured lifelong learning offers
L IONAL

d 3) in 2022 is subject to external Cumulative number of human rights impact assessments

n Statement for scope 1+2 14
12 12 Proportion
Proportion
conducted of women
since
of women
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senior in senior
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metrics verified here). Foster
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13
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OENRAAT

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ons here.
of units. For definition of smoke-free
O P E R AT I O N A L

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15 farmers supplying
tobacco totobacco
PMI to PMI
0.1% 0%
O P E R ATOI P

022.
d basedproducts,
on millions of Glossary.
units. For definition of smoke-free
Tackle climate
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our supply farmers supplying
CO2e scope 3 absolute reduction versus 2019
ke-free
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ions of units. For definition
see Glossary.
of smoke-free
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enues from November
, see Glossary. Smoke-free11, 2022
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ume of smoke-free products that can be converted into
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ot include Swedish Match and wellness and healthcare
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ke-free Glossary.
Match net revenues from November 11, 2022
Operational Sustainability performance 18 baseline
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with with science-based
science-based target) target)
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enues from November 11, 2022
r 31,and
ness 2022. healthcare, see Glossary. 50%
which must be met by each market to be
rld Bank
tplace.
issuedShipment
report issued
volume inincludes
July 2022 is used on a
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tobacco purchased at deforestation
at no risk of no risk of deforestation
of of
Preserve nature 100%
in July 2022 is used
or level classification. For definition of low- and
disposables.
PreserveIndex
nature 19 19
managed natural 55% 55% 100%
andforest and no conversion
of natural of natural ecosystems
tion. For definition of low- and 13
Glossary.
er either a type 1 or type 2 and/or type 3 PMI Sustainability managed natural forest no conversion ecosystems 13 100%
users.
d by ISO See14020:2022,
Glossary. as constituting an
sary.
es cigarettes, OTPs, and smoke-free product
TPs, and smoke-free product
d 94% of PMI’s total workforce, as they
related
alary to wellness and healthcare, see Glossary.
continuation.
Operational
Operational Sustainability
Sustainability performance
performance 100% 100%
33% 33%
ness and healthcare, see Glossary.
nimum
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highest must
risksbe metaby
from each market to be
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which must be met by each market to be
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ges, andas
in place.such
parameters
e-vapor
Shipment
disposables.
volume includes heated
as PMI’s
volume includes heated Key Target missed Target met PMI acquisition of Swedish Match
profile, determined by internationally
or disposables.
PMI Sustainability
PMI Sustainability Index Index 100%
Our plans for 2022 included putting in place a methodology and aspiration for the number of users of our smoke-free 100%
we may consider either a type 1 or type 2 and/or type 3
er either a type 1 or type 2 and/or type 3
ments as defined by ISO 14020:2022,
1+2 as constituting an
de bypartially excluded
ISO 14020:2022, from as scope
constituting an Target partially met Target exceeded
f PMI’s retail stores (representing approx.
ta cover
cluded in around
the 94%1+2
scope of emissions.
PMI’s total workforce, as they
d 94% of PMI’s total workforce, as they
products. However, following the acquisition of Swedish Match in late 2022 and its material impact on our business, we are
and those on salary continuation.
station
salary Manifesto.
continuation.
untries which are assessed as highest risks from a human now integrating it and assessing how to move forward with a comprehensive methodology that considers a new category.
re assessed as highest risks from a human
etermined based on key parameters such as PMI’s
d on key parameters such as PMI’s Key Key Target missed
Target missed Target met Target met
PMI acquisition
PMI acquisition of Swedish
of Swedish Match Match
uman rights risk profile, as determined by internationally
profile, as determined by internationally
IQOS stores are partially excluded from scope 1+2
re partially excluded from scope 1+2 Target
Target partially metpartially met Target exceeded
Target exceeded
Our plans Our plans included
for 2022 for 2022putting
includedin putting in place a methodology
place a methodology and aspiration
and aspiration for theofnumber
for the number users ofofour
users of our smoke-free
smoke-free
022, a portion of PMI’s retail stores (representing approx.
of PMI’s retail stores (representing approx.
a) have been included in the scope 1+2 emissions. products. However, following the acquisition of Swedish Match in late 2022 and its material impact
products. However, following the acquisition of Swedish Match in late 2022 and its material impact on our business, on ourwebusiness,
are we are
cluded in the scope 1+2 emissions.
MI’s Zero Deforestation Manifesto.
estation Manifesto. now integrating
now integrating it and how
it and assessing assessing howforward
to move to movewith
forward with a comprehensive
a comprehensive methodology
methodology that aconsiders
that considers a new category.
new category.

I’m proud to be able to say that our executive compensation program

reflects our commitment to put sustainability at the core of our corporate
strategy. PMI’s Sustainability Index aligns us even further with the interests
of shareholders and other stakeholders, forming a strong link between our
04
executive compensation practices and the company’s short- and long-term
Philip Morris International — Integrated Report 2022
ESG performance.
—Emmanuel Babeau, Chief Financial Officer

2022 highlights
8 P R O D U C T I M PA C T

ESG
PERFORMANCE
HIGHLIGHTS

24.9 m 32.1% 73
Estimated total adult users of Of net revenues derived from Markets where PMI smoke-free products
PMI’s smoke-free products smoke-free products are available for sale, of which 42% in
(2021: 21.7 m)1 (2021: 29.5%)2 low- and middle-income countries
SOCIAL

(2021: 71, 42%)3

USD 10.7 bn 91% USD 0.3 bn

Cumulative investment behind Of total shipment volume covered by Annual net revenue from wellness
smoke-free products since 2008 youth access prevention programs and healthcare products
(2021: USD 9.2 bn)4 in indirect retail channels (2021: USD 0.1 bn)
(2021: 91%)5

86% 68% 8.5%

ENVIRONMENT

Recycling rate of IQOS devices Of shipment volume covered by Of shipment volume covered
returned to our centralized recycling markets with anti-littering programs by markets with smoke-free
hubs (weighted-average percentage in place for combustible cigarettes consumables take-back programs7
of each device that is recycled)
(2021: 86%)6

O P E R AT I O N A L I M PA C T

40.7% 7
SOCIAL

Of management positions held by women, Human rights impact assessments conducted

exceeding our 2022 target of 40% since 2018 in highest-risk countries
(2021: 39.7%) (2021: 5)
ENVIRONMENT

55% Triple A
Proportion of tobacco purchased at no risk of net deforestation Score from CDP for climate,
of managed natural forest and no conversion of natural ecosystems forest, and water security for
(2021: 37%) the third consecutive year

1 Figures pertain to total IQOS users. See Glossary.

21 Figures
For definition
pertainof to
nettotal
revenues relatedSee
IQOS users. to pages
smoke-free products,
205-209 in PMIsee Glossary.Report
Integrated 2022 figure
2022.includes Swedish Match net revenues from November 11, 2022 (acquisition date)
to December
2 For definition31, 2022.
of net 2021 data
revenues exclude
related the impactproducts,
to smoke-free related tosee
thepages
Saudi205-209
Arabia customs assessments.
in PMI Integrated Report 2022. 2022 figure includes Swedish Match net revenues from
November
3 Including 11, 2022
Swedish (acquisition
Match date), to
and excluding PMIDecember 31,Classification
Duty Free. 2022. 2021 of data exclude
low- the impact related
and middle-income to theisSaudi
countries basedArabia customs
on World Bankassessments.
report issued in July 2022.
43 Including
InvestmentsSwedish
reflectMatch andproduct
research, excludingandPMI Duty Free.
commercial Classificationproduction
development, of low- andcapacity,
middle-income countries
scientific is basedand
substantiation, on studies
World Bank report
on adult issued
smoker in July 2022.
understanding.
54 Investments
Total shipment reflect
volume research,
includesproduct andother
cigarettes, commercial
tobaccodevelopment, production
products (OTPs), capacity, product
and smoke-free scientificconsumables,
substantiation,
Seeand studies
PMI’s ESGon adult
KPI smoker
Protocol understanding.
2022 for further details.
65 Total shipment
Recycling volume includes
rate: percentage of thecigarettes, otherdevice
weight of each tobacco products
that (OTPs),
is recycled, and smoke-free
weighted-average product consumables,
depending on device type See PMI’s
and ESG KPI
processing Protocol
facility 202280%
(includes for further details.
recycling and 6% energy
6 Recycling rate: percentage of the weight of each device that is recycled, weighted-average depending on device type and processing facility (includes 80% recycling and 6% energy
recovery). 2022 data cover CIRCLE hubs in Hungary and Japan.
recovery). 2022 data cover CIRCLE hubs in Hungary and Japan.
77 Shipment
Shipment volume
volumeincludes
includesheated
heatedtobacco
tobaccounits,
units,e-vapor
e-vaporcartridges,
cartridges,and
ande-vapor
e-vapordisposables.
disposables.See
SeePMI’s
PMI’sESG
ESGKPIKPIProtocol
Protocol 2022
2022for further
for further details.
details.

Read more about how PMI measures ESG performance in its ESG KPI Protocol

Read PMI’s Sustainability Index and ESG KPI Protocol

9 As PMI strives to remain at the forefront of a fast-evolving

environmental, social, and governance (ESG) reporting
landscape, the company released its first-ever TCFD Report
TASK FORCE ON to respond to the implementation guidance of the Task Force on
CLIMATE-RELATED Climate-related Financial Disclosures (TCFD).
FINANCIAL
The report’s findings were informed by a structured Climate
DISCLOSURES
Change Risk and Opportunity (CCRO) assessment that PMI
(TCFD) REPORT conducted in 2022, with guidance from an external expert
2022 organization and in line with TCFD’s recommendations, to
identify relevant climate-related risks and opportunities.

Low-Carbon Transition Plan  MI’s Ambition on Biodiversity

P Reduce Post-Consumer
(2021) and Water (2022) Waste Strategy (2022)

We are acutely aware that climate change presents an increasing range

of risks to all of PMI’s operations, and so we remain committed as ever to
decarbonizing our direct and indirect operations—in line with the path set by
the Paris Climate Agreement. We understand that it is essential, for the planet
and for our business, that we manage, mitigate, and adapt to climate change.
—Scott Coutts, Senior Vice President Operations

As a strong complement to the content and data included in PMI’s 2022 Integrated Report,
10 the company has developed 12 case studies and market stories that showcase impact and
highlight how PMI affiliates worldwide drive sustainability. All case studies and market stories
are available here.
PMI
SUSTAINABILITY
AROUND
THE WORLD

  BIODIVERSITY AND WATER   DECARBONIZATION

Indonesia Indonesia

  FUTURE OF WORK   HEALTH & SAFETY

PMI Turkey

  HUMAN RIGHTS   HUMAN RIGHTS

Brazil Malaysia

  POST-CONSUMER WASTE   POST-CONSUMER WASTE

Italy Slovakia

  POST-CONSUMER WASTE   WELL-BEING

Switzerland​ PMI

  WOMEN EMPOWERMENT   YOUTH ACCESS PREVENTION

Pakistan Thailand

Read all PMI’s Case Studies and Market Stories

WANT TO KNOW MORE?

Read Integrated Report 2022

Subscribe to the Sustainability Newsletter

www.pmi.com/sustainability

LEARN MORE ABOUT PMI’S APPROACH TO SUSTAINABILITY

 riefing paper
B  usiness
B  MI’s Celebrating
P PMI’s ESG ighlights
Climate Justice in Transformation 10 years of the ALP
Global Supply Chains: Linked Financing program
A perspective for the Framework
private sector

HEADQUARTERS OPERATIONS CENTER

Philip Morris International Inc. Philip Morris Products S.A.
677 Washington Blvd, Avenue de Rhodanie 50
Suite 1100 1007 Lausanne
Stamford, CT 06901 Switzerland
United States
www.pmi.com
www.pmi.com www.pmiscience.com

This document should be read in conjunction with the Philip Morris International Inc. Integrated Report 2022, integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also
available on www.pmi.com. Key terms and definitions are set forth in the Integrated Report Referenced above. subject to the lower predictability of our reducedrisk product category’s performance.
PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI’s
Forward-looking and cautionary statements Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2022. PMI cautions that the
foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does
This report and related materials contain projections of future results and goals and other forward-looking not undertake to update any forward-looking statement that it may make from time to time, except in the normal
statements, including statements regarding business plans and strategies. Achievement of future results is course of its public disclosure obligations.
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 Notes
Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results In this report, “PMI,” “we,” “us,” and “our” refer to Philip Morris International Inc. and its subsidiaries.
and outcomes to differ materially from those contained in any forwardlooking statements made by PMI.
In this report and in related communications, the term “materiality,” “material,” and similar terms, when used in
PMI’s business risks include: excise tax increases and discriminatory tax structures; increasing marketing and the context of economic, environmental, and social topics, are defined in the referenced sustainability standards,
regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult and are not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures
consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use required by the U.S. Securities and Exchange Commission.
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 This report contains references and links to websites operated by third parties. These references are provided
economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences as a convenience to you and as an additional avenue of access to the information contained in those sources;
of Russia’s invasion of Ukraine; changes in adult smoker behavior; the impact of COVID-19 on PMI’s they should not be viewed as an endorsement by us of the content of these references and linked sites or
business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental opinions of their authors.
investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to Unless otherwise stated, all references to IQOS are to our IQOS heat-not-burn devices and consumables.
repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and Trademarks and service marks in this report are the registered property of, or licensed by, the subsidiaries of
quality of tobacco and other agricultural products and raw materials, as well as components and materials for Philip Morris International Inc., and are italicized or shown in their logo form.
our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies.
Estimates for total industry volume and market share in certain geographies reflect limitations on the availability
PMI’s future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and and accuracy of industry data during pandemic-related restrictions.
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 Aspirational targets and goals do not constitute financial projections, and achievement of future results is
improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio subject to risks, uncertainties, and inaccurate assumptions, as outlined in our forward-looking and cautionary
internally or through acquisitions and the development of strategic business relationships; if it is unable to statements on page 210 of this report.
attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully This integrated report should be read in conjunction with PMI’s ESG KPI Protocol 2022.