Defining sustainability priorities
Our approach to sustainability is anchored in a comprehensive materiality assessment that serves as a strategic business tool for identifying our sustainability priorities. This robust process, implemented since 2016, enables us to make informed decisions that drive business value while meeting stakeholder expectations. Since 2021, our adoption of "double materiality" has strengthened our ability to evaluate sustainability matters through both impact and financial lenses, helping us identify opportunities for growth and differentiation while managing potential risks. Each iteration has enhanced our strategic capabilities, and in 2024, we further strengthened our approach by integrating regulatory requirements, notably the EU Corporate Sustainability Reporting Directive (CSRD), while leveraging our Enterprise Risk Management program to evaluate the financial implications of sustainability matters in a systematic fashion. Read more here.
The outcome of our sustainability materiality assessment serves as a strategic blueprint that informs our business strategy, ensuring sustainability as an outcome is aligned with long-term value creation. While focusing primarily on topics material to future-proof our business success, we also consider multiple stakeholders, including ESG rating agencies. Our analysis of material topics reflect both their outward impact and their strategic business implications, from risk exposure to market opportunities, ensuring our sustainability priorities directly support our business objectives and competitive advantage.
Governance and incentives
We embed sustainability as a core driver of business value through a strategic governance framework that ensures accountability and execution at every organizational level. Our Chief Sustainability Officer (CSO), reporting to the Chief Financial Officer, spearheads the integration of sustainability into our corporate strategy, regularly briefing the Sustainability Committee and Board of Directors on progress and strategic implications. To drive this integration, our Sustainability Index, linked to 30 percent of our performance-based long-term equity award, incentivizes management to consider multiple forms of capital—financial, natural, intellectual, social, and human—when developing programs, ensuring comprehensive value creation and risk management.
Through a cross-functional Sustainability Performance Group, our CSO orchestrates collaboration across departments to capture emerging opportunities and manage risks. The Sustainability Team drives strategic planning through sustainability materiality assessments, develops implementation roadmaps, and ensures cohesive execution across business units and markets. Program-specific working groups coordinate initiatives to maximize business impact and operational efficiency. At regional and market levels, dedicated sustainability coordinators ensure strategic alignment while adapting initiatives to local business contexts and tracking performance against key metrics.
Policies and commitments
Our strategic approach to value creation is guided by a comprehensive framework of sustainability commitments and policies that inform decision-making and risk management across our organization. These policies, covering critical business areas from environmental
stewardship and supply chain resilience to human rights protection, serve as guardrails for sustainable business practices and are available on PMI.com.
This framework complements and reinforces PMI's Code of Conduct, which establishes rigorous standards for ethical business conduct, supported by additional internal policies and guidelines. Together, these instruments enable us to build trust with stakeholders
while protecting and enhancing our business value across multiple dimensions.
Setting aspirations
Our business strategy integrates sustainability through carefully calibrated targets and aspirations outlined in our 2025 Roadmap. These strategic priorities emerge from a rigorous process that synthesizes results from our sustainability materiality assessments, emerging global trends, regulatory requirements, and stakeholder expectations, enabling us to identify both risks and opportunities that impact long-term value creation.
Rather than viewing sustainability merely through a compliance or risk management lens, we leverage it as a catalyst for operational excellence, innovation, and competitive advantage. Our approach embeds sustainability considerations into core business operations, enhancing organizational resilience while driving efficiency and stakeholder value. This strategic integration recognizes the systemic nature of sustainability challenges and their interconnections with business success. Through robust governance mechanisms and processes, we ensure our aspirations and targets strike the right balance between ambition and achievability, acknowledging that while not all factors are within our direct control, we can meaningfully drive progress within our sphere of influence.
Performance management and strategy execution
Our strategic sustainability objectives are realized through initiatives and programs that drive measurable progress toward our aspirations. These activities are strategically integrated across business functions, ensuring sustainability becomes embedded in our operations and DNA rather than existing as standalone efforts.
While executing our strategy internally, we amplify our impact through multistakeholder initiatives, partnerships, and industry collaborations that can accelerate systemic change. To ensure accountability and drive continuous improvement, we maintain a robust performance measurement framework with clearly defined KPIs that are tracked and reported both internally and externally.
Connectivity and trade-offs
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This online content about our Integrated Report should be read in conjunction with PMI’s Integrated Report 2024. This report includes metrics that are subject to uncertainties due to inherent limitations in the nature and methods for data collection and measurement. The precision of different collection and measurement techniques may also vary. This report includes data or information obtained from external sources or third parties. Unless otherwise indicated, the data contained herein cover our operations worldwide for the full calendar year 2024 or reflect the status as of December 31, 2024. Where not specified, data comes from PMI financials, nonfinancials, or estimates.
Unless explicitly stated, the data, information, and aspirations in this report do not incorporate PMI’s wellness and healthcare business, Aspeya. Regarding the Swedish Match acquisition, completed late 2022, unless otherwise indicated, this report includes information pertaining to its sustainability performance. Please also refer to "This report at a glance" on page 2 of the PMI’s Integrated Report 2024 for more information. Aspirational targets and goals do not constitute financial projections, and achievement of future results is subject to risks, uncertainties and inaccurate assumptions, as outlined in our forward-looking and cautionary statements on page 206. In PMI’s Integrated Report 2024 and in related communications, the terms “materiality,” “material,” and similar terms are defined in the referenced sustainability standards and are not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures required by the U.S. Securities and Exchange Commission.