Philip Morris International | Interfaith Center on Corporate Responsibility

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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Philip Morris International</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Environment </p>
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<strong>Focus Area:</strong>
<p>Pollution </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>WHEREAS:</strong>  Tobacco is a well-documented threat to human health. Less well known is its contribution to global plastic pollution. Cigarette filters are a form of single-use plastic. </p>
<p>Plastic, with a lifecycle social cost at least ten times its market price, threatens the world’s oceans, wildlife, and public health.[1] Concern about the growing scale and impact of global plastic pollution has elevated the issue to crisis levels.[2] Of particular concern is single-use plastic,[3] which makes up the largest component of the 24-34 million metric tons of plastic ending up in waterways annually.</p>
<p>Cigarette butts with plastic acetate filters are the most littered item globally with an estimated 4.5 trillion discarded annually, which results in an estimated 300,000 tons of plastic microfibers released each year into the environment. Cigarette filters do not biodegrade and can remain in the environment indefinitely in the form of microplastics. Discarded cigarette filters can contain more than 15,000 plastic microfibers and thousands of toxic chemicals. When cigarette filters are littered on streets and beaches, they can leach harmful pollutants into soil and water, including heavy metals and nicotine, which are toxic to fish and other sea creatures.[4]  At concentrations of one cigarette butt per liter of water, testing indicates the toxins are lethal to small fish and planktonic organisms.[5]</p>
<p>Annual cleanup costs for littered filters are significant, including $2.6 billion for China and $766 million for India.[6] Cleanup costs have traditionally been borne by taxpayers rather than the industry placing these problematic products on the market. As a producer of plastic waste, our Company should take more financial responsibility for the cleanup of its cigarette filter/butt waste. The European Union’s Single-Use Plastics Directive imposes Extended Producer Responsibility (EPR) on tobacco producers to cover the costs of collecting and processing cigarette filters; Denmark, France, and Spain have already imposed cleanup fees.[7] </p>
<p>More than 100 companies support EPR laws requiring them to finance the collection of waste packaging to keep plastics from becoming uncontrolled waste.[8] U.S. EPR tobacco laws to cover the costs of collecting and treating butt filters would address the pollution problem and create a level playing field for cigarette manufacturers. In the interim, Philip Morris International should voluntarily contribute funding to U.S. state or municipal governments to finance existing filter collection and cleanup efforts where they are not adequately funded.</p>
<p><strong>BE IT RESOLVED: </strong> Shareholders request that Philip Morris issue a public report, at reasonable expense and excluding proprietary information, assessing the reputational, financial, and operational risks associated with failing to take responsibility for filter cleanup costs and the benefits to the Company of promoting extended producer responsibility laws for spent tobacco filters.</p>
<p>[1] https://wwfint.awsassets.panda.org/downloads/wwf_pctsee_report_english.pdf </p>
<p>[2] https://www.unep.org/resources/pollution-solution-global-assessment-marine-litter-and-plastic-pollution </p>
<p>[3] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L0904&from=EN#page=8 </p>
<p>[4] https://fingfx.thomsonreuters.com/gfx/legaldocs/gdpzqykgevw/Cigarette%20Litter%20Complaint%20filed%20copy.pdf;  https://www.who.int/publications/i/item/9789240051287; https://oceanconservancy.org/wp-content/uploads/2023/06/ICCCharter-REDUCE-Report-2023-TFSOceanConservancy.pdf</p>
<p>[5] https://pmc.ncbi.nlm.nih.gov/articles/PMC3088407</p>
<p>[6] https://www.who.int/publications/i/item/9789240051287 </p>
<p>[7] https://www.europarl.europa.eu/doceo/document/E-9-2023-000787_EN.html#:~:text=The%20Single%2DUse%20Plastics%20Directive,incentivising%20consumers%20about%20responsible%20behaviour</p>
<p>[8] https://www.ellenmacarthurfoundation.org/news/100-leading-businesses-call-for-epr-for-packaging</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”>Mr. Conrad MacKerron</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>As You Sow</span></div>
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Resolution Details

Company:

Philip Morris International

Year:

2024

Issue Area:

Lobbying & Political Contributions

Focus Area:

Tobacco

Status:

Filed

Resolution Text

WHEREAS, we believe in full disclosure of Philip Morris International’s (“PMI”) direct and indirect lobbying activities and expenditures to assess whether the company’s lobbying is consistent with its expressed goals and in shareholders’ best interests.

RESOLVED, the shareholders of Philip Morris International request the preparation of a report, updated annually, disclosing:

List of PMI payments for (a) direct or indirect lobbying or (b) grassroots lobbying communications, including the amount of the payment and recipient at the local, state (in the United States) and country levels.
Company policy and procedures governing grassroots lobbying communications.

The report shall be presented to the Nominating and Corporate Governance Committee and posted on PMI’s website.

SUPPORTING STATEMENT: The tobacco industry’s longstanding role working to block laws and regulations that would protect citizens’ health is well documented around the world.[1] We believe PMI faces considerable reputational risk if it is not fully transparent about the lobbying it does and positions it promotes, especially related to tobacco. Companies like Altria have recently expanded their public reporting on lobbying they do directly and through third parties like trade associations.

Philip Morris International does not disclose its payments to trade associations and social welfare organizations, or amounts for lobbying at the country level and (in the case of the United States, state levels). including grassroots lobbying. Grassroots lobbying does not get reported in the United States under the federal Lobbying Disclosure Act, and disclosure is uneven or absent in states.

PMI recently expanded its lobbying activities in the US at the state level, since being authorized by the FDA to market its heated tobacco product IQOS in the US.

Controversy followed PMI’s establishment in 2017 and full funding of the 501c3 Foundation for a Smoke-Free World. Research by the University of Bath’s Tobacco Control Research Group found that much of the Foundation’s work “produced research and opinion which supports tobacco industry interests by side-lining evidence-based tobacco control measures and endorsing interventions which ensure the sale of industry products; advocating for tobacco industry involvement in science and policymaking; and misrepresenting evidence on tobacco and nicotine products.” PMI made its final grant payment of US$122.5 million to the Foundation in September 2023. [2]

The Secretariat for WHO’s Framework Convention on Tobacco Control, in preparation for the November 2023 Conference of Parties to the Convention “noted with concern that some Parties have been approached by the tobacco and other industry representatives, to offer travel and technical support, including advisors, for their official delegations” and to “remain vigilant in respect of any offer of support received from the tobacco industry.” [3] The Guardian reported that PMI “is waging a big lobbying campaign to prevent countries from cracking down on vapes and similar products”[4] for the Session.

We support greater transparency of PMI’s lobbying expenditures and activities in order to mitigate potential reputation and misalignment risks.

[1] https://www.uicc.org/news/tobacco-industry-interference-policy-decisions-undermines-effective-control, https://ncdalliance.org/sites/default/files/resource_files/NCDs_and_tobacco_Industry.pdf, https://www.phrp.com.au/issues/online-early/how-tobacco-companies-use-the-revolving-door-between-government-and-industry-to-influence-policymaking-an-australian-case-study/

[2] https://tobaccocontrol.bmj.com/content/early/2023/05/02/tc-2022-057667

[3] https://fctc.who.int/newsroom/news/item/14-08-2023-call-for-parties-to-remain-vigilant-in-preparation-for-the-cop10-and-the-mop3

[4] https://www.theguardian.com/business/2023/oct/12/philip-morris-lobbying-to-stop-who-attack-on-vapes-and-similar-products

Resolution Details

Company:

Philip Morris International

Year:

2023

Issue Area:

Inclusiveness

Focus Area:

Equal Employment Opportunity (EEO)

Status:

Withdrawn for Agreement

Resolution Text

BE IT RESOLVED: Shareholders request that Philip Morris International Inc. (“Philip Morris”) report to shareholders on the effectiveness of the Company’s diversity, equity, and inclusion efforts. The report should be done at reasonable expense, exclude proprietary information, and provide transparency on outcomes, using quantitative metrics for hiring, retention, and promotion of employees, including data by gender, race, and ethnicity.

SUPPORTING STATEMENT: Quantitative data is sought so investors can assess and compare the effectiveness of the Company’ diversity, equity, and inclusion programs.

WHEREAS: Philip Morris has not released its consolidated EEO-1 form, nor has it shared sufficient quantitative hiring, retention, and promotion data to allow investors to determine the effectiveness of its human capital management programs.

94 percent of the S&P 100 and 33 percent of the Russell 1000 have released, or have committed to release, their EEO-1 forms, a best practice in diversity data reporting. Between September 2020 and September 2022, S&P 100 companies increased by 298 percent their release of hiring rate data by gender, race, and ethnicity; retention rate data by 481 percent; and promotion rate data by 300 percent.[1] Companies that release, or have committed to release, more inclusion data than Philip Morris include Altria Group, Procter & Gamble, and Wal-Mart.

Numerous studies have pointed to the benefits of a diverse workforce. Their findings include:

There is a positive association between diversity in management and cash flow, net profit, revenue, and return on equity.[2]
Companies in the top quartile for gender diversity are 21 percent more likely to outperform on profitability.[3]
The 20 most diverse companies had an average annual five-year stock return that was 5.8 percentage points higher than the 20 least diverse companies.[4]

Hiring, promotion and retention rate data show how well a company manages its workforce diversity.

Companies should look to hire the best talent. However, Black and Latino applicants face hiring challenges. Results of a meta-analysis of 24 field experiments found that, with identical resumes, White applicants received an average of 36 percent more callbacks than Black applicants and 24 percent more callbacks than Latino applicants.[5]

Promotion rates show how well diverse talent is nurtured at a company. Unfortunately, women and employees of color experience “a broken rung” in their careers; for every 100 men who are promoted, only 86 women are. Women of color are particularly impacted, comprising 17 percent of the entry-level workforce and only four percent of executives.[6]

Retention rates show whether employees choose to remain at a company. Morgan Stanley has found that employee retention above industry average can indicate a competitive advantage and higher levels of future profitability.[7] Companies with high employee satisfaction have also been linked to annualized outperformance of over two percent.[8]

[1] https://www.asyousow.org/our-work/social-justice/workplace-equity

[2] https://www.asyousow.org/report-pages/workplace-diversity-and-financial-performance

[3] Ibid

[4] https://www.wsj.com/articles/the-business-case-for-more-diversity-11572091200

[5] https://hbr.org/2017/10/hiring-discrimination-against-black-americans-hasnt-declined-in-25-years

[6] https://wiw-report.s3.amazonaws.com/Women_in_the_Workplace_2021.pdf

[7] https://www.morganstanley.com/im/publication/insights/articles/article_culturequantframework_us.pdf

[8] https://www.institutionalinvestor.com/article/b1tx0zzdhhnf5x/Want-to-Pick-the-Best-Stocks-Pick-the-Happiest-Companies?utm_medium=email&utm_campaign=The%20Essential%20II%20100721&utm_content=The%20Essential%20II%20100721%20CID_eb103a9e15359075f72a85f7ff534c79&utm_source=CampaignMonitorEmail&utm_term=Want%20to%20Pick%20the%20Best%20Stocks%20Pick%20the%20Happiest%20Companies

Resolution Details

Company:

Philip Morris International

Year:

2023

Issue Area:

Health

Focus Area:

Tobacco

Status:

Vote

Vote Percentage:

3.20%

Resolution Text

RESOLVED: Shareholders request the Board take steps to preserve the health of its customers by making available to them information on the nicotine levels for each of our brands, including heated tobacco products, how those levels are determined, and begin reducing nicotine levels in our brands to a less addictive level.

WHEREAS: According to the World Health Organization, an estimated 1.3 billion people worldwide use tobacco products, 80% of whom are in low- and middle-income countries;

Philip Morris International (“PMI”) states on its website: “Nicotine is a naturally occurring chemical in the tobacco plant, and is one of the reasons why people smoke cigarettes. Nicotine is addictive and is not risk free;”[1]

According to the United States Food and Drug Administration (“FDA”): “All tobacco products contain nicotine including cigarettes, non-combusted cigarettes, cigars, smokeless tobacco, hookah tobacco and most e-cigarettes. Using any tobacco product can lead to nicotine addiction. This is because nicotine can change the way the brain works, causing cravings for more of it. Some tobacco products are designed to deliver nicotine to the brain within seconds, making it easier to become dependent on nicotine and more difficult to quit. Nicotine is what keeps people using tobacco products. However, it’s the thousands of chemicals contained in tobacco and tobacco smoke that make tobacco use so deadly. Some of these chemicals, known to cause lung damage, are also found in some e-cigarette aerosols;”[2]

PMI’s “Marlboro’s volume outside the United States and China was 233 billion cigarettes, reinforcing its leadership position as the number-one cigarette brand worldwide.” [3] The company announced that its non-combusted, heated tobacco product IQOS volume growth increased 22% year over year in Q3 2022 and that it is paying the Altria Group $2.7 billion (pre-tax) in exchange for the ability to market IQOS in the U.S., effective April 30, 2024; [4]

The European Commission wants to ban sales of all flavored heated tobacco products [5] and the FDA has proposed a rule “that would establish a maximum nicotine level in cigarettes and certain finished tobacco products;”[6]

A report by the Bureau of Investigative Journalism[7] found that PMI “is drastically misleading consumers about the amount of nicotine in its range of IQOS heated tobacco products… in some promotional material, and to Bureau staff posing as consumers, PMI has claimed there is 0.5mg of nicotine in each tobacco stick, but new research conducted by the Bureau has revealed the actual figure is more than eight times higher;”

PMI disputed the Bureau’s claim, saying that the Bureau conflated the measure of nicotine emission (what a person breathes in) and nicotine content. The Bureau recognized that without any clear universal regulation as to which figure should be used and how it should be described, consumers will continue to be misled;

In its Q3 2022 presentation to investors, PMI said ‘there was no notable difference in the nicotine absorption between cigarettes and IQOS.”[8]

[1] https://www.pmi.com/glossary-section/glossary/nicotine

[2] https://www.pmi.com/glossary-section/glossary/nicotine

[3] https://www.pmi.com/investor-relations/overview/building-leading-brands

[4] https://philipmorrisinternational.gcs-web.com/static-files/88d67ac2-85a8-4509-bbec-e061490b43ac

[5] https://www.politico.eu/article/european-commission-want-ban-heated-tobacco-product/

[6] https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202204&RIN=0910-AI76

[7] https://www.thebureauinvestigates.com/stories/2022-08-28/philip-morris-misleading-public-about-nicotine-in-heated-tobacco

[8] https://philipmorrisinternational.gcs-web.com/static-files/88d67ac2-85a8-4509-bbec-e061490b43ac

Producer Responsibility for Plastic Cigarette Butts

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