Megatrends
Global trends intersect with our strategies and initiatives and inform how we interact with the external environment. Several trends existed before COVID-19, including political conflict and war (and their far-reaching impacts), but have been amplified and accelerated by the global pandemic, which disrupted supply chains and business operations and heightened the impact of certain trends.
Healthier lifestyles
Read moreHealthier lifestyles
Society is more attuned to mental well-being and physical health, leading to a push for more health-conscious choices, active lifestyles, mental health support, and improved nutrition. Businesses are expected to expand and shift their portfolios to incorporate new services and product offerings that contribute to better health, paying attention to the evolving needs of each generation. Moreover, to attract, retain, and optimize talent, employers are expected to prioritize mental and physical well-being in the workplace, an issue that has grown more complex with the increased prevalence of remote and hybrid work.
Capitals impacted
Drivers
- Demographic shifts
- Consumer preferences
- Public health policy and regulation
- Employee expectations
How we are responding
- Initiating portfolio shifts driven by consumer centricity insights
- Implementing workplace health and wellbeing programs and initiatives
Strategy
Climate and nature urgency
read moreClimate and nature urgency
Climate change, biodiversity loss, deforestation, water insecurity, and other ecological crises threaten more than supply chains and physical infrastructure; they endanger progress and business growth by exacerbating system-level disruptions that affect our stakeholders. Policy, regulatory, civil society, and market forces continue to spur a transition to low-carbon solutions, investments in renewable energy, and actions to safeguard ecosystems. They are also leading businesses to embed eco-design and circular considerations in the early stages of product development and cultivate strategies to address post-consumer waste.
Capitals impacted
Drivers
- Civil society and consumer activism
- Investor focus
- Environmental policy and regulatory developments
- Impending institutional consensus on nature-related measurement and reporting frameworks
How we are responding
- Conducting integrated risk assessments and robust accounting of greenhouse gas (GHG) emissions to define new—and validate existing—strategies
- Setting transparent, strategic, and science-based targets and disclosing our progress
- Investing in—and developing—scalable solutions that produce co-benefits for climate and nature
- Supporting and partnering with experts, science-based initiatives, and advocacy organizations
Strategy
Inequality
Inequality
Globalization, rapid economic growth, and widespread improvements in livelihoods in recent decades have failed to close—and have even exacerbated—the deep divides within and across countries. Worsening inequalities have in turn triggered civil society to become more attuned to—and vocal about—social injustices. Attention is now focused on the role businesses can play in addressing social inequality and promoting human rights by ramping up their diversity, equity, equality, and inclusion efforts. In addition to the societal benefits, such actions strengthen the private sector’s ability to recruit and retain talent.
Capitals impacted
Drivers
- Civil society and consumer activism
- Investor focus
- Human rights and other societal policy and regulatory developments
- Impending institutional consensus on social-related measurement and reporting frameworks
How we are responding
- Expanding the scope of our human rights impact assessments
- Promoting living incomes and wages throughout our value chain
- Collaborating across our value chain and broader business community to address inequalities in our supply chain
- Providing a workplace that affords employees equal pay for equal work, equal access to opportunities, and freedom from discrimination and harassment
Strategy
Erosion of trust
read moreErosion of trust
Against the backdrop of the other megatrends presented on this page, stakeholder expectations of businesses are shifting, and regulatory developments are moving forward at pace. Companies are expected to demonstrate irreproachable behavior and transparency, providing trustworthy information on their impacts along their value chain and meeting mandatory reporting requirements in a range of jurisdictions. Simultaneously, companies must contend with rising levels of mistrust—including of science—exacerbated by misinformation on social media channels. There is an increased demand for capital markets to shift from perceived short-term, siloed, and sometimes extractive behavior to a model of long-term, inclusive, and sustainable capitalism, unfortunately still mostly relying on negative screening or exclusions.
Capitals impacted
Drivers
- Mistrust of institutions
- Geopolitical turmoil
- Diminishing confidence in science
- Expectation of increased transparency
- Social media platforms
- Sustainability integration
How we are responding
- Promoting transparency by reporting against the most relevant and widely used sustainability standards
- Linking financing instruments to sustainability performance
- Developing an Sustainability KPI Protocol with a path to providing assurance on key nonfinancial data
- Linking long-term compensation transparently and objectively to sustainability performance
Strategy
Technological progress
read moreTechnological progress
New technologies are emerging rapidly. Companies are implementing automation and digital solutions that increase transparency, maximize efficiencies, create opportunities for robust R&D activity and product innovation, and have implications on employability for workers. Boosted by a rapid flow of data and information, today’s unprecedented pace of change has wide-reaching implications across industries. Within this context, concerns and risks around data privacy and cybersecurity are on the rise, and many actors are working to enhance data and infrastructure protection.
Capitals impacted
Drivers
- Shift to online channels
- Impact of automation on employment
- Growing availability of data and information
- Cybersecurity and data privacy concerns
How we are responding
- Investing in new technologies and acquisitions to accelerate our company’s transformation, expand our smoke-free product offerings, and drive progress in sustainability priority areas
- Making data-based decisions and investments in targeted operational improvements
- Strengthening cybersecurity and data privacy policies and practices
- Enriching employee lifelong learning and upskilling offers
Strategy
Capitals
Human
Natural
Manufactured
Social
Intellectual
Financial
Sustainability strategy
Purposefully phase out cigarettes
Maximize the benefits of smoke-free products
Seek net positive impact in wellness and healthcare
Foster an empowered and inclusive workplace
Improve the quality of life of people in our supply chain
Reduce post-consumer waste
Tackle climate change
Preserve nature
Fundamentals
Read more about our sustainability strategy.
This online content about our Integrated Report should be read in conjunction with PMI’s Integrated Report 2023. This report includes metrics that are subject to measurement 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 2023 or reflect the status as of December 31, 2023. Where not specified, data comes from PMI financials, nonfinancials, or estimates. Unless explicitly stated, the data, information, and aspirations referenced in online content do not incorporate PMI’s wellness and healthcare business, Vectura Fertin Pharma. Regarding the Swedish Match acquisition, completed late 2022, unless otherwise indicated, online content does not include information pertaining to their sustainability performance. Please also refer to "This report at a glance" on page 2 of PMI's Integrated Report 2023 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 214. In PMI's Integrated Report 2023 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.