Improve the quality of life of people in our supply chain

Our supply chain connects us with millions of people, from the farmers and farmworkers who cultivate our tobacco and other agricultural products to workers at the supplier companies that provide the products and services we need to run our business.

 

 

Improve roadmap goals

Our 2025 Roadmap goals

see our full 2025 roadmap

IMPROVE THE QUALITY OF LIFE OF PEOPLE IN OUR SUPPLY CHAIN

Eradicate systemic child labor in our tobacco supply chain.

Ensure all contracted tobacco farmers make a living income, partner with our direct suppliers to promote a living wage for their workers.

Key performance indicators to track our progress

Eradicate systemic child labor in our tobacco supply chain
Progress further than anticipated

In 2023, child labor prevalence affected 0.1 percent of our purchased tobacco and, while we broadly eradicated systemic child labor issues in the farms we contract with, we remain committed to eradicating isolated cases.*

*For further details on how we calculate the prevalence of child labor in PMI’s tobacco supply chain, please see PMI’s Sustainability KPI Protocol 2023.


Ensure all contracted tobacco farmers make a living income; partner with our direct suppliers to promote a living wage for their workers
Progress further than anticipated
In 2023, we strengthened our tobacco farmer living income calculation methodology and, by the end of the year, 96 percent of contracted farmers supplying tobacco to PMI made a living income.
fundamentals background

See full performance metrics

view data

Learn more about PMI’s Sustainability Index in our Integrated Report 2023. See the full performance metrics and related footnotes here.

The right thing to do

Promoting and adhering to sustainable business practices in our direct and indirect operations helps safeguard human rights, improve labor conditions, protect workers’ health and safety, tackle social inequities, and contribute toward alleviating poverty.

Read more

The right thing to do

Promoting and adhering to sustainable business practices in our direct and indirect operations helps safeguard human rights, improve labor conditions, protect workers’ health and safety, tackle social inequities, and contribute toward alleviating poverty.

As a globally operating company with hundreds of thousands of people engaged in our value chain, our substantial scale provides us with the opportunity to contribute meaningfully to the advancement of fair labor standards and to fostering prosperity.
Within our supply chain we can find parts of our business that are particularly vulnerable to the effects of poverty, including human rights abuses.

The tobacco we source is often grown on smallholder farms in many regions of the world, including low- and middle-income countries. Working to improve farmers’ livelihoods mitigates the risks of human and labor rights violations, including child labor and forced labor.

Activities and investments in our supply chain extend beyond our direct effect on farmers, impacting people’s assets, capabilities, opportunities, and standards of living. As our business continues to transform, we are cognizant of the specific risks facing the electronics sector supply chain, including pervasive modern slavery risks.

The business case

Caring for the quality of life of the people in our supply chain is a major contributor to our preparedness, resilience, and long-term success.

read more

The business case

Caring for the quality of life of the people in our supply chain is a major contributor to our preparedness, resilience, and long-term success.
We anticipate that the time, energy, and resources we have invested in developing, implementing, and monitoring the application of our due diligence processes to monitor and improve the quality of life of those working in our tobacco supply chain will allow us to continue to gather learnings that will help us uphold high standards throughout the rest of our supply chain, with a particular focus on our relatively recent yet fast expanding electronics supply chain.
This will enable us to continue fostering sustainable and responsible corporate behavior anchored in human rights and environmental considerations in our value chain. Importantly, as new rules norming how businesses address and report on the impacts of their supply chains emerge, strategic focus on this topic will allow us to limit our potential exposure to human rights issues, child labor, forced labor, and other labor-related violations, import bans, as well as reputational damage.
Improve roadmap goals

Our progress in 2023

Read more in our Integrated Report
Related articles, case studies and videos
ALP anniversary landing page thumbnail farmer Mexico

Social sustainability: Agricultural labor practices

read more
Heated tobacco product factory
Conducting an end-to-end human rights impact assessment in Malaysia
Supply chain landscape

Managing our supply chain sustainably

Read more

Preventing child labor in tobacco-growing communities

1:27

Tobacco farmer in Brazil
Assessing human rights risks in Brazil
Human rights thumbnail

Respect human rights

read more
Focus on: Human Rights

Focus on: Human Rights

Read more

 

 

Related reports, policies and documents

Human Rights Report

download

Human Rights Commitment

download

Agricultural Labor Practices Code

download

Good Agricultural Practices (GAP)

download

Responsible Sourcing Principles

download

ALP 10 year anniversary report

download

ALP Step Change Guiding Principles

download

Sustainability KPI protocol 2023

download

Looking ahead

We are proud of our progress in addressing labor and human rights challenges in our tobacco supply chain, and we are committed to continue delivering meaningful impact and improving the livelihood of people in our supply chain. The evolving regulatory landscape makes our efforts only more relevant, as we seek to increase transparency on the social impacts in our supply chain and reinforce our ongoing due diligence processes. We will continue to ensure robust monitoring and quality reporting accompany our social programs, and we will leverage on the learnings gathered to expand our efforts in our fast-evolving non-tobacco supply chain, with a particular focus on electronics.

Following our acquisition of Swedish Match, a significant stream for the years ahead will focus on ensuring that their supply chain’s performance, monitoring, and reporting is integrated with ours diligently, building on existing synergies and assessing actual and potential social impacts to adjust our strategy as needed. Our aim is to pursue and strengthen our social strategy across our integrated supply chain holistically, designing initiatives, related measurements of progress, and aspirations that can guide our work moving forward.

We are acutely aware of the role we play in creating positive impact for the many people in our supply chain and have set ambitious aspirations for ourselves. We, however, recognize that external environmental and socioeconomic factors, and dependencies, influence our ability to fully control and make progress toward these aspirations. We understand the systemic nature of many of the issues we are trying to resolve and the need for a multistakeholder approach to tackle them effectively. For that, we will continue to engage with our suppliers, business partners, others in the private sector, as well as with specialized organizations, academics, and governments.

Our Agricultural Labor Practices (ALP) program has been the cornerstone of our social strategy and a key focus for PMI for more than 10 years. In 2024, we will conduct a revision of our ALP Code, as well as analyze and update the list of hazardous tasks related to child labor. This work will help us account for new risks pertaining to local and global socioeconomic circumstances and new requirements introduced in new laws. We will also strengthen our grievance mechanisms, revamping existing escalation processes for potential forced labor and ethical recruitment issues. We will, accordingly, deploy it in relevant sourcing markets.

Our aspiration to ensure that all contracted farmers supplying tobacco to PMI earn a living income by 2025 remains unchanged. In 2024, we plan to undertake a living income benchmark exercise in Indonesia and will update all existing living income values to account for inflationary impacts. Moreover, as we sophisticate our impact-driven approach to tackle issues related to poverty and inequality, we will shift our focus toward investing in initiatives that improve the income of the most vulnerable farmers supplying tobacco to PMI, who are still not achieving a living income—aiming to create interventions that drive a tangible and verifiable positive impact on farmers’ livelihoods. This change shall allow for improved data auditability and further align with emerging regulation.

During 2024, we plan more targeted supplier engagements to deploy, align, and build capabilities that will help our suppliers implement the requirements of our Responsible Sourcing Principles (RSP). We are supporting RSP compliance through our supplier due diligence programs by applying the EcoVadis and RBA methodologies. During 2024, we plan to further this work by going deeper into industry-specific issues to build a more robust supplier base and to ensure sustainable performance for the future.

We have made excellent progress toward our aspiration to achieve 100 percent of critical suppliers from whom PMI sources sustainably by 2025. We plan to expand this work beyond critical suppliers of direct materials and electronics in the future.

We have piloted two RBA programs to improve the sustainability performance of our electronics suppliers: the Responsible Factory Initiative and the Responsible Labor Initiatives. In 2024 we will assess the effectiveness of this work and, if deemed successful, plan for expansion in line with our human rights impact assessment methodology, UN Guiding Principles on Business and Human Rights, and OECD Due Diligence Guidance for Responsible Business Conduct.

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.


Share this page