A Sustainable Tobacco Company and its Transformers in Greece

Philip Morris International (PMI) is moving towards a smoke-free future — one without cigarettes. PMI and its employees believe that something needs to start today to accelerate the arrival of an unsmoked world. That’s why the company wants smokers, nonsmokers and unsmokers to join them in making this conversation a global success and to help them grow a community of people who will help bring about a truly smoke-free future. So PMI started a campaign and called it ‘Year of Unsmoke’. It’s the global campaign to rid smoke from your life, the lives of your loved ones, and generally the world.

The ‘Year of Unsmoke’ is PMI’s urgent call to action to smokers, nonsmokers, regulators and agents of change across the world to drive a better future for the world’s 1.1 billion smokers and their families, loved ones and communities.

As PMI moves from cigarettes to smoke-free alternatives, its journey is also about transitioning to becoming a global sustainability leader. Recently, PMI has announced its sustainability report for 2018. This is the fourth Sustainability Report details the company’s sustainability strategy, which covers its products, operations and value chain, and is an integral part of PMI’s mission to unsmoke the world. It has four pillars:

  • Transforming business
  • Driving operational excellence
  • Managing social impact
  • Reducing environmental footprint

The report publication is part of the company’s commitment to transparency. As PMI moves from cigarettes to smoke-free alternatives, its journey is also about transitioning to becoming a global sustainability leader.

André Calantzopoulos, CEO of PMI, says it is not enough to focus on product alone “Our sustainability ambition extends to the way we operate, manage our social impact, and reduce our environmental footprint. Society’s expectations of businesses are changing, and we must play our part in addressing global challenges”.

For PMI, sustainability means creating long term value while minimizing the negative externalities associated with products, operations and value chain.

In 2018 Sustainability Report of PMI, a case study is shared which identifies the transformation to smoke-free future in Greek affiliate (Papstratos) and its impact on social and economic structure of Greece. This case is an important example of how PMI manages its social impact.

Transformers in Greece

Imagine for a moment that you are a machine operator in PMI’s factory in Greece, it is 2016 and you are told the factory is converting to deliver new products that will contribute to a smoke-free future. Fast-forward to 2018 — transformation is happening everywhere. Not just in factories but also in communications, commercial, and external affairs functions, for example. We are proud to face the challenges, and Papastratos, our Greek affiliate, is an exemplary story.

“The only constant is our values, which have been our guiding light since Papastratos was founded some 87 years ago,” says the managing director Christos Harpantidis. So, once we had explained to employees why a transformation is taking place, most understood it to be a logical step forward. And, while change is not free of challenge, Papastratos recorded no serious negative economic impact for staff through 2016–2018. Ultimately, staff motivation was secured because PMI is intensifying the social dimension of its corporate purpose.

Our staff “get it.” And there is a domino effect as neighboring teams, in Bulgaria for example, gear up for growth in IQOS sales. But what caught our attention was that our agility at work was further primed by the long-standing government-debt crisis. People are willing to adapt. And while trust in business during the tough times has faded, Papastratos is recognized as a role model for rebuilding it. As Christos says, “People here see the transformation as an amazing period of their lives, and other companies in Greece can’t believe how fast we are moving.”

IQOS in Greece is already used by 150,000 people and 400 jobs are being created there in the smoke-free category. Core internal tasks for us in Greece have included achieving cultural and behavioral change, installing crossfunctional “enabler” teams, training over 500 people on new standards and machinery. Alongside that, we are installing new customer care and digital services, operating retail IQOS stores and e-commerce, expanding the sales car fleet, amending supply chain management processes, and engaging on our transformation vision with new external stakeholders, such as scientists and physicians.

Against this backdrop, we have assessed in 2017 the socio-economic impact of our business in Greece. Our findings showed that Papastratos contributed 2.2% to the Greek state revenues, with an economic value added (EVA) of EUR 157 million (0.1% of Greek GDP). For every EUR 1 of EVA by Papastratos, EUR 2.30 is added to the Greek economy, an increase of 66.7% on 2016. Additionally, every job at Papastratos indirectly supports 2.5 jobs in the overall Greek economy, thus supporting the income of 7,130 Greek citizens. Equally significant is the social impact of the Corporate Responsibility Plan, which invested more than EUR 2.2 million during 2009–2017 and aims to provide the most vulnerable social groups with relief from the economic crisis, while creating new economic prospects, empowering women, facilitating access to education, and supporting Greek tobacco growers.

It is great to see PMI’s, a tobacco company, programs focus on promoting employment and decent work to improve the financial and economic security of the socially vulnerable individuals and families. There are many other cases stated in the Sustainability Report of PMI. If you are interested, you may read it from here:

https://www.pmi.com/resources/docs/default-source/pmi-sustainability/pmi-sustainability-report-2018-low-res.pdf

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