HOW WORKING TOGETHERCAN EXPEDITE THE CHANGEWE NEED
By Jennifer Motles Svigilsky and Hasan Youness

The 2030 Agenda for Sustainable
Development
The 2030 Agenda for Sustainable
Development has become the North Star
for stakeholders from all sectors of society
and all over the world, providing an action
plan for people, planet, and prosperity.
Almost four years into the 2030 Agenda,
it is clear that the actions society iscollectively taking are not transformational enough, and they areneither at the scale nor the pace needed toachieve the 17 Sustainable Development
Goals (SDGs). While the ambitionscontained within the SDGs are lofty,
the challenges are even vaster: The
already demanding targets we have set forourselves have indeed become harder toachieve. Some sectors – including food andbeverage, healthcare, extractives,tobacco, and mineral processing – havea far greater impact on the SDGs as awhole than others, such as the financialservices sector. Likewise, some industries have greater impact on a particular
SDG than others, for example the effectsof biotechnolog y and agriculturalproducts on Goal 3 (Good healthand well-being) and then, conversely,consumption and services, which havea low impact on the same Goal. By thesame token, there are SDGs upon which
the private sector as a whole can havea substantial effect. For instance, thetotal impact across all sectors is highfor Goal 12 (Responsible consumptionand production) and Goal 14 (Life belowwater), but much less so for Goal 4154(Quality education). For the latter, it is thepublic sector that does most of the heavy
lifting. Regardless of the impact, it is afact that the scale, scope, and complexityof the economic and social transformation needed to achieve the SDGs are ofsuch magnitude that no one sector –government, business, civil society, or
academia – is able to achieve this byitself. That is why overcoming differences
and coming together to face thesecommon challenges is key. The need foralliances, partnerships, and collaboration
therefore cannot be overlooked.
The importance of multistakeholder
partnerships in achieving systemicchange
The 2030 Agenda talks abouttransformative and systemic change. All
sectors of society must rethink what
their role and purposes are, and thereby
readjust the way in which they operate andfunction for the SDGs to be achieved ontime. Being sustainable and contributing
to a prosperity that goes beyond theeconomic growth of a business entails not
only shifting one’s supply chain activities,
but also making sure that the negative
impact of the products and services
offered are also appropriately addressed.
Many times, this means transforming not
only the way we do business, but alsochanging the services and / or products
sold. This kind of transformative change
cannot be achieved in silos. A good
example of this, which we came acrossduring our research, would be therecent launch of Loop™ by TerraCycle incollaboration with a coalition of multinationals for consumer packaged goods.
This multistakeholder initiative has thepotential to visibly address single-use
packaging by bringing reusable packaging
into the mainstream. Cross-sector collaboration is essential for achieving
both the scale and the sustained impact
required. Partnerships can trigger
innovative ways of working, mobilizing
expertise and hard-to-reach resources,
and ultimately accelerating the pace atwhich substantive change occurs. Thereis a real opportunity to develop newapproaches to partnering that go beyond
philanthropy and toward generating
shared value.
When collaboration doesn’t happen
If addressed correctly, the core businessof an industry can serve as a catalyst forchange; however, if it is mismanaged,
it can become a major impediment tosustainability. Despite having a strong
commitment and an impactful purpose,some companies find it difficult tochange due to their inability to workwith other sectors of society, which isoften a result of their reputational deficit.
The tobacco industry is an example
of a sector where partnerships could
significantly accelerate transformationalchange for the benefit of society. We
know that half of all smokers will die
from a smoking-related disease. For
more than 20 years, the tobacco-control

Global Goals Yearbook 2019much more rapidly. That is where thecommunity has been trying to eradicate
potential for doing well by doing goodsmoking, and yet one-seventh of the global
lies: working together toward making
population still smokes. Furthermore,
the world smoke-free.
the World Health Organization (WHO)predicts that the number of smokers
Is exclusion the most effective way
around the world will remain essentiallyto end smoking?
unchanged at more than one billion
for the foreseeable future. A growing
Some describe the next decade as thenumber of experts believe that public
crucial chance to create change – ahealth policies should not be based
short window of opportunity to altersolely on discouraging initiation andthe ways in which we live on this planet.
encouraging cessation, but also leveraging
By 2030, the world population will
the potential of science-based smoke-freehave surpassed 8 billion, and, unlessproducts for smokers and public health.
we try a different approach, it is likely
However, a significant part of societythat over a billion people will continue
continues to doubt that the tobacco
to smoke. Without decisive action toindustry can be part of the solution.
tackle the end of smoking, the estimates
Society remains understandably cautiousof smoking-related diseases will
about the possibility of engaging – letremain essentially unchanged. But it
alone collaborating – with an industry
does not have to be that way. Within thethat sells products that for so long created
tobacco sector, one company changed its
so much harm. Indeed, it is almost
purpose in 2016, realizing that its new
counterintuitive to think of the tobaccosmoke-free product had the potential
industry as a partner to achieve ato accelerate the end of cigarettes
more prosperous future. But whatif tobacco companies could indeed – for the benef it of consumers,
the company, and society. Philip
be part of the solution? How would
Morris International (PMI) is fully
that work? What conditions orshifting its resources to completely
safeguards would need to be put in placetransform its business and become ato guarantee that any partnership was one
smoke-free technology leader as quickly
that actually helped (and not hinder) theas possible. Its vision is to achieve a
progress made so far toward eradicatingsmoking? The answer is simple: For any
tobacco company to have any credibility incontributing to the 2030 Agenda –and thereby legitimately speak aboutsustainability – the purpose must be noneother than to use all of its resources andingenuity to develop and commercialize
better alternatives for society and theenvironment. In doing so, they must
help eliminate consumer demand forcigarettes as fast as possible, and thus
accelerate the end of smoking.

smoke-free future – that is, one without
cigarettes. Its strong belief is that if you
don’t smoke, don’t start; if you smoke,quit; if you don’t quit, change to a better
alternative. It begins with a continued
and robust focus on: preventing youth
from starting to smoke or using nicotine
products; making sure former smokers
and never smokers do not return to, or
pick up, the tobacco or nicotine habit;
and providing better choices to the men
and women who smoke today.
There is no substitute for quitting, andregulations should continue to dissuadepeople from starting to smoke, as wellas encourage cessation. Yet, for thehundreds of millions of men andwomen globally who will otherwise
continue to smoke, PMI’s goal is to switch
them to nicotine-containing productsthat are scientifically substantiated as
better choices than continuing to smoke.
Even though they are addictive and notrisk-free, these smoke-free tobacco andnicotine products have the potential
to significantly reduce the individual
risks and population harm whencompared to cigarette smoking. It istrue that cigarettes are still, by far, thelargest part of PMI’s business, but this ischanging rapidly, as PMI has been >>Unfortunately, most tobacco companies
appear to be continuing to base theirbusiness strategies on expanding theirportfolios and growing their cigarettesales, with no apparent intention to
eventually phase out cigarettes. The mostglaring shortcoming in any approach tosustainability is denying that by workingtogether, society can achieve this change

Global Goals Yearbook 2019

155Figure 1
Business transformation metrics

20152016

2017

2018

Number of factories producing smoke-free products
out of total number of factories

2 outof 48

2 outof 48

3 outof 46

7 out
of 44

8%

15%

39%

60%

0.2%

2.7%

12.7%

13.8%

Number of markets where net revenues fromsmoke-free products exceed 10% of total net
revenues

01519

Number of markets where net revenues fromsmoke-free products exceed 50% of total netrevenues

001

3

Smoke-free product shipment volume(billion units)

0.8

7.7

3642

90 – 100 by 2021
>250 by 2025

Combustible product shipment volume(billion units)

881

845

791

767

<550 by 2025

Smoke-free product shipment ratio(smoke-free/total)

0.1%

0.9%

4.4%

5.1%

>30% by 2025

Total IQOS users (in millions)

0.2

2.1

6.9

9.6

Estimated users who have stopped smoking andswitched to IQOS (in millions)

n/a

1.5

4.7

6.6

Commercial expenditure (smoke-free/total)
Net revenues (smoke-free/total)

Aspirations

38 – 42% by 2025

>40 by 2025

Source: PMI Sustainability Report 2018

reallocating its resources massively
toward a future without cigarettes. Overthe last three years, approximately 7.3
million adult smokers around the world
have stopped smoking and switched toPMI’s heated tobacco product, which iscurrently available for sale in 47 markets
in key cities or nationwide under the IQOS
brand. Replacing cigarettes with better
alternatives will take time, and they are
fully committed to doing everything they
can to ensure that this happens as soon
as possible. PMI’s smoke-free strategy
supplements the efforts by the WHO
to reduce smoking prevalence, where
it is aiming to reduce smoking almost
four times faster than the target set by
the WHO. Its aspiration is that, by 2025,
at least 40 million people who would
otherwise have smoked cigarettes will
have switched to its smoke-free products,
reducing the number of PMI cigarettesmokers by a total 55 million by 2025.
To track the progress of its goal, PMI
developed Business Transformation
Metrics, on which the company reports

156

periodically in its Sustainability Report.
In 2018, smoke-free products representedmore than 5 percent of PMI’s shipment
volume and more than 13 percent of its net
revenues, but they already represented
60 percent of its global commercial
expenditure and 92 percent of its global
R&D expenditure (Figure 1).
These metrics illustrate the magnitude of
PMI’s business transformation, but perhaps
more importantly, they demonstrate thatthe company is doing everything it canto address its number one sustainability
challenge: the impact of the products
it sells to its consumers. PMI believes
that business growth should not be at
the expense of people and the planet.
That is why it is drastically changing theway it does business, and why it wants
to change the way business is done. To
succeed in its purpose of ridding theworld of cigarettes, PMI must engage
and work in partnership with different
parts of society and a wide range ofstakeholders. These include NGOs,investors, customers, consumers,suppliers, governments and regulators,academics, and others. Successful
stakeholder engagement is a crucialpart of transformational change, that is,fundamental changes to wholeecosystems – not simply incremental
improvements that translate into cost
reductions and operational efficiencies.
However, as PMI advances to transform
its business, it also knows that one of its
key challenges is – and will continue tobe – earning the trust of its stakeholders
and society as a whole.
Collaboration is key
When what we are seeking to change
is a systemic and complex issue, thepathways or levers needed to create aparadigm shift and achieve that desiredchange are often less simple than wewould desire. Although drastic anddisruptive action to provoke change
might commonly be the most appealing
choice, such change usually begins not

Global Goals Yearbook 2019

Figure 2

PMI’S TRANSFORMATION IS NOT JUST ABOUT CHANGING THE PRODUCT…
… it is about completely changing the value chain

R&D

MANUFACTURING

POST-CONSUMER WASTE

We continue to shift resources
toward achieving our transformation: 92% of our investment
in R&D and 60% of our global
commercial expenditure werededicated to smoke-freeproducts in 2018.

Changing means converting
the way we work, from the factorymachinery we use to theprocesses we follow. Sevenof our factories, up from threein 2017, now produce smoke-freeproducts.

We plan to play our part in thecircular economy and thatmeans designing products andusing materials that can berecycled and / or reused – including
the electronics we started sellingin 2014.

SOURCINGCOMMERCIALIZATIONAs we decrease our tobacco
leaf requirements, there is aneed to support farmers’
profitability and livelihoods
through diversified crops, suchas soybean or groundnuts.

Customer-centric approaches –specialists who engage with adultsmokers, flagship stores, help
centers and digital platforms – areneeded to make smoke-free products
known and available to adult smokers.

with a heavy hand, but with patience,empathy, openness, dialogue, andlearning. The common thread among thevast majority of stakeholders is to exclude
and rule out any possibility of engagementwith tobacco companies. Indeed, it
makes little sense to work with tobaccocompanies that have absolutely
no plans to stop selling cigarettes.
However, this premise should change
if the fundamental operating
parameters of a tobacco company
are altered. More concretely: If acigarette company is actively making
substantive efforts toward ridding
the world of cigarettes for better
alternatives, and transparently
demonstrating how they are taking
every necessary step to make thishappen as quickly as possible, should
the possibility of collaboration, in turn,at least be given serious thought?
Change cannot happen without theengagement of all relevant stakeholders
working together to achieve a common

purpose. Of course, collaboration should
be a response to having a shared goal,
and without that, justifying partnerships indeed can be hard. Exclusion as a
blanket statement – without considering
the value proposition of different
companies and assuming that allcompanies are essentially the same –reduces the ability of any sector of society toinfluence and impact change in the right
direction (Figure 2).
Every day that we continue to perpetuate
this status quo, we are inevitably
delaying the possibility of change: theright kind of change, the change that
we all want, and the change that thisworld needs. Every day that businessas usual continues, we delay the opportunities that we know await us. It is
not just about doing less harm – it isabout moving toward positive contributions, and understanding sustainability
as an opportunity for innovation andgrowth. A paradigm shift brings withit new challenges, opportunities, andresponsibilities, but above all, a shared
goal: Substantial and tangible change canonly be achieved at the convergence ofinclusion, collaboration, technology, andinnovation. The power of positive change
is likely to materialize when we choose
to work together and collaborate in ways
none of us ever thought possible.
Jennifer Motles Svigilsky works on Social
Impact & Sustainability at Philip MorrisInternational.
Hasan Youness is a Professor of Strategic
Management and Sustainability at theLebanese International University, Notre
Dame University, Sagesse University,
Lebanese University, and at l’UniversitéSaint-Joseph de Beyrouth. He also teaches
courses on social entrepreneurship andcorporate social responsibility and is partof the UN Global Compact Lebanon’s
Secretariat, serving as its Strategic Advisor.
He is also the author of #TrendsOfBusiness,a book about the leading trends that havebecome true prerequisites for doing business.

This paper represents the views of the authors and not necessarily the organizations where they work.
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