PMI 12-C
SOCIAL CONTRIBUTIONSPOLICY
Policy Approver & Accountable Senior Leader:
Policy Owner:
Last Updated:
Version:Chief Executive Officer, PMI
EA Vice President Business Development
1 August 2021
2021.2

KEY POINTS TO REMEMBER

PRINCIPLESPMI Social Contributions can take the form of monetaryor in-kind contributions.

•Social Contributions are self-managed and self-fundedby relevant business functions at local (affiliate/cluster),regional, or global (Operations Center) level.

We value our relations with thecommunities where we operate andpartner with them to help address socialand environmental challenges.

•Prior to enter into a Social Contribution, due diligencemust be conducted so that we know with whom we areworking.

We focus on the challenges andopportunities associated with our value
chain through our community investment
programs.

•We manage Social Contributions withhonesty, integrity and good judgment.
Doing so is essential to PMI’s credibilityand reputation.

•We target our interventions for Social
Contributions in light of local needs aswell as of global societal expectations,such as those articulated in the United
Nations Sustainable Development Goals(UNSDGs).

•We communicate transparently on theSocial Contributions we make, disclosing
them publicly every year.

The PMI employee assigned as Coordinator needs
to collect and document all necessary information,and ensure required approvals are obtained before
committing to any Social Contribution.
The Coordinator needs to carefully and timely monitor
the implementation of a monetary contribution against
the approved grant application and its objectives.

PMI 12-C
SOCIAL CONTRIBUTIONS POLICY
1. What is a Social Contribution?
•The Company’s books and records
must accurately and fairly reflect alltransactions, including expenses incurredin connection with Social Contributions.

1.1 Definition
A monetary or in-kind contribution constitutes a Social
Contribution if three requirements are met:
i. The contribution is voluntary: a Social Contribution
is something PMI chooses to do. Therefore, it
excludes contributions required under a contractual
or a legal obligation (other than a contract related tothe contribution voluntarily entered into);

WHY IT IS IMPORTANT FOR PMIPMI Social Contributions demonstrate our longstanding commitment to being an active and supportive
member of the communities where we operate bysupporting organizations and activities that addresssocial and environmental needs.

ii. The contribution is made by PMI to a Grantee
to support organizations and activities aiming atdelivering a positive social or environmental impact.
Examples include promoting education, providing
economic development opportunities, advancing
social welfare, protecting the environment orproviding relief to populations affected by adisaster; andWHO MUST FOLLOW THESE PRINCIPLESAND PRACTICESAll Company employees involved in Social
Contributions.

PMI MANDATORY PRACTICESAs a company, our focus is to transform our businesstowards smoke-free products, demonstrating respect
for the people throughout our value chain and forthe environment around us, while always acting withintegrity and operating with excellence. Beyond ourmany business activities to meet our sustainability
commitments, we also contribute to community-basedorganizations and activities to help advance social andenvironmental projects. To improve the quality of lifein the communities where we operate, we align oursupport to the local needs and the United Nations
Sustainable Development Goals (SDGs).
These Mandatory Practices should be read in
conjunction with Annex B – Social Contributions
Implementation Guide.

iii. The contribution is a community investment, acharitable donation, or an in-kind contribution, asdefined in section 2 below.
The following do not constitute a Social Contribution:•Donations from employees to a charitableorganization.

•Volunteering or pro-bono work by PMI employees,
whether or not during regular working hours, andcosts occurred by volunteering activities (e.g.,equipment, transportation, etc.).

•Participation of PMI employees in a charitable
fundraising event (e.g., dinner, sport tournament,etc.).

•Monetary or in-kind contribution made to a Grantee(see “Definitions”) that primary aims to support thebusiness for non-social purposes or to strengthenbusiness relations. Examples include sponsorship,
membership and subscriptions to organizations,participation in business events, seminars, forums
and conferences, cooperation agreements, etc

PMI 12-C
SOCIAL CONTRIBUTIONS POLICY•

Company initiatives endorsed by PMI leadershipand governed by specific practices, which may
include a social component, but extends beyond it(e.g., PMI IMPACT).

1.2 Exclusions
PMI does not make monetary or in-kind Social
Contributions to:•Individuals;•

Religious organizations, unless the grant will
support a project which is not religious in nature.
This means that the grant may not be used for
inherently religious activities such as worship,prayer, proselytizing or religious instruction. Funds
may be used to support social projects if they areseparate from the Grantee’s religious activities.
Project beneficiaries should not be selected withregard to their religious affiliation;•Support political causes, candidates, organizations
or campaigns. This does not exclude organizations
that address rule of law, equal justice, or othernonpartisan topics that concern the body politic; or•Support sports or athletic sponsorships.

2. How do we contribute?
PMI may make a Social Contribution in the form of amonetary contribution or an in-kind contribution.
2.1 Monetary Social Contributions
The different types of monetary Social Contributions
are the following:
Community investments: contributions which areimportant to conduct our business sustainably andresponsibly by promoting a community based approachto help manage our social impact and reduce ourenvironmental footprint across our value chain. Theseinclude all those sustainability related topics that
follow PMI’s sustainability materiality assessment interms of both, our company’s impact and relevanceto stakeholders. Community investments directly
contribute or help advance PMI’s sustainability
forwardlooking aspirational targets.
They are meant to complement our efforts with aparticular focus on those sustainability topics thatare relevant to the local reality of a specific market,
given our footprint and presence in the country. Moreinformation on sustainability material topics can befound in PMI 12-C Annex B Implementation Guide, thelatest PMI Integrated Report and/or the latest PMIMateriality Report.
Charitable donations: contributions made to enhance
the quality of life in the communities around us,
responding to local needs. Charitable donations are notlinked to our Company’s impacts along its value chain.
Examples include providing computer classes to theelderly, supporting a shelter for victims of domestic
violence, promoting access to quality education for
unprivileged children and offering vocational training
to unemployed individuals. Charitable donations also
encompass ad hoc or one-off contributions, i.e. typicallydonations to disaster relief efforts and matching grants
tied to separate contributions made by PMI employees
on an individual basis.
2.2 In-kind Social Contributions
PMI may make in-kind Social Contributions whereby
the Company donates goods (e.g., IT equipment orfurniture) to, or allows usage of its facilities (e.g., officespace) by a Grantee.
These in-kind Social Contributions may be existing PMI
assets (excluding PMI products) or goods purchased
for the purpose of donating them as an in-kind Social
Contribution.
3. How do we manage social contributions?
Our Social Contributions must be managed withintegrity in a transparent and responsible manner.
While the procedure and requirements to make a Social
Contribution are tailored to the nature and size of thecontribution, some key principles apply for all Social
Contributions:•The decision to support a Grantee/project must be
carefully made, in compliance with local legislations
and PMI Principles & Practices.

•Due diligence must be performed on Grantees,encompassing an assessment of the organization’s

PMI 12-CSOCIAL CONTRIBUTIONS POLICY
history and track record, governance and executive
leadership, vision and strategy, financial health, andhuman resources.
••

PMI does not bribe anyone for any reason, andthis equally applies to the way we make Social
Contributions. If a Government Official is involvedin a Grantee, such involvement must be disclosed
as part of the application process and carefully
assessed, in order to ensure PMI complies with local
legislation and PMI Principles & Practices.
All necessary information must be obtainedand documented, and required approvals must
be obtained before committing to any SocialContribution.

3.1 Procedure for monetary Social Contributions
Monetary Social Contributions must be recorded andprocessed in GMS, which embeds requirements tailoredto the different types of contributions. The grantmaking process entails the following steps:•

Preliminary steps, including budget allocation andidentification of Grantee/project•

Completion and submission of grant application•

Review of grant application and performance of due
diligence•

Review and approval of grant application byapplicable approvers•

Signature of grant agreement (whereas applicable)•Payment execution•

Monitoring of grant implementation•

Grant narrative and financial reporting, and grantclosure.

The requirements and responsibilities at each stageof the grant-making process are detailed in Annex B –Social Contributions Implementation Guide.
3.2 Procedure for in-kind Social Contributions
In-kind Social Contributions must be documented andprocessed in GMS. The in-kind Social Contribution
process entails the following steps:
1. Preliminary steps, including identification ofGrantee, valuation of assets to be donated (forexisting PMI assets) or, if applicable, procurementof assets for the purpose of donation (applicable
Procurement P&Ps must be followed)
2. Completion and submission of grant application
3. Review of in-kind contribution application andperformance of due diligence
4. Review and approval of in-kind contribution
application by applicable approvers
5. Signature of grant agreement (whereas applicable).
Provided the PMI’s general terms and conditions for
granting Social Contributions has been signed by
the Grantee as part of the application process, thesignature of grant agreement is not needed, unlessrequired under local law.
6. Execution of the donation
7.

Monitoring of grant implementation and reporting.

•Donation of existing PMI assets are not subject toPMI 12-C
SOCIAL CONTRIBUTIONS POLICY
by the relevant function (e.g., Leaf function forcommunity investments made to the benefit of
tobacco-growing communities).

monitoring or reporting.
•Donation of assets that were procured for thepurpose of donation must be monitored andreported. Documentation (invoices, delivery
notes, e-mail correspondence, photographs, visit
reports, meeting minutes or any other relevant
documentation) confirming the receipt of an in-kindSocial Contribution by the Grantee as well as how
the Grantee used the in-kind donation must be
uploaded in GMS.

•In-kind Social Contributions are managed by
the relevant function which decides to make thecontribution.

Please refer to Annex A – Approval Matrix to identify
applicable approvers for Social Contributions.

Low fair market value in-kind donations:

4. How do we report on our Social Contributions?

Low fair market value in-kind donations are not required
to be processed in GMS. PMI 12-C Annex D lays-out adue diligence procedure that may be considered if local
Law deems appropriate. For low fair-market value inkind donations, steps 2-4 referred above are replacedby procedure outlined by Law Department or PMI
12-C Annex D. Such in-kind contributions must still be
documented and reported at year-end.

Every year, PMI publishes a report on Social
Contributions made during the previous calendar
year.At the end of each year, a report containing
both qualitative and quantitative information must beprepared by the Coordinators for Social Contributions
using Annex C – Social Contributions Reporting Template.
All reports must be shared with OC EA by January 15
every year for consolidation. In the preparation of thereport, the Coordinator must consult with the relevant
finance function to reconcile figures with financial
data (income statements reports). The Coordinator isalso responsible for ensuring review of the reports anddocumenting approval by the Director of the relevant
function and the review by the Law department.

3.3 Roles and Responsibilities
Social Contributions are funded and managed byrelevant functions either at local (affiliate/cluster),regional or global (Operations Center) level. Therefore,
the primary responsibility for Social Contributions lies
with the management of the relevant function in theaffiliate/cluster, region or OC.
••Charitable donations are generally managed andfunded by the External Affairs function. In caseany other Function decides to make the charitable
donation at local or regional level, the Function
should consult with External Affairs if the potential
donation reflects priorities identified for charitable
donations locally/regionally. In such cases, while
the approval matrix remains the same (with EA asfirst level approver), the Grant Coordinator will
be a person designated by the relevant Function
and bear the full responsibility for grant initiation,
monitoring and reporting requirements.
Community investments are managed and funded

These reviews should be documented and may berequested by OC EA together with the report.
Relevant functions are responsible for the integrity of
the information and data provided to OC EA.

PMI 12-C
SOCIAL CONTRIBUTIONS POLICYEXCEPTION HANDLING
Requests for exceptions to Social Contributions Policy must be submitted in writing to EA VP BusinessDevelopment. Exceptions are approved by the EA VP Business Development.

EXCEPTION HANDLING
Coordinators should refer to the Annex B – Social Contributions Implementation Guide for further guidance.
For contributions that do not fall under the scope of PMI 12-C, you may refer to:•PMI 14-C – Anti-Corruption•

Sustainable Tobacco Production Initiatives Process Guide See the Employment and Fee-for-Service Standard for
additional rules and processes, including documentation and pre-approval requirements, that must be followed
before hiring or retaining a Government Instrumentality or a current or former Government Official (including
their close relatives).

ASK QUESTIONS AND GIVE FEEDBACK
If you have any questions regarding the content or the interpretation of PMI 12-C Social Contributions, pleasecontact OC External Affairs team.
Speak Up
Compliance policies, such as this one, express principles and mandatory practices the Company expects all
employees to follow, so we may keep our promise to do business ethically and legally.That is why it is so importantthat you don’t wait to speak up if you suspect a violation of this policy. Speaking-up is a key part of our jobs. It is
expected and always welcomed.
If you have a concern, contact someone more senior in your organization. Most people talk to their supervisors,
but there are other options, including department heads, your affiliate or function leadership, and the Ethics &Compliance, Law, Risk & Controls and People & Culture departments.
Ethics & Compliance maintains a confidential email address, PMI.EthicsandCompliance@pmi.com, for speaking
up.A third party operated Ethics & Compliance phone and online Helpline is available 24 hours a day withoperators available in all languages spoken at PMI. Call its global phone line at +1-303.623.0588 or use alocal toll-free number listed on the intranet or available from your management. Its online address is www.
compliance-speakup.pmi.com. You can also speak up anonymously using the Ethics & Compliance Helpline,
PMI.EthicsandCompliance@pmi.com, or other methods of your choice.
The Company takes seriously all good faith reports of suspected violations of this policy, whoever is involved,and investigates all compliance allegations following established standards and guidelines.The Company does
not tolerate retaliation against employees who speak up in good faith about a suspected compliance violation orcooperate with an investigation.

PMI 12-C
SOCIAL CONTRIBUTIONS POLICY
Violations of this and other C-policies may carry disciplinary action against those involved, up to and including
termination of employment. However, the primary objective of an investigation is to understand what happened
and, if necessary, to correct the situation and prevent it from happening again.
If you believe you may have violated this policy, you should still speak up promptly. Doing so demonstrates
good intentions and the Company will consider this as a mitigating factor. In most cases, speaking up about yourown misconduct reduces the severity of disciplinary measures, and in some cases can result in the avoidance ofdisciplinary measures altogether.
See PMI 16-C Speaking Up Policy for more information.

FORMS AND ATTACHMENTS•

Annex A - Approval Matrix14.03.2023•Annex B - Social Contributions Implementation Guide•

Annex C - Social Contributions Reporting Template•

Annex D - Procedure for low fair market value in-kind Social Contributions•Social Contributions - Grant Agreement Template

DEFINITIONSApproval Matrix – the matrix showing required approvals for Social Contributions and Deviations (see Annex A).
Company or PMI - Philip Morris International Inc. and its direct and indirect controlled subsidiaries.
Coordinator – the PMI employee administering and managing a Social Contribution.
Deviations – variations from the approved Social Contribution application, which may include a (i) grant timeextension; (ii) re-allocation of the grant budget within different budget linesÍ¾ (iii) grant change of scopeÍ¾ (iv) reallocation of unused fundsÍ¾ and (v) re-granting to third-party Grantee(s) not covered in initial grant.
Government Instrumentality – an organization that serves a public purpose and is closely tied to any level ofgovernment, but may not itself be considered a government agency. Many enforcement authorities interpret thisterm broadly to cover virtually any government-controlled entity, including universities, hospitals and commercialenterprises. For purposes of this policy, an entity shall be considered government-controlled if a government (i)owns or controls 50% or more of the entity’s shares, (ii) funds a majority of the entity’s budget, or (iii) can otherwise
direct the management, policies or affairs of that entity. You should therefore assume that every governmentcontrolled entity is a Government Instrumentality unless the entity is on the List of Government-Controlled
Commercial Enterprises that are not Government Instrumentalities or the Law Department advises otherwise inwriting.

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SOCIAL CONTRIBUTIONS POLICY
Government Official – any officer, employee of, or person acting on behalf of (i) a government or one or more of its
departments, agencies or Government Instrumentalities or (ii) a Public International Organization; or any officialsof a political party or candidates for political office. If you are not sure whether someone is a Government Official,consult the Law Department. Note that in some contexts, interactions with close family members of a Government
Official may be treated as an interaction with that Government Official.
Grant Management System (GMS) – PMI’s electronic grant management system.
Grantee – a not-for-profit or public sector organization dedicated to furthering a particular social cause thatreceives a Social Contribution from PMI. A Grantee is an organization which aims to benefit the public interest,
not to generate profit and in which no part of the organization’s income is distributed to its members or owners.
Grantees may typically include registered charities (e.g., associations, foundations, etc.), non-governmentalorganizations (NGOs), and some public sector institutions (e.g., public schools)