REDUCE
POST-CONSUMER WASTESTRATEGYSEPTEMBER 2022

Philip Morris International: Reduce Post-Consumer Waste Strategy | Message from Jenny

Addressing the impacts of our products remains at the core of our strategy.
Of course, this starts by focusing on their health impacts. Yet it does not stop
there, as we remain committed to also addressing the environmental impact ofour products and continue to embed eco-design and circularity principles in theirdevelopment and their end-of-life management.
Reducing and appropriately managing post-consumer waste means we work
towards purchasing, converting, and using fewer raw materials mindful that ourplanet has limited natural resources. Investing in the safe and responsible disposalof this kind of waste is the right thing to do, as we share society’s concerns
regarding the impacts of litter—such as pollution and harm to wildlife – and webelieve we have a role in working to protect and preserve natural environments.
We have developed and are implementing a comprehensive four-fold postconsumer waste management strategy which focuses on: packaging, cigarettes,
smoke-free electronic devices, and smoke-free consumables. This guide provides
a deeper look into this strategy, including our management approach, aspirations,and progress to date.
As you review and learn more about our work, I invite you to reach out as we
continue to transform for good, learn, and discover better ways to develop
solutions that have meaningful impact. We hope our transparency and willingness
to engage will spark dialogue with those who can help accelerate the pace ofchange and allow us to continue making our company better and more sustainable.

Jennifer Motles
Chief Sustainability Officer, PMI

2

Philip Morris International: Reduce Post-Consumer Waste Strategy | Anchoring sustainability at the core of strategy

Anchoring sustainability at
the core of strategy
Embedding sustainability in all we do
For PMI, sustainability is more than just a means to minimize negative externalities and mitigate
risks while maximizing operational efficiency and resource optimization. We see it as a fundamental
opportunity for innovation, growth, and purpose-led, impact-driven, long-term value creation.

Purpose, Value,& Impact

Technology,
Innovation &GrowthOperational& Resource
Efficiency

Mitigating
Risk &
Compliance Read more about PMI’s sustainability efforts

3

Philip Morris International: Reduce Post-Consumer Waste Strategy | Sustainability materiality assessment

Sustainability materiality assessment

HIGH

A robust sustainability materiality analysis allows us to identify, assess, and prioritize ESG
topics on which we should focus. In line with the principle of double materiality, it consists ofa fivefold approach.

Product health impact

Sales, marketing, andconsumer communications

ClimateSigniﬁcance of ESG impacts on PMIBusiness integrity

Innovation in wellness
and healthcare
Laws andregulations
Human capital development
Engagement with policymakers

Diversity and inclusion

Economic contribution

Materials and product eco-design

Water

Labor standards

Post-consumer waste
Operational discharge
Privacy

Health and safety at work
Socioeconomic well-being of
tobacco-farming communities

Employee well-being

LOW

Biodiversity

Philanthropy
Animal welfare
LOW

Signiﬁcance of PMI’s impacts on society

HIGH

Key

Relevance to our stakeholders

Learn more about our sustainability materiality assessment andhow we identify our ESG priorities
Read PMI’s Sustainability Materiality Report4Philip Morris International: Reduce Post-Consumer Waste Strategy | ESG Framework

ESG Framework

I M PAC TO P E R AT I O N A L

I M PAC T

PRODUC T

Our ESG framework showcases these priority ESG topics. This framework recognizes two distinct
forms of issues: those that relate to our products (what we produce) and those related to ourbusiness operations (how we produce).

E

S

G

ENVIRONMENTAL

SOCIAL

GOVERNANCE

Product healthimpact–Sales, marketing,and consumer
communications–
Innovation inwellness andhealthcare

Responsible R&D–
Product reliability–
Nicotine science

Materials andproduct eco-design–
Post-consumer
waste

Climate–
Water–
Biodiversity

Diversity and inclusion–
Socioeconomic wellbeing of tobacco-farming
communities–
Human capitaldevelopment

Business integrity–
Respect forhuman rights–
Sustainable supply
chain management

Operational discharge–
Animal welfare

Labor standards–
Health and safety at work–
Employee well-being–
Philanthropy

Stakeholder engagement–
Data privacy–
Fair fiscal practices

5Philip Morris International: Reduce Post-Consumer Waste Strategy | Our sustainability strategy

Our sustainability strategy• Impact-driven approach to sustainability• Separate identification of environmental and social impacts• Distinct forms of social and environmental impacts—• PRODUCT IMPACT: those impacts generated by our products (what we produce)•O PERATIONAL IMPACT: those impacts generated by our business operations (howwe produce)• 8 impact-driven strategies: 4 on product impacts + 4 on operational impacts

 governance-related topics define our ability to successfully address environmental and social issues•9

REDUCE
POST-CONSUMER
WASTE

6

Philip Morris International: Reduce Post-Consumer Waste Strategy | 2025 Roadmap

2025 Roadmap

Priority ESG topics
and primary SDGs

Goals

Progrein 2021

1 Intentionally work toward phasing out cigarettes by
Product health impact
Purposefully
ensuring that smoke-free products represent atphase out
11 headline goals
connected to 8leaststategies.
Our roadmap
outlines
30% of our shipment
volumes andmore thanour key commitments andcigarettesof our net revenues by 2025 while continuing to
informs the route of our long-term halfplan.
reduce our combustible shipment volume

Maximize thebenefits ofsmoke-free
Purposefully
products
phase
out

2

1

I M PAC T

PRODUCTcigarettes

I M PAC T

PRODUCT

Progress
Product health impact;
Develop and commercialize science-basedPriority ESG topics
and primary SDGs
Sales, marketing, in 2021
smoke-free alternatives, making them available
and consumer communicationsin 100 markets (of which at least half in lowIntentionally work toward phasing out cigarettes by Product health impact
andthatmiddle-income
markets)
and continuingtoensuring
smoke-free products
representatincrease
totalvolumes
numberand
ofmoreusersthanleast 30%of ourtheshipment

Goals

Maximize thebenefits ofsmoke-free
Seek netproducts

half of our net revenues by 2025 while continuing to
reduceour combustible
shipment
volume3 Deployrobust youth
accessprevention programs in2

positive impact inwellness and3healthcare

Seek net
positive impact inwellness
Reduceandposthealthcare

4

Reduce postconsumer waste

5

indirect retail channels and ensure that sales

Product health impact;
Develop and commercialize science-basedof ouralternatives,
products abide
ouravailable
Marketing Codes
Sales, marketing,smoke-freemakingbythem
and consumer communicationsin 100 markets (of which at least half in low4 middle-income markets) and continuing toandInnovation in wellness andLeverage scientific and development capabilities toincrease
the totalat
numberof users
healthcare
generate
least USD
1 billion in annual net

revenues from products in wellness and healthcare

Deploy robust youth access prevention programs inindirect retail channels and ensure that salesof our products abide by our Marketing Codes
Leverage scientific and development capabilities togenerate at least USD 1 billion in annual net
revenues
from products in wellness and healthcare
5

Reduce post-consumer waste and prevent littering
by implementing comprehensive programs covering
all our consumables

consumer waste
6

6

7

empoweredand inclusive
workplaceI M PAC TO P E R ATI MI O
P AN
C TA LO P E R AT I O N A L

Foster anempoweredand inclusive
workplace
Fosteran

Improve thequality of lifeof people
Improvethein our 8
supplyofchain
qualitylife
of people in our
supply chain

Tackle climatechangeTackleclimate9

Materials and product eco-design;
Post-consumer waste

7
Follow
eco-design and circularity principles for all
Nurturea more diverse culture that promotes
smoke-free electronic devices

equity and inclusion by providing access to lifelong
learning to all our employees and improving genderand local representation in management globally

Nurture a more diverse culture that promotes
equity and inclusion by providing access to lifelong
learning to all our employees and improving genderand local representation in management globally
8

Materials and product eco-design;
Post-consumer waste

Follow eco-design and circularity principles for all

Reducepost-consumer
waste andprevent litteringsmoke-freeelectronic
devices
by implementing comprehensive programs covering
all our consumables

Diversity and inclusion;
Human capital development

Diversity and inclusion;
Human capital development

Eradicate systemic child labor in our tobacco
supply chain

Socioeconomic well-being of
tobacco-farming communities

Eradicate systemic child labor in our tobacco
Socioeconomic well-being of
9
supplychain all contracted tobacco farmers maketobacco-farming
communities
Ensurea living

income, and partner with our direct suppliers to
Ensureall contracted
tobaccomakea living
promotea living
wagefarmers
for their
workers
income, and partner with our direct suppliers topromote a living wage for their workers
10

Achieve carbon neutrality in our operations andClimate10

accelerate
our decarbonization
netClimate
zero
Achievecarbon neutrality
in our operationstowardandacrossvalue chaintoward net zeroaccelerate
ourourdecarbonization
across our value chain

11

Biodiversity; Water
Promote biodiversity, address critical water
challenges,
ensureno conversion
challenges,
ensure noconversionof natural of natural
ecosystems,
halt deforestation
ecosystems,
and haltand
deforestationin both our in both ourtobaccoand pulp
andpulp
paper
supplychainstobacco
and
and
paper
supply chainschangePreserve
Preserve
naturenatureInnovation in wellness andhealthcare

11

Progress with challenges

Promote biodiversity, address critical water

Progress with challenges

On track

On track

Biodiversity; Water

Progress further than anticipated

Progress further than anticipated

7

Philip Morris International: Reduce Post-Consumer Waste Strategy | Our Sustainability Index

Our Sustainability Index
Progress on our Roadmap measured by a set of key performance indicators that collectively form
our Sustainability Index, which links executive compensation and ESG performance.

Key performance indicators

I M PAC T

2025
aspirations

1

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

12.8%

>30%

2

Smoke-free product adjusted net
revenue ratio (smoke-free/total)

29.1%

>50%

3

Number of markets where PMI smokefree products are available for sale

71

100

4

Proportion of markets where PMI smoke-free products areavailable for sale that are low- and middle-income markets

43%

>50%

Total number of users of PMI’s smokefree products (in millions)1

21.7

Proportion of shipment volume covered bymarkets with youth access prevention programsin place in indirect retail channels.

91%

>90%

Annual net revenue from
wellness and healthcare products(in billions USD)

0.1

≥1

Proportion of shipment volume covered by markets with
anti-littering programs in place for combustible cigarettes

n/a

≥80%

9 pilots

≥80%

n/a

100%

62

1,000

5

PRODUCT

2021
performance

6

7

8

9

Proportion of shipment volume covered bymarkets with end-of-life take-back programsin place for smoke-free consumables

Proportion of PMI smoke-free devices
10 with eco-design certification
11

Cumulative number of smoke-free electronic devices
refreshed or repaired since 2021 (in thousands)

I M PAC TO P E R AT I O N A L

Contribution
to total
index score

85%

15%

Product Sustainability

100%

31.1%

35%

n/a

70%

5

10

12

Proportion of women in senior roles

13

Proportion of PMI employees who have accessto structured lifelong learning offers

14

Cumulative number of human rights impact assessments
conducted since 2018, with findings addressed

15

Prevalence of child labor among contracted
farmers supplying tobacco to PMI

1.8%

0%

16

Proportion of contracted farmers supplying
tobacco to PMI who make a living income

67%

100%

17

Net carbon emissions in scope 1+2(in thousands of metric tons)

357

0

18

Absolute carbon emissions reduction in scope 3 versus
2019 baseline (in line with science-based target)

17%

25%

Proportion of tobacco purchased at no risk of
deforestation of managed natural forest andno conversion of natural ecosystems

37%

19

KPI
weight

67%

50%

50%

Operational Sustainability
SUSTAINABILITY INDEX

100%

100%

33%
100%

1 During 2022, we intend to develop a new 2025 aspiration related to the total number of users of PMI smoke-free products. See page 45.

 ead more about the mechanics of the Sustainability Index and the definitions and methodsR
underlying its constituent KPIs in PMI’s ESG KPI Protocol.
8Philip Morris International: Reduce Post-Consumer Waste Strategy | Reduce post-consumer waste strategy

Reduce post-consumer waste strategy
The right thing to do
At PMI, we believe we can and should play arole in reducing waste from our products andaddressing the issue of littering by helping
develop and scale up innovative solutions.
Reducing and appropriately managing postconsumer waste means we can extract, convert,
and use fewer raw materials from a planetwith limited natural resources. Moreover,committing to the safe and responsible
disposal of this waste is the right thing to do,
as we share society’s concerns regarding theimpacts of litter—such as pollution and harm
to wildlife. We recognize our role in working topreserve natural environments.
The business case
Beyond ecological considerations, inadequate
post-consumer waste management andlitter carries societal and financial impacts
ranging from cleanup costs to perceptions of
untidiness and reduced safety in areas withhigh litter prevalence. Appropriately addressing
post-consumer waste helps us enhance ourbrand equity and company reputation andmeet consumer expectations. It also allows
us to mitigate implications for our bottom
line, as producers increasingly are asked toparticipate in cleanup costs, for instance.
Finally, it motivates us to innovate in a way thatcan drive competitive advantage by devisingmore circular value chains. These value chainsare linked not only to less waste and less litterbut also to better use of materials and higher
operational efficiency—all of which are good forour triple bottom line.

9Philip Morris International: Reduce Post-Consumer Waste Strategy | Reduce post-consumer waste strategy

O U R A S P I R AT I O N S

SIDevices

Consumables

Sustainability Index

Packaging

100%

2022

recyclable inner liners by year-end¹

2023

2025

70%

effective recycling rate of
our IQOS devices²≥1 millionSI

smoke-free electronic
devices refreshed or repaired(cumulative since 2021)

≥80%

SI

of shipment volumes coveredby markets with anti-

100%of packaging made withrecyclable materials

littering programs in place
for combustible cigarettes

100%

SI

of smoke-free electronic devices
introduced on the market asof the end of 2025 that haveeco-design certification

≥80%

SI

of shipment volume coveredby markets with end-of-lifetake-back programs in place forsmoke-free consumables

100%of PMI smoke-free productusers have access to collection
and recovery of devices

95%
of packaging materials comingfrom renewable sources

15%
reduction of packaging materials
weight versus 2018 baseline80%
effective recycling rateof our IQOS devices²

1
2

For all markets where possible in compliance with local regulatory requirements.
Effective recycling rate is calculated based on the proportion of device sales volume covered by the CIRCLE hubs
program multiplied by the recycling rate of devices at the CIRCLE hubs (weighted average).

10

Philip Morris International: Reduce Post-Consumer Waste Strategy | Our management approach

Our management approach
Our intention is to preserve resources, reduce waste, and prevent
inappropriate disposal, including littering.
We do this by designing our products with the principles of circularity and waste reduction in mind,
accounting for the products’ environmental impact at the early stages of development and offering
consumers solutions to play their part and dispose of end-of-life products appropriately.
To reduce post-consumer waste across our portfolio, we seek to design and implement impactfulstrategies tailored to our various products and packaging and tied to specific targets.
• Cigarettes: We aim to reduce cigarettebutt littering by encouraging behavior
change through impactful awarenessraising campaigns and by empowering
consumers to dispose of cigarette butts
appropriately. We also intend to tackle theissue at the source, continuously working
to replace the plastic in filters with better,more sustainable alternatives.
• Smoke-free consumables: As we grow oursmoke-free business, we seek to ensure thatthe consumables used with our electronic
devices are disposed of responsibly at theirend of life and that users have access totake-back and recycling schemes that havean environmental benefit, are economically
viable, and are valued by consumers.
Further, we strive to design new generationsof consumables with waste reduction andrecyclability in mind.
• Smoke-free electronic devices: To reducethe depletion of finite resources, we aim
to integrate sustainability into our productdesign, drive circularity by improving
recyclability, and increase opportunities torefresh and repair used devices.

• Packaging: We strive to minimize
packaging materials and improve theircircularity by increasing their recyclability
and promoting the use of materials madefrom renewable resources.
Our strategies and related initiatives are guided
by a set of policies and principles, including ourEnvironmental Commitment, Anti-Littering
Policy, and Sustainable Design Framework,
complemented by specific internal guidelines.
In 2021, to accelerate the delivery of a smokefree future, PMI established a new category
management structure for its smoke-freeand combustible cigarettes businesses. Our
President, Smoke-Free Products Category &Chief Consumer Officer, and our President,
Combustibles Category & Global Combustibles
Marketing, are responsible for driving ouragenda on post-consumer waste management
for their respective categories. Additional
efforts are steered cross-functionally. With
regard to our smoke-free products, we set
up a dedicated cross-functional governanceboard in 2021 which oversees strategies andprogress related to our device life extension
and consumables end-of-life programs.

11

Philip Morris International: Reduce Post-Consumer Waste Strategy | Addressing cigarette butt littering

Addressing cigarette butt littering
partnerships, portable disposal solutions, andimprovement of public equipment solutions.

Our approach
Around one million tons of cigarette filters areproduced annually across the tobacco industry.
Although most are disposed of properly postconsumption, too many are casually littered into
the environment.
To tackle cigarette butt littering, we apply athree-pronged approach:
1. Design for circularity: Invest in R&D towardfilters made of more sustainable, plastic-freealternatives that allow faster biodegrading,resolving the issue of plastic litter altogether.
2. E
 ncourage behavioral change: Inspirechange in consumer habits through impactfulanti-littering awareness programs andinitiatives to empower consumers to disposeof cigarette butts properly. These initiatives
include communications campaigns andcleanup activities to raise awareness,

3. 
Reduce litter on the ground throughefficient and cost-effective collection
schemes: In the EU, cigarette manufacturers
will be required to contribute to the costsof collecting and cleaning up cigarettebutt litter. The Single-Use Plastics (SUP)
Directive requires that producers participate
in industry-wide Extended Producer
Responsibility (EPR) schemes. EPR is anestablished governance scheme for circularwaste management; it is now being used
for the first time in the EU to address the
problem of littering. We support the conceptof an industry-wide EPR, provided such
schemes are managed in a cost-efficient,proportionate, and transparent way that
addresses the objectives of reducing litterand changing consumer behavior.

WHAT ARE CIGARETTE FILTERSMADE OF?
The main constituent of cigarette
filters is cellulose acetate (CA), abioplastic made from wood-based
cellulose. Contrary to common belief,
CA does biodegrade over several
months or years (depending on thesurrounding conditions) and does notaccumulate in the environment overtime. In contrast, conventional plastics
made from petrochemicals takehundreds of years to degrade, often
breaking down to form microplastics.

12

Philip Morris International: Reduce Post-Consumer Waste Strategy | Addressing cigarette butt littering

Encouraging behavior change

Raising awareness globally

While many consumers disposeof their waste properly, too muchwaste ends up in the environment.
We seek to help change behaviors
to prevent cigarette butt litteringand encourage proper waste
disposal. To that end, we run global
and local awareness and antilittering campaigns.

As in previous years, we had the opportunity
in 2021 to join the annual World Cleanup Day(where COVID-19 conditions allowed it). Our
affiliates’ participation in this global action—
the world’s largest litter cleanup event—is partof our public sensitization efforts and signals
our broader commitment to tackle the issueof cigarette butt littering. While the pandemic
limited many of the events we had planned,
around 3,150 volunteers across 53 countries(including PMI employees and their friends
and family members) actively contributed topicking up around 17 tons of litter.

Tackling the issues of cigarettebutt littering locally
Smoking habits, environmental awareness,and disposal practices vary by country, so
combating cigarette butt littering requires
tailored approaches. Accordingly, our affiliates
follow a global methodology while also focusing
on impactful, context-based strategies
appropriate for their respective markets.
These local anti-littering campaigns are run
by our affiliates, with central support andguidance. In 2021, we had active campaigns in
46 countries.

We added a global challenge element to theactivity through a partnership with Litterati,
whereby participants could download a mobile
app allowing them to log, tally, and share howmuch litter they collected.

OUR WORLD IS NOT AN
ASHTRAY
We also further developed Our World Is Not
an Ashtray, a web-based corporate platform
to educate, inspire, and engage the public on
the issue of littering. Through this campaign,
we share facts and figures, testimonials, andcalls to action.

13

Philip Morris International: Reduce Post-Consumer Waste Strategy | Addressing cigarette butt littering

Behavior change through design
with Mindshift
Philip Morris Nordics commissioned Mindshift
to carry out a study on the effects of nudging
behavior of adult smokers. Mindshift, who
specialize in the use of research, data, anddesign to create behavioral change, designed
innovative, attention-grabbing refuse installations to reduce the number of cigarettebutts on the ground and encourage adultsmokers to dispose of their butts safely. The
result? A 208% increase in smokers using cigarette disposal bins.

CASE STUDY
Partnering up to tackle the littering
problem through innovation in Mexico
We also partner with civil society
organizations on cigarette butt collection
projects as part of our wider awarenessraising efforts and with a view to developing
viable recycling solutions for cigarettebutts. For example, our affiliate in Mexico
developed a comprehensive communication
campaign that engages adult smokers andother citizens in helping to solve the problemof waste management. The initiative hascreated a nationwide network of volunteer
ambassadors who bring communities
together to collect cigarette butts, with morethan 400 collection points nationwide. The
team has also partnered with Ecofilter, anorganization that has developed an innovative
biotechnological treatment that regenerates
cellulose acetate into cellulose pulp.
Read more on our case study here.

14

Philip Morris International: Reduce Post-Consumer Waste Strategy | Smoke-free consumables

Smoke-free consumables
We seek to minimize the environmental
impact of the consumables used in oursmoke-free category. These include theheated tobacco units (HTUs) used with ourheat-not-burn products (including the HEETS
brand used with IQOS 3 DUO and previous
generations, the TEREA sticks used with the
new IQOS ILUMA , and the Fiit sticks used withlil devices), as well as the VEEV pods used with
our e-vapor device.
With each product launch, we will evaluate theneed for a consumables take-back program
based on environmental impact, consumer
need, and market feasibility.
Long term, we aim to reduce our postconsumer waste by design and explore
low-carbon, recyclable, and biodegradable
alternatives to the materials currently used inour smoke-free consumables. In the interim,
we are focused on establishing services tohelp our adult consumers reduce the end-oflife impact of our products.

15

Philip Morris International: Reduce Post-Consumer Waste Strategy | Smoke-free consumables

Deploying anti-littering andtake-back programs

To further mitigate the risk of littering, wehave set an ambition as part of our revamped
2025 Roadmap to implement context-based,
impactful anti-littering programs to collect andmanage post-consumer waste from our smokefree consumables in markets representing atleast 80 percent of our smoke-free shipment
volume by the end of 2025.
We will report our progress annually against
this new KPI. The programs align with global
requirements to ensure consistency andcomparability over time but are adapted toSupply of raw
materials &components

Manufacturing
process

deployment realities in each market. In 2021,
we piloted such programs in nine markets—allowing us to gather valuable insights for a
global rollout.
As these pilots unfold, we will continue tomonitor their progress and share learnings
globally. The insights and improvement
opportunities will fuel the rollout of
consumables take-back and recycling
programs globally by 2025.

Commercialization

Use

Disposal

Returned
devices

Preserve
Proper device care

Second life

RecycleProduct refreshor repairdevices back into
raw materials

16

Philip Morris International: Reduce Post-Consumer Waste Strategy| Smoke-free consumables

Smoke-free electronic devices

By integrating sustainability
considerations into our productdesign—from development
to end of use—we can reduce
environmental impacts as well as
associated costs.
With respect to our smoke-free productdevices, our 2025 eco-design and circularity
ambitions are as follows:•Provide access to device collection andrecovery to all IQOS users.
•
Continue to reduce the carbon footprintof our smoke-free products in line with ourscience-based targets.
•A chieve eco-certification for all PMI smokefree electronic devices introduced on themarket as of the end of 2025.
•Pursue improvements in areas such as
durability, design for repair, and recycling.
Meeting these goals relies on a systematic
approach that considers sustainability fromthe start of the product development process.
Our work is guided by our Sustainable Design
Framework, which accounts for impacts related
to materials selection and sourcing, components
production and product manufacturing,
distribution, use, and product end of life.
EMBEDDING ECO-DESIGNPRINCIPLES INTO OUR PRODUCTS
Each product generation we launchincorporates improvements in quality,ease of use, durability, or performance.

Extending smoke-free
product life cycle
We strive for our products to last andincreasingly aim to refresh and repair them sothey stay in use as long as possible. Achieving
this starts with imposing high standards ofquality and reliability (read more here) andextends to proper care, steps to refresh, repair,and refurbish devices, and recycling. In otherwords, we are evolving from a collection-forrecycling model to a collection-for-recovery
one. This means we need to develop criteria tofacilitate the product triage needed to expand
our refresh and repair capabilities.
In this context, we have identified the following
key dimensions to be addressed:(1) collection and triage of devices,distinguishing between those to berecycled and those to be refreshed or
repaired;(2) refresh and repair capabilities that meet
quality requirements; and(3) re-marketing of products.

17

Philip Morris International: Reduce Post-Consumer Waste Strategy | Smoke-free consumables

Packaging

We strive to minimize packaging
materials and improve theircircularity by increasing theirrecyclability and promoting
the use of materials made fromrenewable resources.
Reducing and improving packaging
Our approach to packaging contributes
significantly to our efforts to preserve andprotect the planet’s resources.
We use packaging for all our products,
including cigarettes and smoke-free electronic
devices, consumables, and accessories.

percent of the volume of board and paper wesourced for our packaging came from supplierswith Chain of Custody (CoC) certified
according to the Forest Stewardship Council(FSC), Programme for the Endorsement ofForest Certification (PEFC), or Sustainable
Forest Initiative (SFI) standards.
Working with our major suppliers, we
continued to roll out the replacement of the
packaging board used in our HTU and cigarette
packaging with a 10 percent lighter alternative.
By the end of 2021, we completed some of the
projects within our board weight reduction
program, enabling us to save an estimated8,500 tons of board without compromisingpack quality.

We aim to develop solutions that minimize
packaging materials and improve theircircularity without compromising protection
and convenience. We are driving our approachthrough ambitious commitments.
We aim to achieve:• 100 percent recyclable inner liners by theend of 2022
•
100 percent of packaging made withrecyclable materials by 2025
• 95 percent of packaging materials made fromrenewable sources by 2025
• 15 percent reduction in packaging weight by
2025 (versus 2018 baseline)
Reduce packaging
Our first ambition is to decrease the volume
of materials used in our packaging. We focus
first on board, the primary material used in our
packaging. In 2021, we estimate that over 70

18

Philip Morris International: Reduce Post-Consumer Waste Strategy | Smoke-free consumables

Our affiliate in Canada launched its smokefree recycling program at the end of 2021,
partnering with TerraCycle and inviting
consumers to return their used heated
tobacco units, VEEV devices, and any
branded vape pod (including VEEV) at morethan 120 convenient locations.

In March 2021, our affiliate in Mexico
launched its take-back program for
HTUs, with special collection bags madeavailable to adult users at IQOS stores.
The heated tobacco units are thenprocessed by our partner Ecofilter using
an innovative biotechnological treatmentthat regenerates cellulose acetate into
cellulose pulp. Read more in the case study
available here. By year-end, more than one
in 10 adult users was returning their usedconsumables to the stores.

In Switzerland, at the end of 2021, we launched apilot take-back and recycling program for heated
tobacco units. Adult users of our smoke-free
products can now collect HTUs in special bags andreturn them to our IQOS branded stores in person
or via mail. We then send the collected HTUs to ourrecycling partner, TerraCycle.

For the launch of VEEV in Finland in 2021, we
took into account the consumer expectation of
convenient recycling solutions for pods. Collection
points have been established in 470 locations aroundthe country. We also provide reusable collection
pouches to consumers for greater convenience.

In Guatemala, we provide cornstarch resealable
bags in which consumers can place their used
HTUs and return them to collection points
across the country. Meanwhile, in Costa Rica,
consumables have been collected since December
2021 and used for ongoing research by the
Chemical Regency of the University of Costa Rica.
Various alternatives for recycling are currently
under evaluation, including the production ofbiochar, a soil improvement solution.

19

Philip Morris International: Reduce Post-Consumer Waste Strategy | Looking ahead

Tackling littering and working to develop
products that further integrate eco-designprinciples, driving significant waste reduction andaddressing the issue at the source is our key focus
when it comes to addressing the environmental
impact of our products. We are also are taking
the necessary steps to commercialize secondlife devices. We plan to expand the collection ofused devices and further test first-level triage
processes to improve the recovery process andAs we continue to embed sustainable
design principles in our next generation
products, we will continue to systematically implement throughout our productdevelopment. Research will continue toidentify technologies and materials thatcan enhance the overall environmental
profile of our smoke-free product portfolio.
As we move along in our eco-design certification ambition, we are engaging with
eco-labeling organizations to support
product category definitions for electronics
and translate the insights into our productdevelopment process.
Bin Li, Chief Product Officer

our repair and refresh
capabilities. As thesecapabilities strengthen
over time, the new product generations will be
more repairable by design, and we expect anincreasing number of devices to be sorted forrecovery and second life.
Stefano Volpetti, President, Smoke-Free
Products Category & Chief Consumer Officer

Anti-littering Programs are an importantpart of our strategy and will continue to be
deployed and expanded across the countries
in which we operate, in coordination withkey stakeholders and partners. We will
intensify our efforts to research and apply
effective solutions to increase awarenessof the littering issue among adult smokers,
and we will continue to use our brands as
carriers of those messages when possible.
Meanwhile, we continue investing in R&D
to find solutions that can successfully help
us remove plastic from the filters of our
combustible products, by exploring andassessing alternative filtering materials
that can have less negative impact on
the environment and completely replace
cellulose acetate.
Werner Barth, President, Combustibles Category & Global Combustibles Marketing20

Philip Morris International: Reduce Post-Consumer Waste Strategy | Additional resources

Additional resources

OUR WORLD IS
NOT ANASHTRAY hilip MorrisP
Integrated Report2021

 hilip Morris Low Carbon
P
Transition PlanOur World Is Not
an Ashtray

Find out more on our Post-Consumer Waste Strategy
Discover more additional resources
21

Read more on https://www.pmi.com/sustainability