Inside Philip Morris International's Bold Net-Zero Strategy

Philip Morris International (PMI) has published its 2025 Climate Transition Plan, outlining its strategy to reach net-zero greenhouse gas emissions by 2040.

The plan aligns with the disclosure framework from the Transition Plan Taskforce, a UK initiative that provides a benchmark for corporate decarbonisation strategies, while expanding on PMI's Low-Carbon Transition Plan from 2021.

The document establishes interim targets for 2030, using 2019 as a baseline year. These goals include a 50% reduction in absolute Scope 1 and 2 emissions, a 33.3% reduction in Scope 3 emissions from forests, land and agriculture, and a 27.5% reduction in Scope 3 industrial emissions. Progress on these targets will be measured against the 2019 baseline.

"In a moment when it would be easier to extend timelines or hedge our ambitions, PMI has chosen to hold firm to its 2040 net zero commitment across all scopes," explains Jennifer Motles, PMI's Chief Sustainability Officer.

Revenue growth and emissions strategy

According to data from the World Health Organization, tobacco use had declined globally from one in three adults in 2000 to one in five by 2022. The shift is attributed to greater awareness of health risks alongside increased regulation and taxes.

Despite this trend in traditional products, PMI has seen considerable financial growth, fuelled by its portfolio of smoke-free products such as vapes.

"Our net revenues have increased by more than a quarter between 2019 and 2024 – strongly supported by our smoke-free business," says Jacek Olczak, CEO at PMI.

"Yet, within the same timeframe, we have consistently reduced greenhouse gas emissions, not only within our direct operations – where our control is greater – but also throughout our broader value chain, which accounts for the vast majority of our overall impact."

Even as the demand on its manufacturing operations has grown, PMI has made headway on its decarbonisation goals. Looking forward, PMI anticipates achieving carbon neutrality for its Scope 1 and 2 emissions by the end of 2025.

Following this milestone, it intends to allocate more resources toward its Scope 3 emissions, which constitute over 90% of its total carbon footprint.

Agricultural supply chain vulnerabilities

The Climate Transition Plan identifies PMI’s agricultural supply chain as the area of its business most exposed to climate-related risks.

The majority of PMI's land-use emissions come from its tobacco supply chain, with fertiliser use highlighted as a primary factor.

"Most of our material climate- and nature-specific impacts, risks and opportunities originate from our upstream value chain activities, particularly in our agricultural supply chain," PMI states in the document.

To address these issues, PMI has been running its Forest Positive programme for more than a decade, which focuses on forest conservation, restoration and sustainable land use.

PMI is also promoting regenerative agriculture with an emphasis on carbon sequestration, aligning with its Forest Land and Agriculture (FLAG) commitment.

Supplier engagement and external factors

The plan acknowledges that major external dependencies could impact PMI's ability to achieve its 2040 net-zero target. These factors include gaps in technology readiness, constraints in supplier capabilities, and limitations in renewable energy availability and infrastructure.

Over 90% of PMI's carbon footprint is from Scope 3 emissions, which are heavily influenced by these external elements.

"While Scope 3 emissions represent over 90% of our total carbon footprint and are largely influenced by external factors, we see major opportunities to create change, notably through strategic partnerships and supplier engagement efforts," the plan states.

To manage this, PMI has created a Supplier Confidence Model to forecast the probability of supplier-led emissions reductions. Its Sustainability Accelerator programme, which began with a small group of suppliers in 2023, expanded to 50 suppliers in 2025, covering 70% of its direct material footprint.

The manufacturing of electronic smoking devices and vapes also presents distinct challenges, including plastic and electronic waste. These products often require more energy-intensive manufacturing processes, which PMI notes in its plan.

PMI is tackling these issues through sustainable design practices, device collection programmes, and initiatives to extend device lifespans.

PMI also applies a shadow carbon price in investment decisions and has used internal carbon pricing since 2020 to better manage its manufacturing impacts.

"This isn't about being perfect – it's about being purposeful," says Jennifer. "It's a statement of trust in each other, in our partners, and in our collective ability to create the systems we need."