First tobacco transformation index goes live

On the 09/22/20 at 7:45AM


Tuba Raqshan

The index, launched on 21 September, provides metrics and insights into how the 15 largest tobacco companies globally are deploying (or not) their capital and resources in pursuit of ESG goals.

The Tobacco Transformation Index is administered by the Foundation for a Smoke-Free World, Euromonitor International, SustainAbility and an independent advisory panel of experts. The companies, both private and public, are measured according to criteria such as strategy and management, product sales, capital allocation, product offer, marketing, and lobbying and advocacy.

The index reviews performance of public companies such as Altria Group Inc., British American Tobacco Plc, Imperial Brands Plc., ITC Ltd., Japan Tobacco Inc. (JTI), KT&G Corp, Philip Morris International Inc. (PMI), and Swedish Match AB, as well as private firms such as Djarum PT, Eastern Co. SAE, Gudang Garam TbkPT and Swisher International Group Inc. It also tracks state-owned companies such as China National Tobacco Corp., Tobacco Authority of Thailand, Vietnam National Tobacco Corp.

The key findings from the Tobacco Transformation Index shows that the majority of the companies have not made any commitment to reduce harm and continue to set targets to increase sales of these high-risk tobacco products. Nine out of these 15 companies failed to acknowledge any role in tackling the challenges of tobacco-related death and disease and have made no explicit commitment to harm reduction.

The tobacco industry is not phasing out cigarettes or transitioning smokers to reduced-risk alternatives quickly enough. Cigarettes are the most harmful tobacco products in the market and represent around 95% of current tobacco industry sales. The 15 companies assessed by the 2020 Index achieved only a marginal decline in cigarettes sales, from 4.9 trillion to 4.8 trillion sticks (-1.2% CAGR) globally, during the review period of 2017-2019.

Overall sales of cigarettes by the companies in scope registered a 1.2% rate of annual decline in high-medium income countries between 2017 and 2019, according to the index. In that same period, sales of cigarettes in low-medium income countries increased by 1.7%. The Index highlighted the need of better disclosure and overall transparency.