The 2022 Tobacco Transformation Index Demonstrates Differentiated Progress Toward Harm Reduction Across The 15 Largest Tobacco Companies
The Index was created to accelerate the reduction of harm caused by tobacco use by ranking the worlds 15 largest tobacco companies on their relative progress or the lack thereof.
New York, Sept. 28, 2022 (GLOBE NEWSWIRE) --
- High-risk products made up around 95% of retail sales volume across the 15 largest tobacco companies in 2021; Reduced-risk products 5%
- Tobacco harm reduction momentum is developing across a subset of the 15 companies, albeit to varying degrees
- Companies analyzed across six categories and 35 indicators on their actions to reduce harm caused by tobacco use; Swedish Match making the most relative progress
The second edition of the Tobacco Transformation Index (“Index”), an initiative of the Foundation for a Smoke-Free World, has been published after two years of research into the efforts of the world’s 15 largest tobacco companies to reduce the harm of their products. The results in the 2022 Index demonstrate that the majority are delivering limited progress, with high-risk products (HRPs, cigarettes and combustible tobacco) still accounting for around 95% of retail sales volume.
The Index was created to accelerate the reduction of harm caused by tobacco use by ranking the world’s 15 largest tobacco companies on their relative progress or the lack thereof. This is the second iteration of the Index, the first was published in 2020.
The 2022 Index evaluates tobacco companies’ behavior across six categories and 35 underlying indicators that cover measures indicative of harm reduction, from product sales to capital allocation and marketing policies.
Swedish Match ranked first in the 2022 Index, with Philip Morris International, Altria, and British American Tobacco in second, third, and fourth places, respectively; Indonesian company Djarum ranked last.
The key takeaways from the 2022 Index findings are as follows:
- Only Swedish Match sells a greater volume of reduced-risk products (RRPs) than substantially more harmful combustibles, due in most part to the popularity of its snus in Sweden and non-tobacco nicotine pouches in the US. A key feature underpinning the Index is its adoption of the Relative Risk Assessment, based on a systematic review of scientific studies of the health risks associated with 15 nicotine products.
- Four Index Companies directed the majority of capital and R&D investments toward RRPs. In addition, five Index Companies, including three state-owned entities, made incremental investments or early indications of movement toward future production of RRPs during the review period.
- However, tobacco companies are also failing to invest in harm reduction in low- and middle-income countries, with the vast majority of sales for their RRPs concentrated in markets with the highest disposable income. Notably, RRPs are banned in a number of countries around the world.
David Janazzo, Index Program Officer and Interim Co-President, EVP Operations and Finance, and Chief Financial Officer at the Foundation for a Smoke-Free World, said:
“Transformation of the tobacco industry toward harm reduction remains inconsistent and in its early stages. That said, the 2022 Index demonstrates that differentiation is forming across the largest tobacco companies, related to measures of commitment, performance, and transparency. While some companies are making progress, others regressed. On the whole, they are all failing to deliver outcomes toward a world in which combustible, other forms of toxic tobacco, and smoking related death and disease are eliminated, in order to accomplish the Foundation’s mission of ending smoking in a generation.
“Based on the current trajectory of smoking rates, it is estimated that by the end of the current century up to one billion people will die of smoking. The majority of those will live in developing countries, which is why transformation of the tobacco industry is both essential and urgent.
“It is my hope that industry leaders will take heed of the findings in the 2022 Index to push forward and intensify efforts to strengthen harm reduction strategies and tactics.”
Erik Bloomquist, global nicotine and tobacco investment analyst and consultant, CFA and Chair of the Index Technical Committee, said:
“Institutional investors such as banks and pension funds are increasingly looking at harm and harm reduction. The Index is an important tool for those investors to constructively engage and encourage change in the market.
“The 2022 Index is a reminder of how far tobacco companies have to go. The differing and at times hostile regulatory standards around the world have made implementation of harm reduction more challenging, but many opportunities are not yet fully maximized.”
The 2022 Tobacco Transformation Index can be accessed here: www.tobaccotransformationindex.org
About The Tobacco Transformation Index:
The Tobacco Transformation Index is a Foundation for a Smoke-Free World initiative designed to deliver on a key goal and related purpose of the Foundation, namely, to drive the transformation of tobacco companies for the benefit of public health, and to inform the public about the activities of the tobacco industry that influence achieving a smoke-free world.
Interviews are available on request.
About The Foundation for a Smoke-Free World:
The Foundation for a Smoke-Free World is an independent, U.S. nonprofit 501(c)(3) grantmaking organization with the purpose of improving global health by ending smoking in this generation. The Foundation supports its mission through three broad categories of work: Health and Science Research; Agricultural Diversification; and Industry Transformation. Funded by annual gifts from PMI Global Services Inc. ("PMI"), the Foundation is independent from PMI and operates in a manner that ensures its independence from any commercial entity. For more information about the Foundation, please visit www.smokefreeworld.org
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