The many faces of the green transformation in business

The many faces of the green transformation in business

The green transition is a topic that has already become an integral part of our daily lives. Politicians, businessmen, experts and ordinary people constantly talk about it. The general perception is that achieving environmental goals will cost a lot of money, which is of course true, and that the green transformation mainly affects energy, energy-intensive industries and transport, which must switch to electricity and hydrogen in order not to pollute the environment. In fact, what has been said is largely true, but it is far from exhaustive of all aspects of the green transformation.

In fact, they cover many more areas, businesses, spheres of life, sectors of the economy. This thesis was also confirmed by the Global Director for Sustainable Development of Philip Morris International, Miguel Coletta, who participated in the international forum “The Green Transition – Solutions and Challenges for Bulgaria”, which was held on October 15 this year in Sofia and was organized by Dir. bg and 3eNews. In his presentation, he noted that when people talk about the green transformation, they are far from thinking of tobacco companies like Philip Morris International, nor that it is not limited to providing clean energy and reducing carbon emissions. What the international industry leader has been doing in recent years proves this thesis. Its activities and activities in the direction of its sustainable development are of course related to the actual reduction of the carbon footprint, but to a much greater extent to the overall large-scale transformation of the business in implementation of the vision of building a smoke-free future. Over the past 12-plus years, Philip Morris International has invested more than $8 billion in research, development and commercialization of revolutionary smokeless products that are less harmful than conventional cigarettes. Thus, sustainable development turns from just a strategy into the core of the company’s business.

“Our goal is to make cigarettes a thing of the past, relying on solid science and technology to develop smokeless alternatives that are better choices for all adult smokers who would otherwise continue to smoke. By investing in scientific research and innovation development, we are actually investing in social and human capital, R&D opportunities, so that we can one day enjoy a world without cigarette smoke,” noted Coletta.

This transformation and, accordingly, the sustainable development strategy begins with Philip Morris International’s mission for a smoke-free future by offering smoke-free products, alternatives to traditional tobacco products and giving adult consumers the opportunity to choose a less harmful product.

At the same time, the green transformation at Philip Morris International is directly related to the development of innovations. Therefore, the company strictly adheres to its global goals related to sustainable development, and progress is measured and tracked in the company’s annual integrated report. There are four main directions of action in the field of sustainable development of PMI: investments in the development of products with reduced risk, business processes based on excellence, social responsibility and care for partners, local communities and the environment.

These areas reflect issues or opportunities where we believe we can have the greatest impact by committing to programs that can have a real impact on achieving the ambitious goals we have set for ourselves in each of these areas.

The goal of reducing the carbon footprint and using clean, green energy applies not only to the production of the company itself, but also to the raw materials and products of suppliers.

In this regard, the global director Miguel Coletta gives another example from business – the transport companies with which the company partners. Raw materials for the production of Philip Morris International products are transported from the company’s selected suppliers to its manufacturing facilities. In this regard, it is also important how the companies in the chain work for their green transition, so that their activity, which is directly related to that of Philip Morris International, also at some point becomes decarbonized, so as not to leave a carbon footprint related to the business and the production of the international tobacco company. According to Coletta, the achievement of carbon neutrality also goes through carbon neutral raw materials, materials, etc., delivered to the manufacturer along the chain.

Companies small or large, driven by the idea of reducing carbon emissions, should not forget about the other main elements of sustainable development – environmental pollution, respect for human rights and care for people’s health, because it is people who are the most – the important capital in every sphere of the economy. And given that climate change is already present and humanity is late in implementing measures against it, there is an urgent need to rethink business models and companies in society to change the way businesses operate.

Another important factor for the green transformation of the business is to measure the effect of the set goals. This is possible, according to Coletta, and at Philip Morris International they are successfully implementing it. By measuring its business transformation, every company will be able to know at any moment where it has reached in its transition period, what results it has achieved against the set goals, when it will reach 100%, what progress has been made in general and what needs to be done. draw more attention. Measuring these and other indicators also tells companies where to direct their investments to make them more efficient and sustainable. However, they are also an increasingly tangible factor for outside investors. Miguel Coletta’s observations show that in recent years investors are increasingly interested in the so-called ESG factors (the environmental, social and governance factors for evaluating the company or business – ed.) before proceeding with the investment of capital and in determining the risk of the upcoming investments. “We recently announced Philip Morris International’s new financial framework related to transformation and sustainable development, which regulates and links the financial instruments for investment in the company to the environmental, social and governance indicators of the impact of our business and the goals we have set for ourselves. In this way, we will increase interest in us as a company. But at the same time, we believe that this way we will engage more and more investors to support the transformation of our business. This was announced in September, when we launched a revolving financial instrument worth 2.5 billion dollars, tied to two of our main goals from the sustainable development strategy”, gives an example Coletta.

Investments are key to business transformation, to the products and services that companies bring to the market, to the innovations they need to introduce for the green transformation. Due to the different specifics of individual sectors of the economy, the state they are in at a given time, the type of company and other factors, some companies will find it easier to find funds to finance their green investments, while others will need attracting an external resource. For it to be successful, they will have to prove to their investors exactly what they will spend their money on. Therefore, they must also have clear and precise projects and goals. If again the strategy of Philip Morris International is taken as an example; – part of it is for the company to achieve carbon neutrality in all its internal activities by 2030. And by 2050, this should also apply to its entire supply chain. Thus, the company will transfer its goals and strategies to other companies as well, resulting in the overall goal of achieving a green economy that does not impact the environment.

Financing the own projects for the transition to a climate neutral business is not the only obstacle for the companies in the market. Innovation and know-how are also key to ultimate success. And here the difference between big and small is blurring. According to Miguel Coletta, not only large companies can transfer their experience and knowledge to small ones, the opposite is equally important and possible. The question is who invented and introduced some innovation that can be applied in another company or another business in general. Thus, the transfer of knowledge and experience also becomes an integral part of the overall green transition.