The Tobacco Transformation Index evaluates Index Companies’ activities and performance, against six measurement categories and 35 indicators, relevant to tobacco harm reduction.
The Index is a relative ranking, meaning Index Companies are compared to each other rather than against an ideal state. The focus of the Index is on differentiating between Index Companies to increase competition and accelerate transformation, in the same way that other indexes have operated.
The Index consists of six measurement categories, each covering a distinct area of corporate activity and/or performance related to tobacco harm reduction. Each category is further broken down into subcategories which are measured based on quantifiable indicators.
The methodology includes 35 indicators that characterize an Index Company’s activities and performance in multiple areas. Each indicator has been included based on its relevance, feasibility, and materiality. For purposes of assessing Index Companies, each indicator is resolved to a numeric value based on analysis of relevant quantitative and/or qualitative metrics.
Each indicator is linked to one of three strategic pillars in order to provide a fully rounded view of each Index Company’s approach to transformation. The three pillars are defined as follows:
- Commitment: Addresses the extent to which the Index Company has incorporated the goal of tobacco harm reduction into its vision and strategy, its internal policies and codes of conduct, and its public stance and subsequent action.
- Performance: Addresses the Index Company’s quantifiable progress in phasing out HRPs, along with performance and investments associated with RRPs. Associated indicators represent the tangible results of the Index Company’s strategy.
- Transparency: Addresses the Index Company’s disclosure of information necessary for stakeholders to effectively monitor and evaluate its commitment and performance.
Indicators are distilled and translated into a single score for each category and sub-category, and the overall Index, using a transparent and balanced system of weights, metrics, and scoring.
- Weight: Each technical category, sub-category, and indicator is assigned a relative weight which represents its significance with regard to tobacco harm reduction.
- Metrics: Each Commitment and Transparency indicator has metrics against which the Index Company’s performance is scored. The metrics identify the necessary requirements the Index Companies need to satisfy to achieve a full score for each indicator. Where the Index Company is asked to fulfill more than one requirement to get a full score, the metrics description includes an ‘AND’ in capital letters to separate those requirements. Performance indicators are normalized and scored on a relative basis.
- Score: The Index Company is assigned a score for each indicator based on its performance against the specified metrics, normalization process, and any other adjustments, which is then calibrated according to the relative weight assigned.