HQ
UK
OWNERSHIP
Publicly Traded
RANK
5
(out of 15)
FINAL SCORE
1.62
(out of 5)

Company Overview

Imperial Brands has sales in both high-risk and reduced-risk products. It is one of the largest international companies, operating in 160 markets around the world. The company’s 2019 net sales of GBP8 billion were generated primarily by high-risk products, particularly cigarettes. Although sales of reduced-risk products increased by 49% on a yearly basis, they still accounted for GBP285 million in 2019, or only around 3% of the company’s totals. Imperial’s reduced-risk portfolio is centered on cartridges in the US, Japan, and Europe, heated tobacco in Japan, and snus and non-tobacco nicotine pouches in Europe. The company’s capital allocation has started to shift toward reduced-risk products, especially in R&D. It has also completed a series of reduced-risk-focused M&A investments.

Stance on Harm Reduction

Imperial Brands states its commitment to tobacco harm reduction as follows: “Our focus on transitioning adult smokers to potentially less harmful alternatives to cigarettes is aligned to our purpose: to create something better for the world’s smokers.” However, it doesn’t commit to phase out high-risk products, and its strategy of ‘Tobacco Maximisation’, which focuses on driving growth from high-risk products, remains one of Imperial’s three core objectives. It states: “Tobacco will be our core business for many years to come, generating the funds to invest in NGP.”

Notable Performance

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Strategy and Management

Imperial has made a commitment to tobacco harm reduction. It also discloses the specific percentage of performance incentives for senior leaders that are linked to harm reduction.
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Product Sales

Imperial’s reduced-risk sales account for a growing share of the company’s sales balance and are mainly focused on cartridges, one of the less harmful reduced-risk alternatives.
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Capital Allocation

The majority of Imperial’s R&D investments were devoted reduced-risk products during the review period. The company also acquired several reduced- risk product companies.
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Product Offer

Between 2017 and 2019, Imperial carried out multi-market launches of its cartridges in countries such as Russia, Germany, and Japan, but failed to offer the product in any low-medium income countries in the scope of the index.
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Marketing

Imperial Brands has a comprehensive marketing policy, with specific details on its application to different channels and on youth prevention. The company also monitors and makes disclosures on internal violations.
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Lobbying and Advocacy

Imperial’s code of conduct includes specific policies concerning political engagement. It also publishes its policy positions on its website and in its annual and sustainability reports.

Net Value Sales

In 2019
High-Risk Products
96.7%
Reduced-Risk Products
3.3%

Products Offered

In 2019
High-Risk Products
4
Reduced-Risk Products
5

Capital and R&D Investment

Over 2017-2019
High-Risk Products
51.9%
Reduced-Risk Products
48.1%

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