The Index

The 2020 Tobacco Transformation Index™ represents the first comprehensive effort to evaluate tobacco companies’ commitments and actions as they relate to tobacco harm reduction.

The 2020 index assesses the activities and performance of the world’s 15 most globally and regionally influential tobacco companies as they pertain to tobacco harm reduction. This includes analyzing and comparing companies’ respective product offerings, sales performance, and capital investments for both high-risk tobacco products and reduced-risk alternatives. The 2020 index also compares companies’ activities and performance across 36 countries, which are divided into groups of low-medium income (LMIC) and high-medium income (HMIC).

By monitoring and critically evaluating tobacco companies’ behavior, including actions that either support or impede tobacco harm reduction, the Index provides objective, transparent information to all stakeholders and incentivizes companies to act more quickly and responsibly than they otherwise would.

Key Findings

Harm reduction progress is extremely limited. The tobacco industry is not phasing out cigarettes or transitioning smokers to reduced-risk alternatives quickly enough.

The 15 companies assessed by the 2020 index achieved only a marginal decline in cigarette sales, from 4.9 trillion to 4.8 trillion sticks (-1.2% CAGR) globally, during the review period of 2017-2019. At this rate, it will take decades to eliminate smoking, meaning many more smokers will die and society will continue to bear the dire health and economic consequences of high-risk tobacco consumption.

A small group of companies have made public commitments to harm reduction, but none have shifted their focus enough to ensure the accelerated decline of cigarettes and other high-risk products.

Six of the 15 companies evaluated have acknowledged their role in tobacco harm reduction and made commitments to tackle the challenges of tobacco-related death and disease. However, these companies have so far failed to shift a significant share of their sales towards reduced-risk products. In 2019, only two companies achieved more than a single-digit share of total sales from reduced-risk products, while other companies offering reduced-risk products averaged only 3%.

These figures show that, despite their commitments, even the highest-ranked companies have much more to do to translate their harm reduction strategies into meaningful results.

The majority of companies have not made any commitment to harm reduction and/or continue to set targets to increase sales of high-risk tobacco products.

Nine of the 15 companies assessed fail to acknowledge any role in tackling the challenges of tobacco-related death and disease, and have made no explicit commitment to harm reduction. Collectively, these companies account for almost 60% of global cigarette volume sales and dominate in low- and middle-income countries, where the highest number of smokers live.

The highest-ranked companies in the index are mostly publicly traded multinationals, while private and state-owned companies lag behind.

The six companies at the top of the ranking are all publicly traded. More stringent reporting requirements, added scrutiny from investors and other stakeholders, and the international scope of many of these companies all may encourage greater responsiveness to tobacco harm reduction. In comparison, private and state-owned companies, which do not have the same imperatives or incentives to respond to external influences, all rank near the bottom of the index.

Differing ownership structures create different incentives for companies in relation to tobacco harm reduction. However, the ongoing crisis of tobacco-related death and disease demands a response from the entire industry. Private and state-owned companies in particular should be called upon to do more, and should voluntarily disclose more details to inform their stakeholders.

Tobacco companies are focusing most of their reduced-risk product efforts on higher-income countries, while high-risk product sales in lower-income countries continue to grow.

Companies that offer reduced-risk products are mostly focusing their efforts on selected high-medium income countries, where overall smoking rates are lower and cigarette sales are already declining.

While there may be legitimate business reasons for this discrepancy, by allowing it to persist, companies risk the impression that they are merely being opportunistic or are not truly committed to tobacco harm reduction. In order to meaningfully displace cigarettes and other high-risk products, it is essential that companies’ harm reduction efforts address all markets, especially those where the largest proportion of the world’s smokers live and harm reduction could have the greatest impact.

Better disclosure and greater overall transparency are needed.

Transparency is essential for tobacco harm reduction to be effectively implemented and evaluated. In general, companies should disclose as much detail as possible concerning their relevant policies, strategies, and performance, as well as their stances on and responses to public policy and other external factors influencing the trajectory of tobacco harm reduction. However, the index finds there is currently a significant lack of disclosure, with only six of the 15 companies covered scoring points for transparency indicators.

Read the full report

The 2020 Index Ranking Report outlines the results of the first edition of the Tobacco Transformation Index™, including overall key findings and detailed analysis of company rankings in each of its six measurement categories. It also provides individual profiles and summary results for each of the 15 companies in the index scope, which account for approximately 90% of current global tobacco product volume sales.

Learn More About the Methodology

The 2020 index methodology was developed through extensive stakeholder engagement, in-depth research, and expert review. Click below to learn more and download the full methodology.