Index Program Officer's Insights

The Tobacco Transformation Index aims to accelerate the reduction of harm caused by tobacco use through a bi-annual ranking of the world’s 15 largest tobacco companies (“Index Companies”) on their relative progress, or lack thereof, toward harm reduction.

In so doing, the Index aims to provide a guide to the key measurements that indicate commitment to and progress toward the reduction of harm. The Index highlights tobacco company actions that can deliver the greatest reduction of harm within a timebound horizon. Furthermore, the Index identifies and measures the actions and performance that most effectively indicate a translation of commitment into practical outcomes.

2022 Index

The 2022 Index is the result of a process of company research, scoring, and ranking conducted by the Index Research Partner over the two-year review period from 2019 to 2021. As described in the Index Methodology report, the Index methodology is based on a set of 35 indicators organized under six categories of company actions and performance.

A key feature of 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. The review identifies the most harmful products (High-Risk Products; HRPs), of which cigarettes are the most widely sold and thus represent the greatest risk to global public health as well as Reduced-Risk Products (RRPs).

2022 Index Insights

The 2022 Index demonstrates that the transformation of the tobacco industry toward harm reduction continues to be inconsistent and at an early stage.

Index research indicates that HRPs accounted for about 95% of Index Company retail sales by volume in 2021. RRPs accounted for only 5%.

Simply put, the tobacco industry is not phasing out HRPs and/or transitioning smokers to RRPs quickly enough to achieve the Foundation’s mission of ending smoking in this generation. Both the transformation of the tobacco industry, and the acceleration of that transformation, are urgent.

At the same time, Index research demonstrates that:

• About half of the Index Companies have adopted strategies regarding tobacco harm reduction and, to varying degrees, are performing toward their objectives through product offers, sales, and investments over the review period 2019 to 2021.Within this group, some companies progressed, and others regressed in Index scoring due to their actions over the period compared to the first Index.
• The remaining group encompasses multiple companies that are potentially in the process of establishing early momentum as demonstrated by leading indicators associated with investments and/or strategies toward tobacco harm reduction – time will tell if transformation comes to fruition. Several of these companies remain essentially cigarette producers.

There clearly is much work to do.

The situation does not, however, mean that the Index has not identified change, including patterns of change.

In fact, the 2022 Index provides insights. Four Index Companies had their rankings either improve or decline. The scores of ten Index Companies increased, and the scores of five Index Companies decreased, compared to the 2020 Index results as restated for methodology changes. Recall that the Index is a relative ranking.

Significantly, the 2022 Index indicates that a pattern of differentiation is emerging across the 15 Index Companies. As measured by commitment to harm reduction, performance-based evidence of harm reduction, and transparency regarding actions relevant to harm reduction, the 2022 Index Ranking Report identifies and describes five differentiated clusters. The clusters are predicated on varying degrees of commitment, execution, and potential for change:

• Only one Index Company, Swedish Match, generated a majority of its sales through RRPs in 2021.
• Four Index Companies directed the majority of capital and R&D investments toward RRPs.
• Five Index Companies made early investments or indications of movement toward future production of RRPs during the review period.

The 2022 Index identifies that individual companies at the lowest ranks of the 2020 Index made or evidenced potential commitments to introducing or expanding the range and/or volume of reduced-risk products within their respective product portfolios. While it is still early days and real-world results are the most critical barometer, increased tobacco company focus on harm reduction is a factor that the Index will monitor and could ultimately benefit public health.

Looking Ahead

With the delivery of the 2022 Index, attention now will turn to the third Index cycle of research, including both technical work on Index design and evolution, scientific research, and policy research on the country context within which the tobacco industry operates.

From the Foundation’s perspective, the Index research program will include a continuation of funding and a related effort on working with stakeholders to identify and define key areas of research in support of Index evolution. For the Index Research Partner, priorities encompass a continuing focus on defining the critical measures of industry actions and performance, both qualitative and quantitative, which include translating qualitative factors into measurable and thus comparable indicators.

We look forward to working with all stakeholders as we strive to deliver a better understanding of the individual companies within the tobacco industry– and of the complex country contexts across which companies operate.

The Foundation for a Smoke-Free World is committed to open and ongoing dialogue with all stakeholders. We welcome comments and suggestions on the Index program. Please reach out to us.

David Janazzo
Tobacco Transformation Index Program Officer
Interim Co-President, Executive Vice President of Operations and Finance,
Chief Financial Officer
Foundation for a Smoke-Free World