BUSINESS: 333 PRACTICES
Papastratos, in 2017 turned the page in its long history and, with a significant €300-million investment, transformed its factory in Aspropyrgos into an exclusive heated tobacco sticks production unit for IQOS.
For Papastratos, the sustainable development strategy is an opportunity for innovation, growth and long-term value creation. It is also a means of minimizing the impacts arising from our operation while at the same time maximizing efficiency and resource allocation towards a sustainable future.
Our goal of a tobacco-free future will be realized in a sustainable way. Accordingly, our priority is to address the health effects associated with smoking by encouraging adult smokers to switch to better science-based alternatives, ultimately making cigarettes a thing of the past.
On May 29, 1931, the Papastratos Brothers Tobacco Factory was inaugurated in Piraeus, a technological achievement for the emerging industry of the time, marking the beginning of a corporate path inextricably linked to the evolution of Greek industry, the economic development of the country, and the contribution to society.
90 years later, Papastratos has definitively stopped producing cigarettes, transforming into a technology and science company with the goal and vision of the end of cigarettes. This transformation, naturally, causes dynamic changes in various fields of interaction with the company's partners. However, it is a constant strategy of Papastratos to be "present" to the challenges that accompany this great change with the aim of successfully transitioning to a sustainable and inclusive future.
Stakeholders
In the context of formulating and optimizing our strategy for sustainable development and aiming to continuously improve its performance, Papastratos carried out a materiality analysis of sustainable development related to its activities, with the participation of internal and external stakeholders.
Papastratos pursues and cultivates continuous stakeholder contact, which is instrumental in providing feedback on stakeholder concerns and expectations, and is a prerequisite for achieving short-term and long-term strategic goals.
Through continuous communication with employees, partners, consumers, suppliers, local communities, NGOs, Public Health agencies and other social groups, it is possible to record the concerns and issues that concern them regarding the operation of the company but also general issues to which Papastratos could contribute or support.
More information on stakeholder engagement can be found in the Single Sustainable Development Report.
The new Sustainable Development Strategy launched in 2021 is long-term, as Papastratos President and CEO Christos Harpantidis said during the announcement, referring to the pivotal role that continuous development and change has in Papastratos' journey, likening the completion of 90 years with a moment of rebirth for the company. Setting the goal for Greece to be one of the first countries in the world to permanently stop smoking, Christos Harpantidis emphasized: "We want in ten years from today, the day we celebrate the 100th anniversary of Papastratos, to have made Greece , all together, a country where cigarettes will be, definitively, a thing of the past". And he added: "Celebrating our 90 years of history we are making a new beginning. Our new course. That of a company that changes, that evolves, that supports, that contributes, that works with passion for the better. That's why today is not just another day. It's another day."
Papastratos has always had its eyes on the future... From the factory in Piraeus, which brought a future to the Greek tobacco industry, to the current factory in Aspropyrgos, everything was and is the future. Which shares the benefits, creating new, well-paying jobs and a work environment of non-negotiable respect.
The future for us is a new way of looking at things and making the right decision now. And we took it, putting an end to cigarettes. At Papastratos we choose the action with a sign of common prosperity that leaves no one behind. We share these values with our people with whom we follow the same vision.
For Papastratos, the sustainable development strategy is an opportunity for innovation, growth and long-term value creation. It is also a means of minimizing the impacts arising from our operation while at the same time maximizing efficiency and resource allocation towards a sustainable future.
The sustainable development strategy integrates the priorities among the main issues that concern the interested parties (materiality analysis) and combines them with the business strategy and operational priority actions of the company. Based on the above synthetic approach, the 5 pillars of priorities were formed. The process we followed contained the following steps.
Analysis of essential issues
In the context of formulating and optimizing our strategy for sustainable development and aiming to continuously improve its performance, Papastratos carried out a materiality analysis of sustainable development related to its activities, with the participation of internal and external stakeholders.
The analysis was carried out in four phases:
Phase I: Identification of interested parties
PAPASTRATOS management has identified the relevant stakeholders, taking into account how they interact with PAPASTRATOS.
Phase B: Identification of evaluation issues
Subsequently, 18 sustainable development issues related to PAPASTRATOS activities were identified after investigating industry issues and taking into account the GRI Standards.
Phase C: Evaluation of issues by the interested parties
The evaluation of the issues was carried out by the administration through meetings and by the interested parties through an online survey. A total of 15 members of middle & senior management, including the CEO, as well as 1,301 stakeholders participated.
More information in the Single Sustainable Development Report.
On June 17, 2021, on the occasion of the celebration of the 90th anniversary of the opening of the first factory in Piraeus, and the main slogan is "We are reborn", the company presented its Strategy for Sustainable Development, with 5 pillars and clear, measurable goals with specific schedule of achievement.
Based on the above synthetic approach, 5 priority pillars were formed: Product Innovation, Exemplary Operation, Employees & Partners, Environment, Society and measurable objectives related to environmental protection and social contribution were adopted. Specifically:
1. Product innovation
By 2025, the number of smokers in Greece will have decreased by 1.5 million.
By 2023, 75% of Papastratos' net revenue comes from innovative alternative products.
2. Exemplary operation
By 2025, we commit to allocating 1,000,000 to actions to combat illegal trade.
By 2023, 100% of new electronic devices to carry age verification technology.
By 2023, smoke emissions at all stages of the production process have been reduced by 30%.
3. Employees and partners
By 2023, 40% of Papastratos management positions will be filled by women.
Until 2023, the people of Papastratos to contribute 9,000 days of voluntary contribution per year.
4. Environment
By 2021, single-use plastics should be eliminated in our facilities.
By the end of 2022, the PAPASTRATOS factory will be carbon neutral
By 2025, energy consumption and water consumption should be reduced by 20%.
5. Society
With regard to the regular and extraordinary community support initiatives we undertake each year, we are committed to directing our resources now:
By 50% in actions for the empowerment of women and their role in society as a whole.
By 50%, in actions to combat climate change.
From the first day we started our corporate transformation, at Papastratos we decided that "no change can be implemented if you don't change yourself first". That is why our sustainable development strategy concerns our people first of all. Consistently investing in our employees, we have moved forward with 3 important initiatives:
The positive impact on the public health of the general population from the company's commitment to the goal of a tobacco-free world, and its consequent overall sustainability strategy stemming from the decision to change and transform, is evident. Of course, there are parallel "benefits" from the company's focus on issues of environmental protection and ensuring an inclusive working environment.
More specifically, we note commitments/goals deriving from the Sustainable Development Strategy:
It is very optimistic, the fact that a Greek company, with roots in the country's primary production, managed over the years to innovate, differentiate and lead developments at a global level. It is also hopeful that Papastratos is developing based on ethical values that concern the good of society as a whole, as evidenced by the company's persistence in the vision of a tobacco-free future, which is a national goal for the next decade.
Consistently investing in our employees, we have moved forward with 3 important initiatives:
Implementation in Greece directly linked to Phillip Morris International's goals for a world free of tobacco smoke.
Research and Development is carried out exclusively by our parent company, Philip Morris International (PMI). For PAPASTRATOS, the utilization of PMI's scientific research for the development of innovative products, as well as ensuring the quality and safety of the products we have on the market, is of key importance.
The employees are helpers and participants in the company's effort. At Papastratos, the employees are the most important partner in the company's effort to make the vision of a better future, a future free of cigarettes, a reality.
Caring for people and creating a working environment of equal opportunities is a value that, for 90 years, has been an integral part of the DNA of PAPASTRATOS. We are committed to providing all our employees with equal opportunities, regardless of gender or other discrimination, and we are the first company in Greece to receive the "Equal Opportunity Employer" certification from the international organization Equal Salary Foundation. In 2020 we were awarded, for the sixth year in a row, as a "Top Employer" in Greece by the internationally recognized organization Top Employer Institute.
The vision of Papastratos and Philip Morris International is a world free of tobacco smoke. Its positive impact on public health, individually and collectively, is undeniable. At the same time, as one of the most historic companies in Greece, we become recipients of the imperative request: Our operation should offer more to society and the country as part of a wider corporate vision.
Papastratos' new journey that began in 2018 and its evolution into a technology company has as its starting point the goal of reducing the harm from cigarettes.
New trends for companies with the Papastratos footprint define socially responsible organizations to give a greater positive sign to societies than they receive. For Papastratos this is not another challenge, it is the only challenge and we intend to solve it through our strategy based on sustainable development practices. By investing in science and new technologies we can create value both for the company and for people, the environment and the country.
Operating in line with Phillip Morris International's vision for a world free of tobacco smoke, Papastratos has transformed itself into a technology company that today exclusively produces potentially reduced risk tobacco products. The flagship product, IQOS was certified by the US Food and Drug Administration (FDA) in July 2020 as a better choice than continuing to smoke. You confirm in this way, that Papastratos is deeply familiar with evolutionary changes. Changes that since the beginning of its business presence, exactly 90 years ago, aim to lead it steadily for the better.
The transformation of PMI and Papastratos from a leading tobacco company to a technology company 6 years ago has the principles of sustainable development at its heart. We decided to be part of the solution. With this as a starting point, Papastratos proceeded to design a holistic sustainable development strategy. With public, transparent and binding actions that do not just support the business operation of the company but constitute its business operation. And, above all, believing that the only convincing response to managing serious, global problems is a sustainability leap, now, starting with us and our choices.
Link to PMI's respective practices and commitments.
"Sustainable growth is at the core of PMI's transformation and is driving the development of strong ESG programs to mitigate risks associated with our value chain, while fostering innovation and growth to ensure our long-term success," said Emmanuel Babeau, Chief Financial Officer. Adding that: “We strongly believe that sustainability and corporate performance do not follow separate paths and I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG performance is integrated into our decision-making at all levels of our organization".
