The Smoke-Free Index™ will provide quantifiable evidence over time of what steps the largest tobacco companies are taking toward achieving a smoke-free world and any actions they take to undermine that progress. On March 18, 2019, the Foundation for a Smoke-Free World announced consultancy agreements with global market research company Euromonitor International and leading consulting firm and think tank SustainAbility for the creation of the Smoke-Free Index™, which will first be published in June 2020. The Smoke-Free Index™ will annually evaluate 15 of the largest tobacco companies in the world. The Smoke-Free Index™ is the first action of the Foundation’s Industry Transformation initiative, a core pillar of its overall mission to achieve a smoke-free world within this generation.
Technological disruption is well underway in the tobacco industry and nicotine ecosystem. The Foundation believes now is the right time for industry innovation, as unprecedented and innovative technologies are reducing the health risks associated with nicotine delivery compared with those of emissions found only in combustible tobacco. Using an objective methodology, the Smoke-Free Index™ endeavors to measure the nature of the tobacco companies’ allocation of capital, research and development, marketing, product sales, regional variations, production decisions, violations, and more. The objective is to incentivize scientific research and development for the advancement of product innovations to benefit public health and potentially millions of adult smokers, particularly in developing countries. The Index will also review 35 countries to determine how they are or are not contributing to a smoke-free world through indicators including tax structure on combustible cigarettes, regulatory policy on reduced-risk products, and other metrics.
We believe investors have significant influence on corporate management decision-making. The Index will provide investors, among all stakeholders, with quantifiable evidence of how companies are addressing industry transformation, on both an absolute and a relative basis, as an additional tool with which to wield influence and promote change. By creating a direct relationship between a company’s transformation and shareholder value, while quantifying transformation through clear and transparent metrics, we envision using a market-driven approach to incentivize sustainable change toward a smoke-free world and to meet consumer demand for reduced-harm nicotine delivery products worldwide.
In September 2018, the Foundation issued a Request for Proposals (RFP) to develop and implement the means to critically evaluate industry progress, and assess actions taken that undermine progress toward a smoke-free world, in the form of the Smoke-Free Index™. In parallel, the Foundation laid the groundwork for its work in this area. The Global Trends in Nicotine report identifies the major players in nicotine delivery, outlines their product organization and geographic focus, and quantifies their output primarily on a relative basis. In addition, two “case study” Indexes were researched and evaluated – Access to Nutrition and Access to Medicine.
With regard to the RFP process, research and consultancy organizations were contacted. Expressions of interest were received in October 2018. The Foundation extended invitations to multiple organizations to submit full RFP proposals by early December 2018. The RFP document defined process design, application process, evaluation criteria, and submission instructions, in addition to providing program background and rationale. After careful consideration, two award selections were made in January 2019 and the program was initiated in February 2019. Euromonitor International was awarded lead responsibilities for Process Design, Index Research & Analysis, and Reporting. SustainAbility was awarded lead responsibilities for Stakeholder Engagement & Seminars, Program Oversight, and Post-mortem Assessment. Given that Euromonitor International and SustainAbility are among the most respected independent research firms in the world, we believe these selections offer the Foundation the opportunity to ensure that the Smoke-Free Index™ is received by all stakeholders as a credible, valuable, and material change agent toward ending smoking in this generation.
Euromonitor International and SustainAbility will collaborate on developing the Index through a work process that includes research, global stakeholder engagement and listening seminars, index development, data analysis, and independent expert oversight. Their progress will be communicated in an open and transparent manner at critical milestones leading up to the release of the initial Smoke-Free Index™ in June 2020, with periodic and annual updates thereafter.