The Smoke-Free Index® will provide quantifiable evidence of how companies are supporting or impeding tobacco industry transformation. 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. The Smoke-Free Index® will objectively 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.
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. 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.
The intention of the Smoke-Free Index® is to evaluate approximately 15 of the largest nicotine delivery companies in the world, along with their actions in about 35 countries, which account for approximately 90% of all legitimate tobacco production and consumption 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 2018 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 evaluation, two award selections were made in January 2019 and the program was initiated in February 2019. Grantee #1 was awarded lead responsibilities for Stakeholder Engagement & Seminars, Program Oversight, and Post-mortem Assessment. Grantee #2 was awarded lead responsibilities for Process Design, Index Research & Analysis, and Reporting.
In summary, The Foundation for a Smoke-Free World is beginning the execution phase of its Industry Transformation strategy. We expect to release the first Smoke-Free Index® by June 2020, with periodic and annual updates thereafter. We believe the awarded grantees 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.
Additional information will be made available in the coming weeks and months.