Stakeholder input is essential to the development of the Tobacco Transformation Index. To meet this need, a series of listening seminars and consultations has been held over the past several months with key multi-disciplinary stakeholder groups in multiple countries. The purpose of these meetings has been to explore and strengthen the Index’s strategy, process, design, and evaluation criteria. It is also to identify and prioritize specific topics the Index should address and inform the measures necessary to ensure the research process and outputs of the Index are objective, credible, and effective. This document summarizes the main outcomes of the meetings.
Since May 2019, the Tobacco Transformation Index consultation sessions have taken place in far-ranging cities, from Cape Town, South Africa and London, England, to Warsaw, Poland and São Paulo, Brazil. The meetings have brought together representatives from academia, the investor community, consulting, nongovernmental organizations, and tobacco and agriculture associations. The attendees included individuals with experience in health and tobacco control, sustainability indices, human rights, corporate governance, environmental, social, and governance (ESG) investment, agricultural science, smallholder agriculture, and harm reduction. Several participants also had personal experience with nicotine addiction, tobacco use, and harm reduction products.
The full-day sessions were moderated by SustainAbility under the system of Chatham House Rule (in which the identity and affiliation of participants is held in strictest confidence). Details on the Tobacco Transformation Index project were provided during presentations delivered by representatives from SustainAbility, Euromonitor International, and the Foundation for a Smoke-Free World.
The dialogues to date have brought together a broad range of perspectives. Here are some of the common key discussion points and recommendations suggested about the Index process and content:
- Define the role and purpose of the Index precisely. Participants acknowledged the different roles the Index could play. They recommended narrowing the purpose of the Index and focusing on clear objectives to ensure its success.
- Strike a balance between simplicity and sophistication, inclusiveness and timeliness. Some participants suggested the Index initially should be more simplified, building to greater levels of complexity and ambition over time.
- Establish a solid and relevant governance structure. Participants emphasized the need to establish a clear decision-making process, as well as a governing body. They recommended implementing a formal independent structure overseeing the Index.
- Be transparent about process. Participants stressed the importance of continuous dialogue with interested parties throughout the development process, including the companies that will be assessed. Many recommended engaging with the companies early in the process.
- Fine-tune the company indicators and weightings appropriately for industry and investment audiences. Participants cautioned it is essential to build the Index with a strong understanding of what will motivate specific industry actors to change – from tobacco company management to investors and the investment community – and in a manner that will speak to their financial goals.
- Manage the intricacies of the country-context methodology and clarify the link between the company and country indicators. Participants highlighted both the importance and complexity of using the correct methodology, especially for understanding differences in tobacco company activities in low- and middle-income countries versus high-income countries, and how different cultural and policy environments affect the potential for the industry to change.
Some of the specific commentary shared during these discussions included the following:
- “The positioning of industry is key to success of the Index. There is a danger that the Index might be discredited by tobacco companies who have a history of success at discrediting initiatives that threaten their business model.”
- “I see a lot of problems, but they can all be overcome. It is not impossible. If you don’t do this now, there won’t be another opportunity.”
- “The stated aim of this initiative is to deliver a smoke-free world within a generation. If we’re serious about this, then the companies will need to transform their business models over a reasonably short time frame. It’s important that the Index authentically captures this target.”
- “There are two categories that should have the highest weight because at the end of the day this is what matters the most: revenue by product and the capital allocation. From an investor perspective, that’s the way we would mostly look at it.”
- “It cannot simply be about creating a smoke-free world; it needs to be about creating a ‘responsible’ smoke-free world.”
- “From an ESG investment perspective, the tobacco industry is ripe for change.”
- “The development of the Index is coming at the right time, as the industry is facing some significant challenges.”
The global stakeholder dialogue sessions will continue through October 2019. The collective findings of these meetings will have a direct bearing on the final design, process, and evaluation criteria for the Tobacco Transformation Index.
If you have questions about the dialogues or wish to share feedback directly with the index development team, please contact email@example.com.