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Trends Philip Morris Japan Stresses Diversity In Move Away From Cigarettes

TOKYO -- Diversity and inclusion are playing "a key role" in the transition of tobacco major Philip Morris away from selling cigarettes to smokeless products, Shea Lih Goh, president of the company's Japan arm, said in an interview with Nikkei Asia on Wednesday.

Despite being widely known as a cigarette company, Philip Morris International in 2016 announced a goal of bringing about a smoke-free future, or an end to traditional tobacco products. To this end, it has spent more than $7.2 billion in research and development and hired 400 scientists as well as medical and engineering experts globally.

"We are moving our resources, money and people from our cigarette business," Goh said, to what she referred to as "the reduced risk products." Goh, the first female president of Philip Morris Japan, is a non-smoker and encourages smokers to try to quit.

In 2015, Philip Morris Japan started to sell its Iqos "heat-not-burn" product and it has gained 26% of the Japanese tobacco market -- or 6 million users, 4.4 million of which have stopped smoking cigarettes.

Goh calls the change "a start" as 74% of smokers are still choosing combustible types of cigarettes. She stressed that the company wants to offer an alternative option for those who continue to smoke rather than quit entirely. "This will take time, but we are very optimistic because Japan is really making progress and is a great example for other countries around the world," she added.

As the company transforms its business, Goh believes "the different skills, perspectives and ideas that are brought by our diverse group of talents are keys."

Philip Morris Japan has a higher female representation compared to many other Japanese companies. As of 2020, female employees in leadership grew to 28% from 13% in 2013. The female hiring ratio also rose to 42% from 28% in 2016. And Goh says that while she may be the first female president of the company, she won't be the last.

Narrowing the salary gap between men and women has been one of the company's priorities to attract and retain talent. "A good example is that our salary gap is only 0.4%, but if you compared to [the] average in Japan, there's around 24%," Goh said, adding, "we are very committed to having the diversity and inclusion."

The implementation of equal pay for equal work regardless of sex at Philip Morris Japan has been verified since 2016 by the Equal-salary Foundation, a Swiss-based nonprofit organization.

"We need to tap into the best talents in the market" regardless of gender and nationality, Goh said. "When you want to unlock the power of diversity, we really must have an inclusive environment. It is kind of two things that go hand in hand," she added.

"We are the first tobacco company to tell the whole world that we want to quit," Goh said. Despite the challenge, she is determined to lead the company toward that goal. "This clear vision is really helping us," she said, as it brings a common understanding among the entire company and "our actions all match."

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