This is an an extract from a speech that will be delivered by Dr Derek Yach at The Global Tobacco & Nicotine Forum which took place in London on Thursday.
The past no longer predicts the future. What was unthinkable is becoming reality through the application of new and truly disruptive technologies. No sector of society will escape this reality.
Dirty and unhealthy legacy industries are transforming their activities and products toward cleaner ones. Consumers increasingly demand less pollutive, healthier, and more sustainable products. To cite a few examples of industries undergoing transformation, coal companies are shifting to renewable energy, waste management companies are shifting from dumping to recycling and reusing, automobile manufacturers are developing electric and hybrid cars and shifting away from reliance on the combustion engine, and food companies are cutting ingredients that threaten health. Progress will not be linear, but the trends point to increasingly aligned pressure for profitability and sustainability.
What do companies undergoing transformation have in common? They all use technological innovations to transform their core businesses. They are all responding to consumer demand for better, healthier, and more sustainable products. Change is often supported by investors and asset managers. Smarter regulations allow governments to steer sectors towards outcomes aligned with the Sustainable Development Goals.
Efforts to tackle climate change provide a powerful example of this. Governments’ voices, treaties, and protocols visible in the Paris Agreement that was negotiated at the Conference of the Parties of the United Nations Framework Convention on Climate Change and adopted by consensus on December 12, 2015, are complemented by a wide range of industry-led voluntary initiatives to harness market forces for good. The Task Force on Climate-related Financial Disclosures, chaired by Michael Bloomberg, included input from across the breadth of the financial services sector and called for transparent reporting on the true costs and mitigating opportunities of many sectors’ contributions to climate. This initiative joins a growing segment of the investor community applying Environmental, Social, and Governance (ESG) criteria to the investment process.
Some companies are shifting their portfolios to more sustainable options, even while they continue to sell the most pollutive and, in some cases, unhealthy products. They need the flow of profits from their legacy products to cover the costs of the transformation toward these more sustainable options. That said, when dominant, dirty, and unhealthy legacy industries effectively change, the resultant social, health, and environmental impact is orders of magnitude greater than the incremental contributions from start-ups who are already there.
Yet, these large polluters are often the target of divestment due to their historical and continued negative impact – they are shunned, dismissed, or barred from engagement by groups that are oblivious to how sectors transform.
What does this have to do with the tobacco industry?
Tobacco companies represent the archetypical unhealthy industry, producing cigarettes and other conventional tobacco products that are consumed by about 1.3 billion people today.
The large publicly traded tobacco companies, state monopolies, and smaller manufacturers around the world have combined revenues of nearly USD 800 billion per year. They deliver almost USD 400 billion in tax revenue to governments. They sell more than five trillion cigarettes annually. This figure – five trillion cigarettes – excludes the illicit cigarette trade and locally manufactured combustible tobacco products. Tens of millions of farmers and millions of factory workers, distributors, and retailers are involved in the supply chain. It’s a massive industry.
This comes at an unacceptably high cost to the health of populations across the globe. More than 7 million people die each year from smoking and from the use of other tobacco products. That makes tobacco products the leading cause of preventable deaths worldwide. Many more suffer from the consequences of smoking-related diseases. The end is nowhere in sight. The best projections of long- term trends suggest that even as health policies are being increasingly implemented, at least a billion people will continue smoking for decades. And a billion people will die prematurely this century from tobacco, if the status quo is maintained.
These exceptional risks to health led governments to develop the World Health Organisation Framework Convention on Tobacco Control (WHO FCTC). It is the only time WHO has used its treaty-making authority. The FCTC has been adopted by 181 countries. As with climate change treaties, the FCTC provides a government-led roadmap for action. Unlike the UN climate change processes, the FCTC has systematically excluded organisations responsible for creating tobacco-related risks and potentially holding the keys to mitigation.
We have a real opportunity and obligation to do more to reduce the long-term risks of tobacco use.
Why do we believe this is particularly important now, and why do we believe it is feasible now?
Some of the requirements for transformation of the tobacco sector are already in place: disruptive technologies, consumer demand, investor interest, and a few government leaders’ voices. But many challenges remain.
Smokers with knowledge of the benefits of harm reduction are responding positively and in growing numbers to products that provide them with the pleasure and reward they seek from nicotine, without exposing them to the risks associated with combustible cigarettes. Their voices, suppressed for decades in debates about how to best end smoking, are becoming organised as they demand their right for policies and research to be developed and implemented, and demand their needs be considered. This is how progress occurred in getting better treatments for patients living with AIDS – by the patients themselves – and this is how progress is underway in other areas of chronic disease.
In some countries, reduced-harm products are displacing combustible cigarettes at a rate never experienced in tobacco control. The numbers are impressive. Over 10 million people use e-cigarettes in the US with about half using them as their sole source of nicotine. Millions more use snus and e- cigarettes across Europe. In Japan, according to company reports, the introduction of heat-not-burn products is associated with a 24% decrease in total domestic cigarette sales from January to July of this year (2018) compared to the same period in 2016. No other mature market has seen one-quarter of its cigarette market disappear in just two years. Similar data are now emerging from Korea.
These trends are especially remarkable given the often-hostile media and frequently confused messages from public health organisations about the potential health benefits of these alternative nicotine-delivery products.
Failure to correct these misconceptions will lead smokers to keep smoking combustibles and die prematurely from smoking-related diseases. Misconceptions are emboldening some governments to ban harm-reduction products, leading to dire consequences for smokers who are seeking to switch to these products. Misconceptions could also slow down innovation led by the private sector that could develop better products that are also priced to reach the low and middle-income countries where 80% of the world’s 1.1-billion smokers live.
WHO has perhaps “unwittingly” added to the confusion by failing to provide governments with the type of evidence and guidance we see emanating from public health authorities in the US and in the UK. In both countries, open dialogue between all stakeholders, including industry players, is actively supported and allows for new evidence and science to be part of the policy process driven by governments.
It is time to address the needs of smokers by stepping up harm reduction and smoking cessation. This will be done by engaging with all those who are committed to end the use of combustibles. That is the spirit of FDA’s Scott Gottlieb and Mitch Zellers’ latest comments on tobacco regulation guidance, in which they explicitly acknowledge the need for standards to “mutually benefit industry and the FDA”.
Senior global health leaders have started to acknowledge the importance of the tobacco industry transformation and what it means for how we engage with the industry to build solutions. In the opening session of the preparatory meeting for the Third High Level Meeting of the General Assembly on Non-communicable Diseases (NCDs) (held in New York on 5 July, 2018), Sania Nishtar, a Co-Chair of the WHO Ad Hoc Commission on NCDs, addressed many technological innovations shaping the future of healthcare and added that “the private sector is aligning incentives to announce the end of cigarettes”. She went on to say that “attacking lifestyle choices, corporate interests, vilifying others, or creating an over-simplistic enemy narrative is not going to help”. I fully agree.
This forum includes several major tobacco manufacturers. Let me challenge you to do more across the tobacco industry. Some of you have explicitly committed to ending the sale of combustible cigarettes or, at least, to accelerate access to a portfolio of reduced-harm products. However, each company has made its pledges individually. We have yet to hear a consolidated voice from the tobacco industry worldwide committing to end the sale of combustibles. Tobacco companies’ leverage in the market to assert greater influence on each other to act more decisively to end the use of combustible cigarettes globally is long overdue – especially in developing countries. DM
Dr Derek Yach, South African and global health expert and anti-smoking advocate for more than 30 years, is the president of the Foundation for a Smoke-Free World. He is a former World Health Organisation (WHO) cabinet director and executive director for non-communicable diseases and mental health where he was deeply involved with the development of the world’s treaty on tobacco control, the Framework Convention on Tobacco Control. He is a strong proponent of harm-reduction policies, and is advancing his career’s work at the Foundation for a Smoke-Free World