
Water is a key natural resource upon which Philip Morris USA depends. As part of our ongoing efforts to reduce the environmental impact of our business and products, we convened the PM USA Water Strategy Forum in December 2004 to focus on water usage in our operations, agriculture and procurement activities.

Water is a key natural resource upon which Philip Morris USA depends. Water is essential for the cultivation of tobacco, and is also a key resource in the manufacturing of other materials used by our business, such as paper products, aluminum and filters. PM USA also uses water in many tobacco processing and manufacturing steps to make our products. During these steps, it is possible to create discharges of naturally occurring nutrients like nitrogen and phosphorous. If these nutrients are released in bulk into certain bodies of water, they can affect the environment by causing algae to grow, which can then deprive sub-aquatic vegetation of sunlight and potentially reduce critical breeding grounds and food sources for some marine life.
Therefore, as part of our ongoing efforts to reduce the environmental impact of our business, we look for ways to reduce our water usage and nutrients in wastewater discharge from our operations.
To meet our goals, we’ve implemented improvement projects over time at our manufacturing centers and at our Richmond, Va.-based Park 500 plant where we use water directly from the James River, a tributary of the Chesapeake Bay. At Park 500, we own and operate a wastewater treatment plant and we have voluntarily reduced nitrogen discharges by 46 percent between 2001 and 2006 by evaluating and instituting operational changes. While this percentage decrease was a positive step forward, we continue to look for ways to improve. As part of our planning process, we wanted to better understand our stakeholders’ perspectives so we could implement a balanced water strategy.

In December 2004, we convened the PM USA Water Strategy Forum where we focused on water usage in our operations, agriculture and procurement activities. We invited representatives from:
- municipalities
- state and federal agencies
- regional and national non-governmental organizations
- suppliers
We also included representation from departments across PM USA and from Altria Group, our parent company.
A third-party facilitated the forum for PM USA and thirty participating stakeholders. The discussion covered issues including:
- PM USA’s current environmental programs
- water utilization at PM USA’s manufacturing and processing facilities
- nutrient discharges from various sources
- environmental impacts of tobacco farming
- impacts from marketing and direct materials
Our hope was that by listening to our stakeholders, we could understand and address their issues, better identify our water-related priorities and create a long-term water strategy for the company.

We went into the forum thinking that the environmental impact associated with our processing and manufacturing facilities would be the most pressing issue in the eyes of our stakeholders.
The forum, however, taught us that our stakeholders were more interested in the environmental and water practices of U.S. tobacco farmers. They told us they wanted to see us take a leadership role in educating tobacco farmers about sound agricultural practices.
We also learned that our stakeholders want to hear from us more regularly about our actions and initiatives.

Since the Water Strategy Forum in 2004, we’ve continued to collaborate with stakeholders to identify and implement actions to curb water usage and nutrient wastewater discharge from our manufacturing and processing facilities. This work is one of the reasons PM USA decided to pursue the development of a
natural treatment system or engineered wetlands to further reduce the level of nutrients discharged into the James River.
In light of what we learned at the forum, we’re also focusing on educating tobacco farmers about the impact their farming has on the environment and investing in research to look at innovative solutions. We are leveraging our
Good Agricultural Practices (GAP) program to educate tobacco farmers on how to manage their land and water use.
In addition, we have evolved our philanthropic strategy to include support for environmental organizations focused on similar environmental goals, and we are exploring ways to communicate regularly with our all stakeholders to keep them apprised of our progress.