Ref: IMD-7-2233

Case study

Reference: IMD-7-2233

Order this case study

PMI's Vision of a Smoke-free Future: Can a Tobacco Company be Sustainable

Vanina Farber

By Professor Vanina FarberVanina Farber and Head of Sustainability Natalia Olynec

This is an abridged version. Philip Morris International (PMI) CEO Andre Calantzopoulos announced in 2016 a radical pivot in the Marlboro cigarette manufacturer's strategy: the company would shift to 'smoke-free' products in more than 180 countries around the world. One of these products was IQOS, a new 'heat-not-burn' (HNB) device aimed at providing the world's over 1 billion 'adult smokers with better options.' The innovation of the products which, PMI claimed, were less harmful than cigarettes was welcomed by many investors and PMI. Calantzopoulos and PMI's Board of Directors believed that its sustainability strategy was critical to the company's long-term success. Nevertheless, convincing important stakeholders that a tobacco company could be part of the solution to rid the world of cigarettes by offering better alternatives was a different matter. The United Nations, World Health Organization (WHO), regulators, public health advocates, and some sustainable investors said that there was no safe level of use and no opportunity for effective engagement with tobacco companies. After a two-year wait, the US FDA issued an order authorizing the sale of IQOS in the US market of 40 million smokers. The FDA found that IQOS was 'appropriate for the protection of health.' PMI organized the 2020 Stakeholder Engagement Meeting in Lausanne, Switzerland to convene key stakeholders to engage with PMI's smoke-free business transformation.

Learning Objective

  1. Recognize the role of sustainability in mitigating negative impact and the potential of positive impact.
  2. Identify the implications of exclusion and engagement for sustainable investors.
  3. Identify stakeholders and recognize which enable a sustainability strategy.
  4. Analyze a company that must address negative health impacts of its own business.
  5. Examine the strategy of sustainable investors trying to achieve short-term financial success and implement a long-term sustainability vision.
Settings Global
Philip Morris International, Tobacco
Type Field Research
Copyright ©IMD 2020
Language English
Order this case study

Reference: IMD-7-2233

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre, UK Office

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Fax +44 (0)1234 751125
Email [email protected]

The Case Centre, US office

Babson College

Babson Park, Wellesley MA 02457, USA
Tel +1 781 239 5884
Fax +1 781 239 5885
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Copyright information

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.


Research Information & Knowledge Hub for additional information on IMD publications

Case study

Reference: IMD-7-2233

Order this case study
Looking for something specific?

Keep reading