For Jennifer Motles, Chief Sustainability Officer at Philip Morris International (PMI), leading sustainability in a company long defined by one of the world’s most controversial products requires more than ambition. It requires navigating legacy, credibility gaps, and public scrutiny with honesty, empathy, discipline, and transparency.
PMI is undertaking a bold shift: from a business historically centered on cigarettes to one rapidly progressing towards deriving the majority of its net revenue from smoke-free products and ultimately seeking to make cigarettes obsolete. It’s a move shaped not only by technology and innovation, but by the growing pressure from regulators, investors, and health-conscious consumers demanding more accountability from industries with high social costs. The goal is to develop a business model and product proposition that addresses the company’s most material issue – the health impact of its products – and reduces this effect by offering a better option for consumers and society.
PMI’s task is clear: transform not just what it makes, but its entire value chain, as well as how it engages with its most relevant stakeholders – internally, by its people, and externally, by those who are fundamental in enabling and determining the pace of systemic change.
We are allocating resources away from our legacy business,” Motles says. “And we are advancing towards a future in which we no longer base our success on selling cigarettes.”
PMI’s transition is unlike most corporate transformations, not only because of what it’s leaving behind but because of how little room it has for missteps. While the company continues to sell combustible tobacco products in many markets, it is working to replace them with nicotine-containing products that do not require combustion and thus represent a less harmful alternative for smokers who would not otherwise quit.
This strategy generates criticism from multiple fronts: public health advocates question the company’s motives, regulators scrutinize its science, and many consumers remain skeptical of the company’s commitment. The stakes are high: any inconsistency could undermine years of progress.
Internally, the challenge is equally profound. PMI had to motivate employees who had built careers on its historical core business to now lead the shift away from it. That required cultural rewiring, a new sense of purpose, and trust that the organization rewards – not resists – this transformation.
For Motles, this is the heart of the challenge: can PMI achieve systemic change while still operating in the very system it seeks to leave behind? Success depends not only on PMI, but also on whether other stakeholders create the conditions to enable the transition.
“Building trust with our stakeholders is essential,” she says. “We are asking them to measure us by what we’re doing now – and what we commit to do next.”
“PMI has also launched platforms like pmiscience.com, a dedicated website where its science and data are available to the public.”
Transformation at PMI doesn’t begin with messaging; it begins with measurable change. As Chief Sustainability Officer, Motles understands that rebuilding trust means actions speak louder than words, so leading with substance, not slogans, is key.
At the heart of PMI’s strategy is a bold sense of purpose: to advance tobacco harm reduction and maximize the benefits that smoke-free products can bring to public health. These smoke-free products are not risk-free and contain nicotine, which is addictive. However, scientific evidence shows they are a better option for adults than continuing to smoke. Between 2008 and 2024, the company had already invested more than $14.0bn in the research, development, and rollout of smoke-free products, including IQOS, which heats tobacco instead of burning it. As of 2024, PMI smoke-free products are available in 95 markets, and the company aspires to generate over two-thirds of its total net revenue from smoke-free alternatives by 2030.
But for PMI, product innovation is only part of the solution. What matters just as much is accountability: making transformation transparent, measurable, and verifiable. That’s why PMI has developed a set of business transformation metrics that track the company’s progress against its smoke-free vision. The metrics are assured by third parties, with clear, published methodologies; a move that signals openness to scrutiny, even when progress is not linear.
“Transformation and sustainability for us are the same thing; they aren’t a separate team or department, it’s how we operate now,” Motles says. PMI has embedded sustainability into core business functions: from supply chain and product development to investor relations and marketing. The company also worked to align incentive structures, refining its Sustainability Index and ensuring that sustainability performance is part of how leaders are evaluated and rewarded. This is not about parallel reporting, but about integrating transformation into decision-making.
Internally, PMI is reshaping its culture to match its ambition. Through dedicated training programs and cross-functional initiatives, employees across levels are empowered to challenge conventional thinking and drive for impact. Forums and internal platforms enable teams to break down silos, share best practices and innovations – from product design to responsible marketing – while leadership development programs now reflect the company’s broader sustainability goals.
Externally, PMI seeks to engage all its stakeholders as it understands that the only way to achieve systemic change is through multistakeholder dialogue and action, not through working in silos. PMI engages actively with regulators, public health experts, consumers, civil society – including its most severe critics – to advocate for science-based frameworks around tobacco harm reduction. It continues to push for risk-proportionate regulatory frameworks that facilitate the transition of adult smokers to smoke-free products.
PMI has also launched platforms like pmiscience.com, a dedicated website where its science and data are available to the public. It gives researchers and the public access to an overview of the company’s scientific approach, methodologies, and research findings from toxicology, clinical, and behavioral studies. This openness is essential to shifting perception – not just of the company, but of what a smoke-free future can realistically look like.
Historically, many human studies conflate nicotine’s effects with those of cigarette smoke, but public health experts widely accept that nicotine itself is not the primary cause of smoking-related health harms, though it is addictive. PMI aims to further scientific understanding of nicotine’s health effects in isolation, separate from the harms of smoking, to contribute to more accurate health information and harm reduction strategies. “Some smoke-free products have been on the market for over 10 years,” Motles says. “There is an increasing need to understand the health effects of nicotine detached from smoking.”
PMI is building a different future through innovation, performance, and transparency. Making cigarettes obsolete is not just about switching products but transforming the entire value chain and the way to engage with society – achieving a complete paradigm shift. The company’s ability to lead this industry-wide transformation rests on consistently demonstrating real impact and change, not merely on innovation speed.
PMI’s transformation offers lessons on what it takes to succeed under high scrutiny and skepticism, highlighting the strategic nature of sustainability in advancing an integrated corporate strategy for the short, medium, and long term:
The external landscape is changing fast.
As PMI moves deeper into its shift toward a smoke-free future – with scale, consistency, and resilience under scrutiny – its sustained commitment, rather than mere announcements, will be the true measure of transformation.
The external landscape is changing fast. New competitors are entering the reduced-risk space, regulatory frameworks remain fragmented, and public trust continues to be cautious. In response, PMI is strengthening its investment in product science and transparency, refining its Business Transformation metrics, and better integrating financial and non-financial performance to more accurately explain value creation and meet growing expectations for accountability.
But transformation isn’t driven by external reporting alone. Internally, PMI is focused on reinforcing the systems that embed sustainability into daily decision-making. Leadership development programs are being redesigned to support long-term performance goals. Functional teams – from R&D to operations, and marketing – integrate sustainability considerations into their strategy. The aim is to shift from departmental responsibility to enterprise-wide ownership. To achieve this, the company has integrated sustainability into the core of its operations, overcoming internal silos.
At the same time, PMI is expanding the scope of its ambition. While smoke-free products remain central, the company is exploring adjacent areas in wellness and healthcare, backed by continued R&D and strategic partnerships. These efforts reflect a broader evolution: from a company deeply rooted in the production of cigarettes to one seeking to participate credibly in the future of public health.
“We don’t expect immediate trust,” Motles says. “We expect to earn it over time, through consistent performance, and documented transparency.”
What comes next is less about reinvention than about reinforcement: proving that transformation is not a campaign or a phase, but a new standard for how the business operates – under full visibility and on a timeline measured in years, not quarters.
Editorial disclaimer: This case is provided solely for educational purposes. It does not constitute an endorsement, a source of primary data, or an illustration of effective management practice. It is based on conversations with several executives from Philip Morris International (PMI), as well as publicly available information and independent research. IMD developed this case independently, without financial support, compensation, economic incentive, or editorial control from PMI.
This case series was developed as part of a research project supported by Capgemini Invent.
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