Case Study

A world without cigarettes? Actions speak louder than words

13 pages
December 2020
Reference: IMD-7-2218

By March 2020, Philip Morris International (PMI) had defined its purpose, “[to] create a smoke-free future and ultimately replace cigarettes with smoke-free products” and had validated PMI’s materiality matrix. PMI’s statement of purpose (SoP) was first published in the form of a letter from the board of directors to the company’s shareholders and was published in its proxy statement of March 2020. PMI’s sustainability leadership team (Huub Savelkouls, Chief Sustainability Officer and Jennifer Motles Svigilsky, Director of Social Impact & Sustainability) were working on the company’s first ever integrated report (IR) due for publication by June 2020. Connecting a sound sustainability materiality assessment, a concrete SoP and a detailed IR would, they thought, bring together actions and words, and convey exactly how the company’s strategy would create value for society and shareholders. They had the difficult task of setting realistic but ambitious targets, with a timeline to achieve them. They knew that targets – or a timeline – that were too ambitious and that the company could not deliver on could cause blowback for the team. At the same time, targets that were too conservative could lead to disengagement and exacerbate stakeholders’ mistrust and undo all their hard work since 2015. The case is about a company in one of the so-called sin industries that has committed to phase out cigarettes in favor of a smoke-free future based on reduced-risk products.

Learning Objective
  • Judge on a company’s SoP responsiveness to stakeholder’s demands and the impact that a company has on society.
  • Judge the strategic value of having a SoP signed by the board.
  • Judge the strategic value of identifying material sustainability topics based on their relevance for corporate strategy and their impact on society and the environment.
  • Judge the strategic value of metrics and targets in the IR to on sustainability progress.
  • Self-assess values and be aware of them when facing cognitive dissonance as well as take responsibility for values and their impact on decisions.
Reporting, Corporate Reporting​, Integrated Reporting, Purpose Statement, Investor, Business Model Transformation, Value Creation, Stakeholder Engagement, Responsible Procurement, Value-based Management
Philip Morris International, Consumer Goods, Tobacco
March-June 2020
Field Research
© 2020
Available Languages
Related material
Teaching note
Case clearing houses
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

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
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]


Research Information & Knowledge Hub for additional information on IMD publications

Discover our latest research
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics