While Philip Morris International (PMI) is widely known as a cigarette company, in 2016 we announced our bold, new purpose: to deliver a smoke-free future. By focusing our resources on developing, scientifically substantiating, and responsibly commercializing smoke-free products that are less harmful than smoking, we aim to completely replace cigarettes as soon as possible. Our company went a step further and in 2017, we formally restated our commitment to a smoke-free future in a letter to shareholders, followed by an official Statement of Purpose published as part of PMI’s 2020 Proxy Statement.
Our purpose drives our strategy and in turn, our strategy operationalizes our purpose. While we announced our Statement of Purpose because it was the right thing to do, we were also pleased with the attention it received as a powerful tool to ensure alignment, transparency, and accountability across vision, strategy, and reporting.
According to Responsible Investor, “This was the first time the board of directors of a U.S. publicly held company […] articulated a statement of corporate purpose, signed by every member of the board, in an SEC-filed document.” Forbes added, “To transform itself, a business must conduct a holistic review and overhaul its business model to include extensive changes in the firm’s operations and value chain and the way the firm interacts with society. This is captured in PMI’s ‘Statement of Purpose.’”
In the years since 2016, PMI made great strides to align our employees with our purpose and swiftly shift our organizational focus and resources to smoke-free alternatives. But as we continued to transform our business and organization, we realized:
- We cannot do this alone. The kind of systemic change PMI is driving can only be achieved through a collaborative, multistakeholder approach. PMI needs to continue earning the trust and active cooperation of a host of stakeholders, from supply chain partners to regulators and public health authorities.
- There is more. Although we began with the critical mission of phasing out cigarettes, this is not our sole or ultimate end goal. Researching and developing smoke-free alternatives that are scientifically substantiated to be better choices than cigarettes is only the first step. We aim to go a step further, moving from a value proposition centered on doing less harm toward one where we can seek to have a net positive impact on society.
In early 2022, we unveiled the refreshed Statement of Purpose, not only reaffirming our vision of delivering a smoke-free future, but also expanding it.
As our Statement explains, PMI is now actively working to evolve into a broader lifestyle, consumer wellness, and healthcare company, extending our value proposition and innovative capability to commercialize products that go beyond tobacco and nicotine. We will put science, technology, consumer-centricity, and sustainability at the heart of our future and build on our expertise and investment in aerosol chemistry and physics, device technology, clinical research, and best-in-class preclinical safety and inhalation models.
Our refreshed purpose rests on two key growth areas that are bold and unprecedented for PMI:
- Wellness products, where we are developing and looking to commercialize scientifically substantiated consumer health products with the aim to improve people’s lives, and
- Healthcare products, where we have already committed resources to a development pipeline of over-the-counter and prescription products.
The changes introduced to our 2022 Statement of Purpose were made to ensure it remains a clear, strong, fair, and current representation of our company’s vision, and maintains consistency and coherence with our strategy and reporting. Fueled by our ambition to create longer term positive change in society, it consists of a declaration that clearly harmonizes commercial success.
It also transparently specifies the key stakeholders that are most critical to our long-term value creation and sustainability. All of our stakeholders—consumers, regulators, employees, the public health community, supply chain, civil society, and shareholders—are fundamental to achieving our purpose. They are also affected by our transformation in different ways, so we will continue to engage and collaborate with them to speed our transformation while mitigating any negative consequences.
PMI remains committed to accelerating the end of smoking and laying solid foundations for a future business beyond tobacco and nicotine. Our ambition is that by 2025, at least USD 1 billion of our net revenues will derive from these adjacent avenues of growth, marking an initial milestone for a business with potential to grow much further over the longer term. In so doing, we hope to inspire the tobacco industry to follow our lead.
We hope our transparency will spark dialogue with those who can help accelerate the pace of change—to question, to challenge, and to engage with us as we work on making PMI better.