At OneStop ESG, we continue our Thought Leadership Series by spotlighting leaders shaping the future of sustainable business. In this edition, we feature Jennifer Motles, Chief Sustainability Officer of Philip Morris International, who has played a central role in steering the company’s shift toward a smoke-free future. Here, she shares her perspective on driving transformation at scale and building a business positioned for long-term impact.

PMI’s transformation toward a smoke-free future is often cited as one of the most ambitious in corporate sustainability. What does this transition mean in practical terms for your strategy and operations?

PMI’s transformation is fundamentally about replacing cigarettes with smoke-free alternatives as quickly as possible. In practical terms, this means a complete overhaul of our product portfolio, operations, and business model.

Sustainability stands at the core of PMI’s transformation. It spurs innovation, better positions the company for long-term success, and helps to address specific challenges stemming from our transition. Simultaneously managing the impacts of two value chains—the one we are moving away from (our cigarette portfolio) and the one we are moving toward (our smoke-free portfolio)—while also managing the impacts of the transition itself makes our strategy even more complex. While a transformation of this magnitude and complexity cannot be achieved overnight, we are committed to making it happen as quickly as possible.

The smoke-free business accounted for 41% of PMI’s first-nine months 2025 total net revenues. Since 2008, PMI has invested over $14 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes.

How does PMI ensure transparency and accountability in tracking progress toward its sustainability goals?

Our comprehensive reporting approach transforms sustainability data into meaningful insights that demonstrate value creation across multiple capitals. Through our annual Integrated Report and supplementary disclosures—including detailed performance metrics, case studies, and topic-specific analyses available online—we provide stakeholders with a clear view of how sustainability drives business success. This transparency enables informed decision-making and strengthens stakeholder trust.

What are the main challenges in driving change across such a large, global value chain from suppliers to consumers?

Driving change across a large, global value chain—from suppliers to consumers—presents significant challenges due to its complexity, diversity, and the need for deep collaboration. PMI’s value chain spans multiple geographies and involves a wide range of stakeholders, each with unique regulatory, cultural, and operational contexts. Key obstacles include managing physical and transition risks from climate change, addressing capability gaps among suppliers, ensuring high-quality data and traceability (especially for indirect emissions), and balancing trade-offs between product innovation and environmental impact. Additionally, regulatory uncertainty, volatile markets, and the need to align and engage stakeholders across the chain further complicate transformation efforts.

To address these challenges, PMI integrates sustainability and risk management into its core strategy, leveraging robust supplier engagement programs, investments in nature-based solutions, and continuous capability building for employees and partners. The company emphasizes transparent stakeholder engagement, localized approaches, and adaptive strategies to manage both controllable and uncontrollable factors. By embedding climate and sustainability considerations into governance, financial planning, and product design, PMI aims to build resilience, drive measurable progress, and ensure that transformation efforts deliver value for both the business and society.

How as a company do you set sustainability priorities?

Our commitment to sustainability is guided by a thorough sustainability materiality assessment (SMA), which we view as a vital tool for setting strategic priorities.

Since 2016, we have regularly carried out this rigorous process at PMI to ensure our decisions both foster business value and reflect the expectations of our stakeholders. The early adoption of “double materiality” in 2021 further strengthened our perspective, allowing us to begin assessing sustainability matters from both impact and financial viewpoints.

As part of this process, PMI actively engages with multiple stakeholders on a continuous basis to understand their expectations and address their concerns, fostering a shared understanding of issues and identifying solutions beneficial to both stakeholders and our business. Key stakeholder groups include Consumers, Employees, Supply Chain, Regulators, the Finance Community (including shareholders), the Public Health Community, and Civil Society.

With each iteration of our SMA, our strategy has become more focused and resilient. The 2024 assessment marks another step forward, as we have incorporated evolving regulatory standards—particularly the CSRD—and deepened our collaboration with the ERM function. This integration ensures that we systematically consider the financial aspects of sustainability topics, reinforcing the clarity and strength of our long-term approach.

How is PMI approaching Business Resilience?

A business that operates sustainably is one that actively considers how the world is changing, prepares for emerging challenges, anticipates future opportunities, and builds resilience into its operations. This is the approach we follow, which ensures not only our success in the short term, but more importantly, our ability to thrive and create lasting value over the long term. Our commitment to sustainability is not just about being at the forefront of environmental stewardship—it is about building a business model that is robust and positioned for enduring success in an evolving global landscape. In a rapidly changing economy, this strategic approach positions us well not just to adapt, but to thrive.

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