The company behind Marlboro cigarettes wants you — and more importantly, investors — to know they’re gonna be better cowboys.
Philip Morris International CEO Jacek Olczak gave an interview to the Financial Times on Tuesday, in which he said PMI is on track to becoming an ESG stock as the company retreats from cigarettes and shifts toward vaping. For anyone who’s had a popcorn-scented vapor smack them in the face during a stroll, that might not position PMI as a force for good.
Are We The Baddies?
If you’re asking yourself why one of the world’s biggest tobacco companies is bothering to play the ESG card, the FT has your answer. Some major investment entities have shed their PMI stock because of their own ESG policies, so if the company could re-classify itself, it might be able to get back in their good graces and, by extension, their portfolios.
Olczak told the FT PMI has been tentatively talking to some of the asset managers who cut it loose recently, and those talks gave him hope. “I’m not saying that they are building a position in Philip Morris […] but the asset managers will not spend the time on talking with you if they don’t have in mind that one day is coming that they should reconsider the exclusion,” he said.
Olczak argued the company’s renewed focus on reduced-risk products like vapes means it’s in with a chance. Maybe. While vaping is not as bad for you as smoking, it’s not harmless and regulators are starting to close in on it:
- The UK government on Tuesday announced a crackdown on underage vaping. The new crackdown will restrict marketing aimed at children as well as ban free samples for under-18s, which to be honest we’re surprised was a thing in the first place.
- Earlier this month Australia announced a ban on recreational vaping, trying to limit vaping as much as possible so it’s only used by people trying to quit smoking. The crackdown includes stopping imports of non-prescription products, outlawing funky flavors, and banning bright packaging.
Not Pulling Punches: Australia’s Health Minister Mark Butler smoked out tobacco companies when the ban was announced. “Just like they did with smoking […] ‘Big Tobacco’ has taken another addictive product, wrapped it in shiny packaging and added sweet flavors to create a new generation of nicotine addicts.”