Big Tobacco is reportedly positioning itself as a socially conscious investment.

The CEO of Philip Morris International told the Financial Times he believes investors who have dropped the tobacco company's stock in recent years will eventually come back in light of its pivot toward vapor-based nicotine products, which have been marketed as less harmful than cigarettes — but regulators have been cracking down on vapes, particularly as evidence mounts that they can be harmful to teens.

About a third of PMI's revenue comes from vaping sales currently, and it aims to become a majority smoke-free business over the next two years.

When asked by the newspaper whether he believed that Philip Morris could eventually be classified as an ESG stock — a loosely defined category of companies rated on environmental, social and governance factors — Jacek Olczak responded: "I think so."

Olczak told the FT that he'd seen tentative engagement from some funds that have shunned tobacco stocks in recent years, though he declined to identify them.

"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 [policy]," he told the FT in an interview.

A spokesperson for the company didn't immediately respond to a request for comment.

Philip Morris International, headquartered in Switzerland, is the multinational firm that sells Marlboro brand cigarettes in non-US markets. It was spun off in 2008 from Altria Group, which controls Philip Morris USA.

ESG has become buzzy shorthand on Wall Street for an investing strategy that typically weeds out companies whose products or practices are detrimental to the environment or social harmony — think gun manufacturers, oil drillers and cigarette makers. But there is no firm, widely accepted criteria around ESG investing, leaving it in the hands of fund managers to make those distinctions.

It remains a wildly popular strategy, however, and inflows remained strong in 2022 even as the "dirty" energy sector outperformed last year. That's especially true in Europe, where ESG accounted for 65% of all flows into ETFs in 2022, according to Morningstar data.

Olczak told the FT that 10% of his long-term compensation was now linked to ESG targets, though he "railed against the ESG conventions which had frozen PMI out in recent years," the paper reported.

Olczak touted PMI's ESG bona fides on transparency, though he also acknowledged that the use of child labor in tobacco supply chains harmed his company's ESG rating.