ESG INVESTMENTS AND THE GREENWASHING ARGUMENT IN THE TOBACCO SECTOR: What they are and how they are related. The case of Philip Morris International.

Environmental, Social, and Governance (ESG) investments have gained substantial relevance in recent years, reflecting a global shift towards more sustainable and responsible investing. ESG criteria and scores serve as a lens through which investors evaluate a company's ethical and sustainable practices. However, the tobacco industry presents a unique challenge due to its inherently harmful products and the ensuing clash with ESG principles. This thesis aims to explore the dynamics of ESG investments within the tobacco sector; we will talk about the new regulation provided by the European Union and the financial instruments that can be used for green purposes, paying particular attention to the contentious issue of greenwashing. Greenwashing in the tobacco industry involves misleading attempts to present environmentally or socially responsible initiatives while overlooking the fundamental harm caused by the products. The study delves into the motivations behind ESG investments in the tobacco sector, examining in particular one of the most important and famous company: Philip Morris International (PMI). We will analyze how tobacco companies are working to align with ESG frameworks, despite the industry's inherently adverse impact on health and society. An example is IQOS, the new Heat-not-Burnt product offered by PMI, of which we will try to understand the impact on the financial and image returns and on the ESG scores of the firm. By focusing on the greenwashing argument, this research aims to encourage informed decision-making within the realm of ESG investments, promoting greater transparency and authenticity in sustainability efforts across all industries, although it is clear that more time will be needed to reach this goal in controversial sectors such as the tobacco one.