PepsiCo

RATING

SECTOR

Food & Beverage

WEBSITE

CONTACT

700 Anderson Hill Road
Purchase, NY 10577
USA
T: (914) 253-2000
F: (914) 253-2070

STOCK EXCHANGE

LISTING

  • CDP 
  • Ethisphere’s World’s Most Ethical Companies 
  • Climate leadership awards (Organizational Leadership Award/ Supply Chain Leadership Award for climate action) 
  • Dow Jones sustainability index (2017) 
  • Barron’s 100 most sustainable companies (2018)

EMPLOYEES

260,000

CHIEF SUSTAINABILITY OFFICER

Simon Lowden

AWARDS

N/A

CONTENT SOURCE

FURTHER READING

Report created by Sagarika Deshmukh

PepsiCo

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

 

Company Activity

PepsiCo is one of the world’s leading food and beverage companies serving more than 200 countries and territories around the world. The global food and beverage leader has a product portfolio including 22 brands that generate more than $1 billion each in annual retail sales.

The company states, “our main businesses – Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola – make hundreds of enjoyable foods and beverages that are loved throughout the world. At PepsiCo, you get the best of both worlds: an entrepreneur’s mindset plus reach and resource”.

Their collaborative culture and worldwide presence generate a stream of new opportunities to define the future and propel one’s life work.

Company Sustainability Activity

According to PepsiCo, “there is an opportunity to change how the world produces, distributes, consumes and disposes of foods and beverages in order to tackle the shared challenges we face. We aim to use our scale, reach and expertise to help build a more sustainable food system; one that can meet human needs for nutrition and enjoyment, and continue to drive economic and social development, without exceeding the natural boundaries of the planet.”

Highlights

  • Nearly 80% of PepsiCo’s potatoes, whole corn, oats, and oranges are sustainably sourced.
  • 82% of the company’s palm oil was RSPO-certified sustainably sourced (Roundtable on Sustainable Palm Oil), progress toward their end-2020 target of 100%.
  • PepsiCo locally replenished over 1.6B liters of water in high water-risk areas in 2019.
  • PepsiCo has delivered safe water access to 44M+ people in underserved communities since 2006.

Targets

NEXT GENERATION AGRICULTURE 

  • Achieve 100% sustainably sourced potato, whole corn, oats, oranges, palm oil and sugar cane by 2020
  • Achieve sustainably sourced priority raw based on business needs by 2025 

POSITIVE WATER IMPACT

In high water-risk areas, by 2025:

    • Improve water-use efficiency by 15% in their agricultural supply chain (focused on corn and potatoes) by 25% (2015 baseline) 
    • Replenish 100% of the water consumed in manufacturing operations 
    • Adopt the Alliance for Water Stewardship standard as a vehicle for water advocacy 
    • Deliver safe water access to 25 million people by 2025 

CIRCULAR FUTURE FOR PACKAGING 

  • Design 100% of packaging to be recyclable, compostable or biodegradable by 2025 
  • Increase recycled content in their plastics packaging to 25% by 2025 
  • Reduce 35% of virgin plastic content across the beverage portfolio by  2025
  • Invest to increase recycling rates in key markets by 2025 

CLIMATE CHANGE MITIGATION 

  • Reduce absolute GHG emissions across PepsiCo’s value chain by 20% by 2030 (2015 baseline) 

PEOPLE & PROSPERITY 

Human Rights : 

  • Drive fair and safe working conditions throughout value chain by addressing most salient human rights issues (ie. Freedom of Association, Human Right to Water, Land Rights, Vulnerable Worker Groups, Working Hours and Wages, and Workplace Safety) 
  • Extend the principles of supplier Code of Conduct to all of franchisees and joint ventures by 2025 

Diversity :

  • Achieve gender parity by 2025 in management roles 
  • Sustain pay equity program 
  • Prosperity : Invest $100 million by 2025 to provide 12.5 million women with essential resources  for workforce readiness and in programs that empower women in the food systems and farming 

Progress

NEXT GENERATION AGRICULTURE 

  • Nearly 80% of their potatoes, whole corn, oats, and oranges are sustainably sourced
  • 86% of PepsiCo sugar cane was Bonsucro-certified sustainably sourced in 2019, progress toward their target of 100% by the end of 2025
  • 82% of palm oil was Roundtable on Sustainable Palm Oil (RSPO) – certified sustainably sourced in 2019, progress toward their target of 100% by the end of 2020
  • Work with over 40,000 farmers through their Sustainable Farming Program

POSITIVE WATER IMPACT

  • They locally replenished over 1.6 billion litres of water in high water-risk areas in 2019
  • Operational water-use efficiency improved by 9% in high water-risk areas since 2015
  • They delivered safe water access to 44 million+ people in underserved communities since 2006, exceeding their target of helping 25 million people by 2025
  • Set new target to deliver safe water access to 100 million people by 2030

CIRCULAR FUTURE FOR PACKAGING 

  • 88% of their packaging is recyclable, compostable, or biodegradable; making progress toward their goal of 100% by 2025
  • PepsiCo has set a new target to reduce 35% of virgin plastic content across their beverage portfolio by 2025
  • Striving to use 25% recycled content in their plastic packaging by 2025
  • Through growth of their SodaStream business, an estimated 67 billion single-use plastic bottles will be avoided through 2025
  • In 2020, SodaStream announced that it will switch all of its flavors from plastic to metal bottles. Production is expected to start in 2021, which will eliminate nearly another 200 million single-use plastic bottles over the next five years.

CLIMATE CHANGE MITIGATION 

  • Transitioning to 100% renewable electricity in US direct operations in 2020
  • Currently using 100% renewable electricity in 9 European countries
  • Sourced 65% of electricity needs from wind energy at PepsiCo Foods Mexico in 2019
  • Over the life of their Frito-Lay electric vehicle fleet, they will have driven 12 million all-electric miles
  • Reduced absolute GHG emissions by 6% across their value chain in 2019, progress toward their goal of 20% by 2030

Certificates

The company does not disclose this information.

UN Sustainable Development Goals

UN SDGs Compliance

SDG 2

  • PepsiCo sources crops from 60 countries and support more than 100,000 jobs in and throughout their agricultural supply chain. PepsiCo sustainable standards have a significant impact on agricultural communities around the world.

SDG 3

  • Advance respect for human rights by using PepsiCo’s capabilities and scale.

SDG 5

  • Increase the earning potential of women to drive economic growth and increase food security.
  • Promote a diverse and inclusive workplace. 

SDG 6

  • Drive water security to assure business continuity while positively contributing to communities. 

SDG 7

  • Across PepsiCo manufacturing facilities around the world, they bring together innovators and operations teams who work to use water, energy, and ingredients efficiently to create their foods and beverages. 

SDG 8

  • Advance environmental, social and economic benefits to communities around the world by supporting practices and technologies that promote improved farmer livelihoods and agricultural resiliency.  

SDG 12

  • Fundamentally change the way the world interacts with PepsiCo packaging to deliver their vision of a world where plastics never becomes waste. 

SDG 13

  • Curb climate change by reducing greenhouse gas (GHG) emissions across the value chain. 

SDG 15

  • PepsiCo products are distributed in over 200 countries and territories. They’re reducing GHG emissions with carbon-efficient delivery trucks and programs that improve fleet efficiency.

SDG 17 

  • Partnership is more important than ever before, and PepsiCo continues to work with their peers, governments, NGOs, and the communities where they operate, leveraging all the tools at their disposal to advance progress.

Evaluation

PepsiCo has set clear goals and target metrics to achieve within the next ten years. The company has been rewarded through the years by global ranking (Dow Jones Sustainability index in 2017, Barron’s most sustainable companies in 2018, etc.). However, the company lacks lack consistency in its efforts.

The company is also lacking transparency in their operations and certifications.

Due to the lack of certificates and legal efforts, PepsiCo is given a C rating.

Analyst Outlook: Neutral

The company has clear goals, but still produces plastic bottled products that are very harmful to the environment. This is why the outlook is neutral.

Key Points

  • PepsiCo is not transparent in reports of their sustainability activities, so it’s important to keep that in mind when reading their accomplishments. 
  • The company has been sued by an environmental group in California for falsely advertising their plastic packages as recyclable when in fact in most cases they’re not. This shows their lack of dedication to protecting the environment.
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