PepsiCo reports significant headway in sustainability targets despite ‘year of challenges’

By Gill Hyslop contact

- Last updated on GMT

PepsiCo hopes to combine all its ESG reporting – including sustainability, diversity & inclusion and human rights – in one report next year to further increase transparency. Pic: PepsiCo
PepsiCo hopes to combine all its ESG reporting – including sustainability, diversity & inclusion and human rights – in one report next year to further increase transparency. Pic: PepsiCo

Related tags: Pepsico, Sustainability, coronavirus, diversity, inclusion, Greenhouse gas, Climate change, HFSS, plant-based, reusable packaging

PepsiCo has released its 2020 Sustainability Report, which outlines the progress of its social and sustainability agenda across its supply chain during what was a tumultuous year.

PepsiCo chief sustainability officer Jim Andrew said 2020 was undoubtedly a year of challenges.

“The challenges created by the COVID-19 pandemic impacted every corner of the globe and highlighted the urgent need to partner and drive change toward a more sustainable and resilient food system,”​ he said.

According to PepsiCo’s chairman and CEO Ramon Laguarta, the need to amplify efforts to save the planet are more than critical than ever before, exacerbated by the pandemic, which highlighted the inequalities that underlie both our food system and society.

“Unfortunately, the bonds holding this delicate ecosystem together are beginning to fray right in front of our eyes,” ​said Laguarta.

He added climate change is endangering natural resources, with one estimate logging every degree of warming could reduce staple crop yields by 10%.

“What used to be hundred-year weather events are now happening every other year, and according to the UN, more than half the planet’s fertile topsoil is now degraded. This is reducing the soil’s potential to grow food and sequester carbon, increasing our vulnerability to extreme weather events, and impacting water quality and biodiversity.”

As a company that sources crops from over seven million acres of farmland in 60 different countries, PepsiCo has deep roots in the global food system.

“That is why we are working to transform the way we create shared value by operating within planetary boundaries and inspiring positive change for the planet and people,” ​said Laguarta.

“This will make us a better company, with purpose more deeply integrated into our business strategy​. It will also make us faster and stronger, enabling accelerated growth and continued investment in our people, business and communities. And we hope it will make us an example, for our partners and our peers.”

Steps to a better system

As of 2020, PepsiCo’s sustainability approach has impacted every stage of its value chain:

Agriculture

The snack giant today sustainably sources 100% of its commodities in 28 countries, with nearly 87% sustainably sourced on a global scale. It aims to boost this to 100% of its key ingredients – including those from third parties – by 2030.

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The company’s Positive Agriculture programme aims to increase regenerative practices across seven million acres and improve the livelihood of over 250,000 people in its agricultural supply chain.

Climate

In the past five years, PepsiCo has reduced absolute greenhouse gas emissions across its value chain by 5%. It has pledged to reduce absolute GHG emissions across its value chain by more than 40% by 2030, with an ambition to reach net-zero emissions across its global operations by 2040.

PepsiCo is pushing to improve water-use efficiency by 15% in its agricultural supply chain (focused on corn and potatoes) in high water-risk areas; and improve operational water-use efficiency by 25% by 2025. It also aims to deliver safe water access to 25 million people by 2025.

The company has transitioned to 100% renewable electricity for its US direct operations. By the end of 2021, 15 countries in PepsiCo’s direct operations are expected to be fully sourcing renewable electricity.

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Packaging

The Doritos and Lay’s maker continues to reduce packaging from becoming waste, offering alternatives made from 100% rPET in 22 markets worldwide.

It is also ramping up the use of SodaStream – a ‘Beyond the Bottle’ reusable system that is now available in 45 countries – and launched SodaStream Professional, a mobile-enabled hydration platform that lets consumers digitally track how many plastic bottles they are saving. Ultimately, PepsiCo expects to reduce the use of around 78 billion single-use plastic bottles through this system by 2025.

People

The PepsiCo Foundation has invested more than $71m in COVID-19 relief to various projects across the world, and has to-date provide over 145 million meals to those impacted by the pandemic.

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The company has also ploughed more than $570m into its Racial Equality Journey to break down longstanding racial barriers and to elevate diverse voices among its supply chain partners and communities.

Product

As of 2020, 64% of PepsiCo’s snacks portfolio contains 1.3mg or less of sodium per calorie; 71% contains 1.1g or less of saturated fat per 100 calories; and 48% of its drinks portfolio has 100 calories or less from added sugars per 12oz serving. The goal is to reach 75% of its portfolio across all three targets by 2025.

It is also continually evolving its portfolio to meet new consumer preferences, with an emphasis on the plant-based movement. Here, PepsiCo now offers options through brands like Quaker, Off the Eaten Path, Sabra, Alvalle, Naked Juice, bare, Health Warrior and The PLANet Partnership (a joint venture with Beyond Meat).

Big bold steps are the way forward

As proud as PepsiCo is of these achievements, Laguerta conceded there is still much to be done and hopes to combine all its ESG reporting – including sustainability, diversity & inclusion and human rights – in one report next year to further increase transparency.

“Bottom line: We do not intend to proceed with business as usual,” ​he said.

“As one of the world’s leading food and beverage companies, we have the responsibility to take big, bold steps that catalyse positive change – change that will have an impact far beyond our company and outlast the current moment.”

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