PepsiCo sets 2025 sustainability agenda

by Keith Nunes
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PURCHASE, N.Y. — PepsiCo, Inc.’s new 2025 sustainability agenda features ambitious health and wellness, environmental and social goals, the company said. In addition to reducing the amounts of sugar, sodium and fat in many of its products, it also is focused on improving the efficiency of its manufacturing and distribution operation while extending its role as an environmental steward.

Indra Nooyi, PepsiCo
Indra Nooyi, chairman and c.e.o. of PepsiCo

“To succeed in today’s volatile and changing world, corporations must do three things exceedingly well: focus on delivering strong financial performance, do it in a way that is sustainable over time and be responsive to the needs of society,” said Indra Nooyi, chairman and chief executive officer. “The first 10 years of PepsiCo's ‘Performance with Purpose’ journey have demonstrated what is possible when a company does well by also doing good. We have created significant shareholder value, while taking important steps to address environmental, health and social priorities all around the world.”

PepsiCo’s new plan is based on the United Nations Sustainable Development Goals and will focus on three priorities: helping to improve consumer health and well-being through the products it sells; protecting the planet; and empowering people around the world.

“PepsiCo’s journey is far from complete, and our new goals are designed to build on our progress and broaden our efforts,” Ms. Nooyi said. “Companies like PepsiCo have a tremendous opportunity — as well as a responsibility — to not only make a profit, but to do so in a way that makes a difference in the world.”

PepsiCo Hello Goodness vending machines
Part of PepsiCo's healthy initiative includes new Hello Goodness vending machines with better-for-you options.

Within its product portfolio, PepsiCo’s goal is to enable better nutrition at scale by developing a broader portfolio of food and beverage choices and increasing the consumer’s access to nutritious options. Stated goals the company will attempt to achieve include ensuring at least two-thirds of its global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-oz serving; ensuring at least three-quarters of its global foods portfolio volume will not exceed 1.1 grams of saturated fat per 100 calories; ensuring at least three-quarters of its global foods portfolio volume will not exceed 1.3 mg of sodium per calorie; making sure the rate of sales growth of what the company refers to as “everyday nutrition” products will outpace the rate of sales growth in the balance of PepsiCo’s portfolio. Everyday Nutrition products include those that deliver whole grains, fruits and vegetables, dairy, protein and hydration; providing access to at least three billion servings of nutritious foods and beverages to underserved communities and consumers.

Improving operational efficiencies

With regard to sustainability, PepsiCo plans to reduce its environmental footprint through operational efficiencies and mobilization of its suppliers and business partners.

Dr. Andrew Steer, president and c.e.o. of the World Resources Institute
Dr. Andrew Steer, president and c.e.o. of the World Resources Institute

“The planet is facing unprecedented challenges that require us to make transformational changes to the way we grow the economy, feed the world and provide dignified employment,” said Dr. Andrew Steer, president and c.e.o. of the World Resources Institute. “I welcome the breadth of PepsiCo’s approach and I urge the company to continue leading on these important issues. PepsiCo’s actions demonstrate how business can serve as an agent of change and enable the type of solutions needed for us to thrive in a resource-constrained world.”

Specifically, PepsiCo plans to:

• Improve the water-use efficiency of its direct agricultural supply chain by 15% in high-water-risk sourcing areas by 2025. The savings equate to the same approximate volume of water used in PepsiCo manufacturing operations.

• Improve the water use efficiency of its direct manufacturing operations by 25% by 2025. This is in addition to the 25% improvement in water-use efficiency the company has achieved since 2006 and will include a focus on high-water-risk areas.

PepsiCo products
Pepsico is focused on reducing the amounts of sugar, sodium and fat in many of its products.

• Replenish 100% of the water it consumes in its manufacturing operations within high-water-risk areas, ensuring that the water is replenished in the same watershed from which it was extracted.

• With the PepsiCo Foundation and its partners, work to provide access to safe water to a total of 25 million people in the world’s highest water-risk areas by 2025, a continuation of efforts that began in 2006.

• Reduce absolute greenhouse gas emissions across the company’s value chain by at least 20% by 2030, with a focus on collaborating with suppliers, business partners and customers to reduce emissions related to agriculture, packaging and transportation.

• Sustainably source both direct and major non-direct agricultural raw materials by 2020 and 2025, respectively. Building on its earlier goal, PepsiCo also intends to invest in the necessary measures to complete its plans to sustainably source 100% of the palm oil and cane sugar it purchases by 2020.

• Achieve zero waste to landfill across its direct operations by 2025.

• Reduce the food waste it generates in its direct operations by 50% by 2025.

• Design 100% of its packaging to be recoverable or recyclable by 2025, while partnering to increase packaging recovery and recycling rates.

Putting people first

Building on its support for the United Nations Guiding Principles on Business and Human rights, PepsiCo said it will significantly broaden its focus on respecting human rights across the company’s supply chain. In addition, the company is pursuing new initiatives to promote diversity in its global workforce, support the advancement of women, and spur social and economic development in communities around the world.

Key initiatives the company hopes to achieve by 2025 include:

PepsiCo sustainable farming
PepsiCo plans to expand its sustainable farming initiative to approximately 7 million acres by 2025.

• Expanding its Sustainable Farming Initiative to approximately 7 million acres by 2025, covering crops that collectively comprise approximately three-quarters of its agricultural-based spend. PepsiCo said the S.F.I. is focused on promoting environmentally responsible agricultural practices, improving crop yields and growers’ livelihoods, and respecting human rights.

• Extending the principles of the company’s Supplier Code of Conduct to all franchisees and joint venture partners. The principles already apply to PepsiCo’s direct suppliers, according to the company.

• Investing $100 million in partnership with the PepsiCo Foundation to support initiatives to benefit 12.5 million women and girls around the world by 2025.

• Continuing to develop a diverse, inclusive and engaged workforce that reflects the communities where it does business. The efforts include a continued focus on achieving gender parity in PepsiCo’s management roles and pay equity for women.

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