PepsiCo wants to grow profits and shrink its carbon footprint. That requires the company to "go bigger" and "accelerate" climate action, a top sustainability exec says.
- PepsiCo's sprawling global supply chains account for 93% of its carbon footprint.
- That supply chain is growing and emitting more greenhouse gas emissions.
This article is part of Insider's weekly newsletter on sustainability, written by Catherine Boudreau, senior sustainability reporter.
Snackers around the world consume some 1 billion PepsiCo products every day.
The ingredients in those snacks and drinks — plus the packaging, manufacturing, and shipping required to get everything from Cheetos to Gatorade into our hands — make up about 93% of PepsiCo's greenhouse-gas output, also known as Scope 3 emissions.
In 2021, the company announced a strategy to transform those supply chains so it could both grow profits and shrink emissions by 40% this decade. But PepsiCo's Scope 3 emissions rose 5% last year compared to 2015 levels, largely due to "unprecedented business growth." Revenue jumped 25% during that time to nearly $80 billion.
Jim Andrew, PepsiCo's executive vice president and chief sustainability officer, told Insider he's confident the strategy will deliver results in the coming years. I spoke to Andrew on the sidelines of Climate Week NYC. Read our conversation below.
Catherine Boudreau: How can PepsiCo sell more products and reduce emissions?
Jim Andrew: We've made some great progress, but we need to go bigger on scale and accelerate everything. Regenerative agriculture is really important. We have a big agricultural footprint. We touch about 7 million acres in any given year, which is about the size of Maryland.
Last year, we helped put regenerative practices on 345,000 acres and eventually will expand that to all 7 million. We cost share on practices like cover cropping and no-till farming. We just announced a partnership with ADM, a 7 ½-year agreement to bring regenerative-agricultural practices to another 2 million acres in the US.
We've also told our independent bottlers and co-manufacturers in the US and around the world to report their emissions by the end of this year and a science-based target to reduce them by the end of 2023.
What about clean energy?
PepsiCo said it will be 100% renewable across its value chain, and we're already at 70% around the world. One of the best things our suppliers can do is get onto renewable electricity.
We're all about putting new electricity into the grid. There are a variety of instruments to do that, including a virtual power-purchase agreement. We teamed up with Schneider Electric to create a frictionless way for suppliers to get onto renewable electricity without having to do the mountains of paperwork and contracting that we had to do at first.
That takes some time to set up. We didn't get any climate benefit from that last year, but we absolutely will this year.
PepsiCo supports a global treaty to end plastic waste. Why?
It's not as simple as not using a certain cup anymore. There needs to be policy and infrastructure to support collection and sortation. We need consumers to do something. That whole chain needs to work. A well-designed treaty would enable that transition.
We have to do our part as a producer by reducing plastic wherever we can, like light weighting products and using more recycled content. We also have to reinvent. PepsiCo spent $3.5 billion on SodaStream in 2018 and expanded it significantly, putting the flavors people love on the platform. Between now and 2030, we estimate it will save 200 billion bottles because consumers are making beverages at home with no single-use plastic.
A lot of waste gets shipped overseas and ends up in landfills and waterways. What is PepsiCo doing about that?
We invested in a group called Circulate Capital. They have teams in India and Southeast Asia that are working with the informal sector in a way that's very respectful. There are millions of people around the world in the informal sector that collect waste to get it sorted and then processed.