Through our new Planet goals, we will work to reduce our environmental impact while growing our business and helping to meet the food, beverage and natural resource needs of our changing world.
Helping to create a healthier relationship between people and food includes protecting the environment and finding sustainable ways to produce more food.
PepsiCo’s business depends on the availability of the natural resources needed to make our products. Agriculture uses the vast majority of the world’s available fresh water at the same time that water availability is becoming increasingly limited. As the world’s population grows, the demand for water and energy will also rise. And if society follows business as usual, leading global organizations expect that greenhouse gas (GHG) emissions will increase in the coming years, further accelerating climate change and putting crops at potential increased risk. Alongside these complex environmental problems, by 2050 it is expected that, to meet the rising demand for food, society will either need to increase food production by 70 percent or drastically reduce the food that is currently wasted or lost.
Amid the urgency of these issues and their relationship to societal health and our business, PepsiCo will advance its efforts in the protection and conservation of natural resources.
For years, we have been focused on finding ways to reduce our environmental footprint in water, packaging, waste, energy and agriculture—areas that are critical to our business and where we can make the biggest impact. We were one of the first global companies to publicly recognize water as a basic human right and were honored with the Stockholm International Water Institute’s Industry Water Award for our water stewardship.
While we have advanced our packaging design to be increasingly sustainable, we also support public recovery and recycling infrastructure, cross-sector collaboration and consumer behavior in the effort to avoid more packaging waste sent to landfill or polluting our oceans. Our commitment to reducing waste also applies to our production facilities where we have made significant progress in recycling and reusing waste.
Our historic energy work has focused on efforts in our operations, which we will expand on in coming years as part of our plan to address greenhouse gas emissions (GHG) in our value chain. Similarly, we intend to expand best practices in sustainable agriculture going forward, using what we have already learned by engaging 28,000 growers in our supply chain.
Managing the interrelationship between complex environmental issues is crucial and it is also good business. Our water, energy, packaging and waste-reduction initiatives delivered more than $600 million in cost savings between 2010-2015.
Most recently in 2015, we exceeded our operational water-use efficiency goal while providing access to safe water to 9 million people since 2006 through the PepsiCo Foundation and its partners. We also made progress in decoupling the growth of our production volume from our greenhouse gas emissions. Our Sustainable Farming Initiative expanded significantly. And we removed over 100 million pounds of packaging material from the market in 2015 compared with the prior year, and further reduced the amount of waste we sent to landfill.
View our 2017 Report and 2025 Agenda to learn more about our progress in each of these areas.
As you’ll see in our 2025 Agenda, we will work to extend our environmental stewardship efforts to many more members of our supply chain and communities where we work while continuing to improve the efficiency of our manufacturing operations. Our size, influence, resources and relationships, coupled with our sense of responsibility to make a difference, present a considerable opportunity to incentivize, support and scale more sustainable practices in the years ahead.
Changing the current environmental equation will require many hands. We will work with others, therefore, to achieve our Planet goals while also striving to contribute to global frameworks such as the Paris Climate Agreement and the UN 2030 Sustainable Development Goals
Creating a Positive Water Impact
At PepsiCo, we believe that water is a fundamental human right, indispensable to every community around the world. More than 785 million people globally lack access to safe water. Climate change and increased consumption are placing an increasing burden on water supply resulting in cities facing “day zero” crises, communities being displaced, and environmental systems being degraded. At the current rate of progress, it is projected that there will be a 40% gap between global water supply and demand by 2030. There is a strong imperative for companies like PepsiCo to deploy their expertise and resources to address this issue.
Water is also a critical resource for our business, at all points along our value chain—from the farms where we grow the fruits, vegetables and grains that make up our product portfolio, to our manufacturing processes where water is used to ensure we meet the highest quality food safety standards, and as one of the key ingredients in many of our products. PepsiCo’s business depends on water, and as such, we have a vested interest in conserving and protecting it.
Water stewardship has long been one of our top priorities. We understand that our ability to manage our water footprint is inextricably linked to the success of our business and of the local communities where we operate. We were one of the first companies of our size to acknowledge water as a human right. In order to do our part to honor that right, we have adopted an integrated approach to watershed management across our supply chain that includes;
IMPROVE WATER-USE EFFICIENCY IN AGRICULTURE
Approximately 70 percent of the world’s freshwater being used for agriculture. As a company that depends on agricultural raw materials for our products, we understand how critical it is to improve our water-use efficiency in our agricultural operations. As a result, we place great importance on ensuring our agricultural partners are employing sustainable water management practices. For several years, PepsiCo has been working with growers through our global Sustainable Farming Program (SFP) (formerly the Sustainable Farming Initiative), and through local partnerships to drive efficient water usage in farmers’ fields in Pakistan. In 2020 we deployed HEIS ( High efficiency irrigation system) in 2000 acres of farm land across Multan, Kasur and Depalpur region, conserving up to 1.9 billion liters of water.
IMPROVE WATER-USE EFFICIENCY IN DIRECT Operations
We continue to be focused on improving our water-use efficiency in our manufacturing facilities, with a particular focus on high-water-risk locations. Our 2025 water operations goal is to achieve a 25 percent efficiency improvement in high-water-risk areas. In 2019 PepsiCo had 71 high-water-risk manufacturing locations as defined by our internal water risk assessment process, including Pakistan sites.
In 2020, we recorded a 45 percent improvement in our water-use efficiency rate at our direct operations (Sundar & Multan combined) when compared to our 2015 baseline.
Our approach is multi-faceted and aims to capture efficiencies through initiatives like our Resource Conservation (ReCon) program, which identifies and shares operational efficiency best practices across our locations globally. Additionally, PepsiCo is developing and deploying design water efficiency improvements in our manufacturing processes and in downstream water recovery technology. These include enhanced wastewater treatment systems and recovery technology for water reuse. We have also deployed advanced technologies such as a low water splash cone for potato slicing, condensate recovery, reverse osmosis (RO) systems and Arsenic removal systems to drive further progress in water quality and efficiency.
PepsiCo Pakistan also ensures 100% compliance to waste water effluent internal and external parameters set by environment authorities and strict PEP standards.
While we focus on improving water-use efficiency in our agricultural and manufacturing operations, creating a healthier watershed also requires that we give back water that we have used. This is critical to the continuity of our business, our license to operate, and the health of our communities. That is why we have set a goal to replenish 100 percent of the water we use in manufacturing operations located in high-water-risk areas by 2025, and ensure that such replenishment takes place in the same watershed where the extraction has occurred.
We have partnered with WWF to improve water security and community water stewardship in Lahore region near to our snacks operation site. In 2020, we replenished more than 10 million liters of water through several projects in our Sundar plant’s water shed including Floating treatment wetlands, rain water collection tanks, rainwater recharge wells and ablution water reuse. These interventions have directly benefitted a population of 55,000 people.
We plan to continue delivering against our goal by investing in projects that improve the quantity and/or the quality of the water in the watershed. Our projects reflect the input and support of the local community.
Access to Safe water
As the world’s population continues to grow, there is an increasing need for safe water and sanitation facilities. According to The United Nations, 2.2 billion people lack access to safely managed drinking water and 4.2 billion lack safely managed sanitation services. Access to safe, clean water is becoming more important as the severity of climate change-driven droughts and floods increases and rainfall become less predictable. Without adequate water, it is expected that crop yields will sharply drop and hundreds of thousands of hectares of farmland will be unproductive. Climate change will disproportionately affect women and girls, who already bear the burden of family water collection—which UNICEF estimates at 200 million hours every day.
From the early days of our sustainability program, addressing safe water access has been a priority for PepsiCo. Through partnerships funded by the PepsiCo Foundation, we have provided access to safe water to more than 30,000 people in Lahore region as of the end of 2020.
Advocacy for improved water security
Having a positive water impact means improving water security not just within our four walls, but out in the watersheds in which we operate. We know we can make a significant impact in water stewardship through the actions we take across our value chain, but we also have opportunities to help mitigate water insecurity on a broader level, through advocacy. We are supporting existing collaborative efforts to address water risk and mitigate water insecurity and creating new opportunities to collaborate where we see need. We are doing this in three ways:
- By identifying water related risks in our watersheds and efforts to mitigate them
- By sharing information and best practices with our suppliers
- By providing public education and training for communities in our watershed
PepsiCo is a member of the Alliance for Water Stewardship (AWS). We aim to fully adopt the AWS Standard at both operation facilities in Pakistan by 2021, using it as a vehicle for advocacy and to help ensure that freshwater resources are available for all water stakeholders. In 2019 we launched the pilot project to adopt the Standard at our Sundar plant and kicked off the journey for Multan plant in 2020. We compiled up cross-functional teams of PepsiCo associates who have come together to diagnose local water risks and opportunities for the facilities to be good water stewards.