PepsiCo Climate Change Page

ClimateChange

Implementing solutions to address climate change is important to the future of our company, customers, consumers and our shared world. 

We have a strong interest in reducing our greenhouse gas (GHG) emissions given the risks we believe climate change presents to our business. Climate change could have an impact on the quantity and quality of agricultural raw materials available for our products; create weather patterns that impact our ability to operate our facilities and supply chain; as well as impact the availability and quality of water. These potential challenges to our business make GHG emission reductions a priority for PepsiCo.

We believe industry and governments should commit to science-based action to keep global temperature increases to 2˚ Celsius above pre-industrial levels, as described by the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Our goal to reduce absolute GHG emissions across our value chain by at least 20 percent by 2030, part of our Performance with Purpose (PwP) 2025 agenda, was made within this science-based context. 

Our reduction goal covers our entire value chain and is an absolute goal, meaning that it includes reductions in emissions from our current GHG footprint as well as additional emissions that result from anticipated business growth between now and 2030. Our goal has been verified as meeting the requirements of ‘science-based’ by the Science Based Targets Initiative, a partnership between the CDP, World Resources Institute, World Wildlife Fund and the UN Global Compact.

Achieving our 20 percent absolute reduction goal will require programs in both our own direct operations (to reduce Scope 1 and 2 GHG emissions) and in our value chain (to reduce Scope 3 emissions). Our current and future efforts to reduce Scope 1 and 2 emissions build on the groundwork we laid during our first generation of Performance with Purpose goals. Between 2006 and 2015, we implemented projects across our legacy operations that improved energy efficiency by nearly 18 percent. For our new goal, we have expanded the scope of our GHG emission reduction work to encompass our business as it exists today, a larger and more complex operational footprint. 

Scope 1 & 2: Progress and Performance 

We have made early progress in reducing Scope 1 and 2 emissions – achieving a 0.72 percent reduction in emissions in 2016 against the 2015 baseline. For PepsiCo, Scopes 1 and 2 emissions, which make up approximately 8 percent of our carbon footprint, come from sources that include on-site energy generation, fleet fuel, and purchased electricity. We achieved this through a variety of actions across our operations. One of these was energy efficiency improvements achieved by our Resource Conservation (ReCon) program, a comprehensive, global platform of resources, tools and programs designed to improve energy, water and waste efficiencies in our manufacturing processes.

In addition, our increased use of on-site renewable energy continued in 2016. In March 2016, our Mexico Foods initiated a power purchase agreement to source a large portion of its power from wind energy. From April-December 2016, this business sourced 73 percent of its power via wind energy, on an average monthly basis. PepsiCo also joined the Renewables Business Center at the Rocky Mountain Institute and signed on to the Renewable Energy Buyers Principles, an initiative facilitated by the World Resources Institute and the World Wildlife Fund. These partnerships are informing our renewable energy procurement strategy.

For a number of years, we also have made significant improvements in fleet efficiency, with our Frito-Lay Compressed Natural Gas (CNG) fleet having reached 100 million miles traveled in 2016. Today, 40 percent of our Over-the-Road fleet has been converted to CNG, with these freight trucks emitting 23 percent fewer GHG tailpipe emissions than the diesel freight trucks they replaced. In addition, Frito-Lay North America maintains nearly 200 full-electric vehicles (EVs), the largest commercial fleet of EV trucks in the US. Since our EV program began in 2010, we have eliminated the need for approximately 1.2 million gallons of diesel fuel, equivalent to keeping more than 2,100 passenger cars off the road for a year. In addition, we are one of the original supporters of the Sustainable Fuel Buyers’ Principles, developed by the non-governmental organization Business for Social Responsibility (BSR). These principles encourage accelerating the transition to sustainable, low-carbon fuel and related technologies.

Scope 3: Progress and Performance

While we continue to progress on reducing GHG emissions within our operations, we know that our greatest opportunity for progress lies in reductions outside of our direct operations – our Scope 3 emissions, which account for approximately 92 percent of our carbon footprint. For PepsiCo, these emissions originate from farming, packaging manufacture, and third-party transportation, among other sources.

In determining the methodology behind our Scope 3 emissions reduction, we projected our Scope 3 emissions to 2030 based on the best available business as usual growth estimates. We also determined what our Scope 3 emissions should be in 2030 if we reduced 20 percent against our 2015 baseline. The difference between these two trajectories is our best estimate of our target reduction amount for Scope 3 emissions. We believe this is conservative, as we do not expect our emissions to grow in a business as usual manner.

In 2016, we reduced Scope 3 emissions by just under half a million metric tonnes versus our 2015 baseline. This represents approximately 1 percent of our 2030 target reduction amount. These reductions were driven largely by improvements in our vending and cooler equipment, in which we reduced GHG emissions by 12 percent in 2016. We did so by replacing less energy efficiency models with more efficient ones and by continuing to transition to hydrofluorocarbon (HFC)-free refrigerants. Transitioning to HFC-free equipment has been a major focus for us, with all of our company-owned units in Europe now HFC-free, and those in North America to follow by 2020.

Going forward, our plan to reduce Scope 3 emissions includes continuing to improve vending and cooler efficiencies, increasing recycled content in packaging materials, developing alternative packaging materials, reducing GHG emissions in our agricultural supply chain, and importantly, incorporating environmentally-conscious design into our product development process. 

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