Path to Positive

It’s my first “Path to Positive” newsletter, destined to come to you on a quarterly basis! I’ll share an update on what PepsiCo is doing both internally and throughout the global food system as we strive to positively impact the planet and people. Through PepsiCo Positive (pep+) , our strategic transformation, we’re aiming to deliver a more sustainable, people-centric future, driving growth and value, for everyone.

?pep+ Headlines: Progress Report

It’s that time of year when we look back on milestones on our pep+ journey so far. Here at PepsiCo, we’ve been heads down the past few weeks, working to share our annual progress on pep+ through our ESG Suite of Reporting, including our ESG Summary , ESG Data Hub and ESG Topics A-Z .

• All in all, 2023 was a good year in delivering pep+. We reached some of our goals ahead of schedule, including on agricultural and operational water-use efficiency targets[i], and introduced new goals on nutrition.? And, while we have more to do, we made progress on both emissions and plastics.? We continue to review our goals and refine our approach in the context of these challenges.
• We reduced Scope 1 and 2 emissions by 13% and total Scope 1, 2 and 3 emissions by 5% year over year[ii]. We have now reduced emissions across all Scopes by 4% versus our 2015 baseline[iii], even while delivering significant growth over that period.
• And, notably, we achieved a 4% reduction year-over-year in our use of virgin plastic derived from non-renewable sources[iv]. Advancing broad packaging and climate progress requires systemic changes, collective actions and industry-wide investment so we’ll look to continue our engagement, working with others, as we aim to strengthen our business for the long-term and build a stronger, more sustainable future for all.
• If you have been following me here on LinkedIn , you’ll know how important regenerative agriculture is for pep+. I am pleased to report that in 2023 we doubled our global regenerative farming footprint to more than 1.8 million acres[v].
• We also made progress to advance food security, with almost 61 million people[vi] provided with access to nutritious food since we began reporting, and we’ve also provided safe water access to more than an additional 10 million people in 2023.

Progress I’m Proud Of:

• Closed Loop Reusable Cup pilot in Petaluma in the U.S. with Starbucks and Coca Cola
• Yara Low Emission Fertilizer Partnership in Europe
• Solar farm investments near two beverage plants in Poland
• pep+ Greenhouse Accelerator participant selection in Asia Pacific
• Mega Green Accelerator start-up selection in Middle East and North Africa
• Climate Resilience Platform – free to all tool to help plan for climate impacts on crops
• Transition to biomethane in PepsiCo Foods site in Itu, Brazil
• New snacks range with chickpeas launched in the U.K.
• GreenDot recycled content agreement for flexible film in Europe

The Discussion: Scaling Regenerative Agriculture

Despite our strong progress last year, one of the areas I continue to push on is scaling regenerative agriculture practices globally. This is the challenge that I shared in a blog with Tania Strauss at the World Economic Forum , who has convened the First Movers Coalition for Food. Read our perspective around “Scaling Regenerative Agriculture across the Food System:”

?“Embracing regenerative farming globally could help provide a?third of the land-based climate action needed by 2030 . By scaling regenerative agriculture, the global food system has the potential to play a significant role in tackling greenhouse gas emissions while delivering additional environmental benefits. However, a significant transformation of how food is grown and produced is needed to bridge the gap to that ambition.”

?I’d love to hear your perspective in the comments. What major unlocks do you think are needed to support this transition?

My Take on…Scope 3 Emissions

94% of PepsiCo’s greenhouse gas emissions lie outside the walls of our business as Scope 3 emissions. Like many large, global organizations, reducing those is the biggest challenge we face. Ultimately, it will require collective industry action and government advances in investment, policy and infrastructure to overcome.

We are working to support our suppliers and partners in their transition, while also playing our part in decarbonizing our own Scope 1 and 2 emissions, which in turn reduces our customers’ Scope 3 emissions.

Read more on our support for suppliers or visit our Partners for Tomorrow – Sustainability Action Center.

?What actions are you taking to support your supply chain in reducing emissions?

As many of you know, I’m an avid reader and my latest pick from my too-large library is a book that I hope won’t keep you up at night, but it certainly stayed with me long after.?

Here are my reflections on: The ice at the end of the world by Jon Gertner

Up near the top of the world there is a very, very large ice cube. It’s about 10% larger than Mexico and over 2 km thick. And it is melting very, very quickly. In fact, it’s melting five times faster than it was only 20 years ago and is already having a measurable impact on sea level rise. And I fear it’s only just getting started.

This was a great read, and an important one. Specifically, it put Greenland into its environmental context as a huge store of freshwater, one of the earth’s great thermostats, and a key part of what makes Northern Europe inhabitable. ?It also painted a vivid portrait of some of the early European and American explorers who made the first recorded crossings of the island and helped to map it, in particular its Northern reaches. The book also gave some interesting descriptions of the difficulty of spending any time “on the ice”. Some of you reading this know that I have used references to Greenland in some of my speeches, and I think it is an incredibly important topic for all of us to know at least a little bit about as it is on the leading edge of what climate change is doing to our world. I highly recommended this quick read that covers an immense amount of important ground/ice…!??

Let me know your thoughts once you’ve given it a read!

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See you next quarter for a roundup of Climate Week New York and a look ahead to COP season. Subscribe for future editions or hit the button in the upper right corner of the page. If you have friends or colleagues who would benefit from reading the newsletter, please share.

Share your feedback on the first issue in the comments or connect with me .

[i] Measured versus a 2015 baseline. Goal reflects the exclusion of third-party facilities. Between 2006–2015, water-use efficiency improved by 26% in global legacy operations at the date of target setting. World Resource Institute’s Aqueduct water stress assessment tool is used to reconfirm high water-risk areas every three years

[ii] Reduced Scope 1 and 2 emissions by 33% and total Scope 1, 2 and 3 emissions by 4% measured versus a 2015 baseline.? In 2023, approximately 80% of the Company’s direct global electricity needs were met with renewable electricity mechanisms, including on-site solar, off-site power purchase agreements and renewable energy credits

[iii] ?In 2023, we continued to enhance our calculation methodology and reflected the inclusion of additional data. Where actual data was not available, estimated data was used

[iv] Absolute tonnage of virgin plastic derived from non-renewable sources increased by 6% measured versus a 2020 baseline

[v] PepsiCo considers an acre as delivering regenerative impact when the adoption of regenerative agriculture practices results in quantified improvements across at least two of the environmental outcome areas, with a strong preference for removing or reducing GHG emissions to be one impact area. Refer to PepsiCo's Regenerative Agriculture Practice Bank for a comprehensive listing of practices directly or indirectly linked to the five impact areas. Regenerative acres reported represent the annual count in each year presented based on actions undertaken since 2021

[vi] Results represent the cumulative sum of people reached with nutritious meals per annual reporting period through programs funded by the PepsiCo Foundation, as well as through commercial efforts that are intended to provide nutritious meals. Initial target setting for this metric did not include Pioneer Foods, which delivered accessibility to more than 20 million people in each reported year. The target will be reassessed in the future to fully account for both commercial and charitable efforts. See Calculation methodology in our ESG Topics A-Z for further explanation of how we calculate this goal.