PepsiCo

Sustainable development strategy
PepsiCo discloses a long-term sustainability strategy that covers all sustainability topics across environment, nutrition and social inclusion. The company also lists its most material topics, distinguishing between priority, major and foundational and sets related targets. It reports progress on all of its priority topics and targets.

Stakeholder engagement
PepsiCo leads in stakeholder engagement. The company discloses the outcomes of its stakeholder engagement activities and their integration into its sustainability strategy. These dialogues cover sustainability issues across environment, nutrition and social inclusion. Further, PepsiCo discloses why engaging with its stakeholders is important because of how they impact its business activities.

Scope 1, 2 and 3 greenhouse gas emissions
PepsiCo demonstrates leading practice in reducing its greenhouse gas emissions (GHG), as it has set a target to reduce absolute GHG emissions by at least 20% by 2030. In 2021, the company set a new goal to achieve net-zero emissions by 2040. It also aims to reduce scope 1 and 2 emissions by 75% and scope 3 emissions by 40% by 2030. The company’s scope 1 and 2 emissions reduction targets are approved by the Science Based Targets initiative and are in line with the 1.5-degree scenario. PepsiCo is demonstrating progress towards these targets.

Soil health and agrobiodiversity, and fertiliser and pesticide use
PepsiCo demonstrates leadership in supporting agricultural practices that improve soil health and in optimising the use of fertilisers and pesticides. The company has set a target to achieve 100% sustainably sourced priority raw materials based on business needs by 2025, and it reports progress against this target. As part of its sustainable agriculture policy, the company also aims to optimise the use of pesticides, nutrients and other agrochemicals.

Water use
PepsiCo provides evidence of engaging with its suppliers to reduce water withdrawals across its supply chain through its Sustainable Farming Programme. It also discloses the proportion of sourced agricultural commodities that originate from areas with water stress. PepsiCo has set a target to improve water-use efficiency by 15% in its supply chain. The company has been working with farmers via its Sustainable Farming Programme and local partner to drive more efficient water use.

No leading practices were identified for the company in the nutrition measurement area.

No leading practices were identified for the company in the social inclusion measurement area.

Governance and accountability for sustainable development
PepsiCo’s Public Policy and Sustainability Committee oversees the company’s sustainability issues. Accountability for its sustainable development strategy lies with the highest governance body. While the company discloses the remuneration policy for its highest governance body, it is unclear whether this covers sustainability topics across environment, nutrition and social inclusion.

Protection of terrestrial natural ecosystems
While PepsiCo is committed to realising zero net deforestation in its own operations and global supply chain, it does not demonstrate that it has achieved 100% deforestation and conversion-free supply chains for palm oil or soya.

Food loss and waste
While PepsiCo aims to reach a 99% diversion rate by 2025 in its direct operations, it is unclear whether this target is specific to food waste. The company details some activities that address food waste, such as converting leftover potato peelings into low-carbon fertiliser in one of its plants. However, it has an opportunity to commit by setting targets to reduce food loss and waste across its operations and supply chain, and reporting against them.

Availability of healthy foods
PepsiCo has set several targets around improving the nutritional content of its products, such as reducing the grams of saturated fat, sodium and sugar. However, the company can improve its performance by establishing a sales-based target for the percentage of healthy foods in its portfolio and reporting progress against it.

Accessibility and affordability of healthy foods
While PepsiCo has set a goal to expand its affordable nutrition business with a focus on Latin America and sub-Saharan Africa, the details of this are unclear. The company can improve its performance by implementing strategic commercial activities designed to improve the accessibility and affordability of healthy foods more systematically.

Responsible marketing
PepsiCo has a policy that applies to all media and is specifically tailored to children and teens. However, while it provides evidence of marketing activities, the company is encouraged to provide clearer evidence of its initiatives to promote healthy options in schools.

Workforce nutrition
While PepsiCo has a nutrition workforce programme that addresses healthy food at work, nutrition education, health checks and breastfeeding support, it does not disclose quantitative evidence on the percentage of food offerings in the workplace that are healthy.

Child labour
While PepsiCo prohibits child labour in its own operations and requires its suppliers to adhere to the same standard, it has an opportunity to disclose a policy requiring its suppliers to have an age-verification system in place.

Forced labour
PepsiCo prohibits forced labour in its operations and requires its suppliers to adhere to the same standard. It also prohibits suppliers from retaining workers’ personal documents and restricting workers’ freedom of movement. However, it does not provide evidence of prohibition of intimidation against workers in its supply chain.

Living wage
PepsiCo does not disclose that it pays its workers a living wage or requires its suppliers to do the same. Neither has it set targets to do so in the future.

Farmer and fisher productivity and resilience
PepsiCo has set a goal to sustainably source several priority crops directly from farmers by 2025. The company also describes its Sustainable Farming Programme and that it has improved the livelihoods of 250,000 people in its agricultural supply chain and communities. However, the company can improve its performance by disclosing the impact of all of its support activities.

Land rights
PepsiCo is one of the few companies in the benchmark that has a land rights policy applicable to its own operations and suppliers, stating zero tolerance for land displacements of any peoples, in accordance with FPIC. The company also provides a grievance mechanism that is available to external individuals and expects suppliers to have the same. The company can still improve its performance by disclosing its process for providing prompt and adequate remediation that includes access to justice when legitimate rights holders are negatively affected.

Through its publicly available policies and commitments across all topics, PepsiCo demonstrates leading performance in respect for human rights. The company has a commitment to respecting human rights and ILO core labour rights. It displays a human rights due diligence process which includes the identification, assessment, and action plan for the salient human rights risks in its operations and supply chain. It further provides grievance mechanisms that are accessible for employees and external stakeholders, such as communities.

PepsiCo has started the journey to ensuring health and safety and working hours fundamentals, but it does not commit to paying its workers a living wage. While it discloses the proportion of its direct workforce covered by collective bargaining agreements, it does not support its supply chain partners to do the same. The company discloses the proportion of women in its workforce but does not disclose these proportions for any other category of diversity. Finally, while it commits to and discloses targets towards gender equality and women’s empowerment, it does not disclose the ratio of remuneration of women to men in its direct operations.

PepsiCo addresses most key issues for ethical business conduct through publicly available policies or statements, but there remains an opportunity for these to be strengthened. The company has public commitments towards prohibiting bribery and corruption, protecting personal data, as well as a policy statement setting out its lobbying and political engagement approach. Furthermore, it takes steps to address any risks and incidents regarding bribery and corruption. However, PepsiCo does not have a public global tax strategy, nor does it disclose its corporate income tax by jurisdiction.