PepsiCo Joins Calls for Action on Climate Change; Announces Goal to Phase Out HFC Equipment by 2020; and Reports Progress on Sustainability Goals
PepsiCo, Inc. (NYSE: PEP) today strengthened its commitment to action on climate change by announcing new goals for phasing out equipment with hydroflourocarbons (HFCs), signing both the Ceres BICEP Climate Declaration and the Prince of Wales’ Corporate Leaders Group Trillion Tonne Communique, and reporting progress on its energy efficiency initiatives. These commitments are part of PepsiCo’s overall strategy to address climate change by working across its business and with global leaders, who are set to renew their focus on climate change during the U.N. Climate Summit next week.
“Combating climate change is absolutely critical to the future of our company, customers, consumers—and our world,” said Indra Nooyi, Chairman & CEO of PepsiCo. “I believe all of us need to take action now. PepsiCo has already taken actions in our operations and throughout our supply chain to ’future-proof’ our company—all of which deliver real cost savings, mitigate risk, protect our license to operate, and create resilience in our supply chain.”
HFC-Free Equipment Goal
PepsiCo announced a goal that by 2020 all of its future point-of-sale equipment (coolers, vending machines and fountain dispensers) purchased in the United States, will be HFC-free. HFCs are a popular chemical coolant and are considered a potent greenhouse gas (GHG) that contributes to climate change. This goal is part of a recently launched partnership with the Obama Administration and other U.S. companies, which aims to reduce global consumption of HFCs by the equivalent of 700 million metric tons of carbon dioxide—or 1.5 percent of the world’s 2010 GHG emissions—through 2025.
To meet its goal, PepsiCo will begin purchasing new HFC-free equipment starting in 2015. PepsiCo has already begun to phase out HFCs in its equipment outside of the United States by buying more than 290,000 HFC-free pieces of equipment since 2009 and by using a 100 percent HFC-free insulation/foam for all new equipment. It has also minimized the impact of existing equipment by innovating its coolers and vending machines to improve their energy efficiency by 60 percent compared with a 2004 baseline. These combined efforts have reduced total GHG emissions by 18 percent since 2007.
Along with this goal, PepsiCo today became the largest U.S.-based food and beverage industry signatory of the Climate Declaration of the Ceres coalition, Business for Innovative Climate and Energy Policy (BICEP). PepsiCo also signed the Prince of Wales’ Corporate Leaders Group Trillion Tonne Communique.
“From our long-standing partnership with PepsiCo, and their commitment to ongoing stakeholder engagement, we know this leading food and beverage company understands the critical impact of climate change and the economic benefits of tackling it sooner rather than later,” said Mindy Lubber, President of Ceres, a nonprofit organization mobilizing business leadership on climate change and other global sustainability challenges. “We are happy that PepsiCo is continuing to move beyond its own operations and supply chain to urge further action from the private sector and government.”
Progress on Energy Efficiency, Sustainability Goals
PepsiCo reported a nearly 14 percent improvement in global energy efficiency in 2013 when compared with its 2006 baseline. This change represents progress towards PepsiCo’s goal of reducing energy intensity by 20 percent per unit of production by 2015 and is driven by resource conservation initiatives and conversion to renewable forms of energy. In 2013 alone, energy efficiency efforts delivered estimated cost savings of $75 million.
To achieve its goal of sustainable business growth—what the company calls Performance with Purpose—PepsiCo has set specific goals that guide its strategy and operations. Progress on these goals is highlighted in PepsiCo’s new 2013 Corporate Sustainability Report and Global Reporting Initiative (GRI) report and includes:
- Saving 14 billion liters of water through operational efficiency programs, translating to approximately $15 million in savings; and avoiding $3 million in landfill costs through PepsiCo’s Resource Conservation initiatives.
- Increasing the total amount of material recycled to more than 18 million pounds and 324 million containers since 2010.
- Expanding sourcing of certified sustainable agriculture raw materials, including 100 percent of potato and seed growers in Chile certified to the Rainforest Alliance standards, and achieving one of the first Fairtrade certifications in its category for Naked Coconut Water in the U.S.
These actions and broader company initiatives were recently recognized by the Dow Jones Sustainability Index (DJSI). PepsiCo was named to the DJSI North America Index for the ninth consecutive year and by the DJSI World Index for the eighth consecutive year with perfect scores in the areas of Code of Conduct/Compliance/Corruption & Bribery, Risk & Crisis Management, Packaging, Labor Practices and Human Rights and Raw Material Sourcing. PepsiCo is also the Beverage Industry Leader in North America.
New Pinterest Presence Launched
To coincide with the release of the Sustainability Report, PepsiCo launched an interactive Pinterest presence, which is a searchable, map-based repository for Performance with Purpose and global citizenship projects told through stories, photographs, videos and links to additional information.
PepsiCo products are enjoyed by consumers one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $66 billion in net revenue in 2013, driven by a complementary food and beverage portfolio that includes Frito-Lay, Pepsi-Cola, Quaker and Tropicana. PepsiCo’s product portfolio includes a wide range of enjoyable foods and beverages, including 22 brands that generate more than $1 billion each in estimated annual retail sales.
At the heart of PepsiCo is Performance with Purpose—our goal to deliver top-tier financial performance while creating sustainable growth in shareholder value. In practice, Performance with Purpose means providing a wide range of foods and beverages from treats to healthy eats; finding innovative ways to minimize our impact on the environment and reduce our operating costs; providing a safe and inclusive workplace for our employees globally; and respecting, supporting and investing in the local communities where we operate. For more information, please visit www.pepsico.com.
Statements in this communication that are “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. Terminology such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goals,” “guidance,” “intend,” “may,” “objectives,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such terms are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in demand for PepsiCo’s products, as a result of changes in consumer preferences or otherwise; changes in the legal and regulatory environment; imposition of new taxes, disagreements with tax authorities or additional tax liabilities; PepsiCo’s ability to compete effectively; PepsiCo’s ability to grow its business in developing and emerging markets or unstable political conditions, civil unrest or other developments and risks in the markets where PepsiCo’s products are sold; unfavorable economic conditions in the countries in which PepsiCo operates; increased costs, disruption of supply or shortages of raw materials and other supplies; failure to realize anticipated benefits from PepsiCo’s productivity initiatives or global operating model; disruption of PepsiCo’s supply chain; damage to PepsiCo’s reputation; failure to successfully complete or integrate acquisitions and joint ventures into PepsiCo’s existing operations or to complete or manage divestitures or refranchisings; PepsiCo’s ability to hire or retain key employees or a highly skilled and diverse workforce; trade consolidation or the loss of any key customer; any downgrade or potential downgrade of PepsiCo’s credit ratings; PepsiCo’s ability to protect its information systems against a cybersecurity incident; PepsiCo’s ability to build and sustain proper information technology infrastructure, successfully implement its ongoing business transformation initiative or share services for certain functions effectively; fluctuations or other changes in exchange rates; climate change, or legal, regulatory or market measures to address climate change; failure to successfully negotiate collective bargaining agreements or strikes or work stoppages; any infringement of or challenge to PepsiCo’s intellectual property rights; potential liabilities and costs from litigation or legal proceedings; and other factors that may adversely affect the price of PepsiCo’s common stock and financial performance.
For additional information on these and other factors that could cause PepsiCo’s actual results to materially differ from those set forth herein, please see PepsiCo’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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