Newsletter

PepsiCo and the environment

At PepsiCo, our vision is to deliver 'Performance with Purpose'. This means growing our business while acting sustainably and minimising our impact on the environment.

Our environmental responsibility covers all areas of our business. We have focused our efforts to be more sustainable on the three major environmental challenges which pose fundamental questions for modern society and business - climate change, resource depletion and water shortages. These are also the areas in which we can have the greatest impact.

Climate change

The only way that we can help address the threat of global warming is by working with consumers, governments, NGOs and other businesses to try and find solutions.

We recognise the many threats posed by global warming. Consequently, we are doing everything in our power to look for new, renewable sources of energy, and to make our energy use more efficient.

Resource depletion

The world's population is expected to reach 9 billion by 2050, yet the amount of non-renewable resources we currently use will far outstrip the earth's natural resources.

This is true not only for our energy use, but also for key materials, such as packaging.

Because we are aware of these threats, we have almost halved our waste, as well as reduced our carbon emissions.

Water shortages

The agricultural raw materials for our products, such as potatoes, oranges, apples and corn, are dependent on water.

However, water resources will come under increasing strain as the global population rises, and climate change means the resource is in danger of depleting. It is therefore imperative that at PepsiCo we seek to find ways to renew and reuse this vital supply.

The Environmental Sustainability Report

As part of our commitment to be more sustainable, we published our first UK Environmental Sustainability Report in 2008. This reports our progress so far and our ongoing commitments.

Progress so far

  • Walkers energy use per Kg production reduced by 32% between 2000 and 2007
  • Quaker manufacturing powered by 100% renewable electricity
  • Launched the world's first carbon reduction logo on Walkers crisps
  • 16% less cardboard used in Walkers cases and 14% less plastic used in Walkers multipacks
  • 18% less plastic used to make Copella and Tropicana bottles
  • Total waste reduced by 22.6% during 2007
  • Total waste to landfill reduced by 23.6% during 2007
  • Water use per Kg down by 42% (Walkers - 2001-2007) and 39% (Pepsi - 2003-2007)
  • Sourcing 100% British potatoes for Walkers crisps, which reduces food miles
  • Founder partner of Carbon Disclosure Project's Supply Chain Leadership Collaboration, gathering environmental data from suppliers

Energy conservation

By investing in new technologies and improving processes at our factories, we have succeeded in significantly reducing our energy consumption. In 2007 alone, we reduced our energy use by 5.2%, exceeding our target of 3%.

Between 2000 and 2007, we reduced carbon emissions by over 20% at our Quaker plant in Cupar, and by 32% at Walkers.

To help us, we have been working with the Carbon Trust, a government funded body that helps businesses move towards a low carbon economy. As part of this work, Walkers became the first consumer product in the world to display a carbon reduction logo.

We are continuing to work with the Carbon Trust across the business. Quaker will be next to join Walkers in adopting the carbon reduction logo.

The carbon reduction logo

  • The logo shows the carbon footprint of the pack from source to store. It features a downward arrow, which highlights a pledge to reduce that footprint year-on-year.
  • The carbon reduction logo is proof of our efforts to reduce carbon emissions.
  • We hope that it will encourage consumers to think about how their purchasing choices impact on the environment.

Pledge

  • To reduce energy use by 20% per Kg within three years.

Renewable energy

As well as reducing our consumption, we also want to work towards using 100% renewable energy.

The most prominent example of this commitment to become a more sustainable business can be seen at our Quaker plant in Cupar in Fife. We recently announced plans to run the plant on 100% renewable energy. Oat husks, which are a by-product of the milling process when making porridge, will be used to generate enough energy to power the entire site.

The centrepiece of the plan is a £6m combined heat and power biomass boiler, which will generate enough steam and electricity to power the site, reducing carbon dioxide emissions by 9,000 tonnes a year - a huge reduction equivalent to the typical annual carbon emissions of over 3,000 cars.

As a result, the site will become "carbon neutral" because it will run entirely on self- generated renewable energy. Furthermore, for the first three years, the site will produce surplus energy, exporting over 1,300 megawatt hours of renewable energy back to the National Grid.

The new plans will also mean that the oat husks no longer have to be transported away from the site. This will reduce the number of truck miles by over 172,000, eliminating a further 600,000kg of carbon dioxide emissions annually.

Pledge

  • Within 15 years, all energy used in manufacturing and distribution will be from renewable sources

Working with suppliers

As part of our work with the Carbon Trust, we found that the majority of energy emissions in the lifecycle of our products occur elsewhere in the supply chain.

As a result, we are working closely with our suppliers and growers to find ways to reduce our products' impact on the environment. In 2007, we held a Supplier Sustainability Summit, bringing together suppliers of raw materials and packaging in order to look at common risks and share best practice.

We are also a founding partner of the Carbon Disclosure Project's Supply Chain Leadership Collaboration scheme.

The Supply Chain Leadership Collaboration Scheme

  • Launched in October 2007, the SCLC brings together sector leaders to manage emissions through the supply chain. It allows companies to measure their supply chain emissions using data collected directly from suppliers - a key step in managing any company's carbon footprint.

Fuel efficiency

We have put considerable effort into reducing the carbon footprint of our distribution network, and we have invested in several initiatives to improve the efficiency of our fleet.

By streamlining our vehicles to reduce wind resistance, introducing tyres with less friction, introducing new journey planning systems and giving our drivers incentives to drive in a more energy- efficient way, we improved our fleet fuel efficiency by 12% between 2000 and 2006. In 2007, despite shipping 10.3% more products, we reduced our absolute distribution footprint by 4.3%.

In the next three years, our entire fleet of trucks will be replaced by 'Euro 5' models, which will reduce Nitrogen Oxide emissions by 60%, and we are also introducing a new biodiesel, using waste oil from our crisp manufacturing and trialling electric and hydrogen alternatives.

Using water wisely

Closer monitoring of our water consumption has allowed us to identify ways to manage it more effectively. It has led to the introduction of new engineering solutions as well as better operational controls.

At Walkers, for example, we now reuse water from our starch recovery programme to wash the potatoes, and we hope to be 100% self sufficient by 2009. At the same time, we have given our staff a stake in reducing water consumption by measuring the performance of different teams in keeping water use to a minimum. As a result, between 2001 and 2007, water use decreased per kilogram by 42% at Walkers.

We also strive to help put water conservation programs in place around the world. We recently formed a £1.25m partnership with H2O Africa, the charity founded by Matt Damon with the objective of providing on-the-ground clean water projects in Niger, Mali, Senegal and other countries in Africa.

We have also made great strides at Pepsi where we have reduced water consumption by 39% between 2003 and 2007.

Pledge

  • To reduce our water use per kg production by a further 45 % in three years

Making our packaging more sustainable

As one of the UK's largest food and drink manufacturers, reducing our dependency on raw materials for our packaging is a central focus of our drive to become more sustainable.

By redesigning our packaging and using lighter weight materials, we have reduced the amount of plastic used to make a 250ml Tropicana bottle by 18% and we now use 14% less plastic in Walkers multipacks.

We are also investing considerable resources into developing new packaging technologies.

Pledge

  • For all Walkers and Quaker packaging to be renewable, recyclable or degradable within 10 years

Reducing waste

As well as our efforts to reduce packaging levels and boost recycling, we have put considerable effort into reducing the waste from our UK sites.

During 2007, the total waste produced in our UK sites fell by 22.6% and the total waste to landfill by 23.6%. Over 90% of our waste was recycled, amounting to over 30,060 tonnes including more than 700 tonnes of foil and plastic film which was transformed into pallets and park benches.

In addition, we will be donating surplus Tropicana, Copella and PJ Smoothies to breakfast clubs in deprived schools, diverting them from landfill sites.

Pledge

  • To reduce waste to landfill by a further 20 % in 2008 and achieve zero waste to landfill across our total supply chain within 10 years