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PepsiCo says it will reach net-zero emissions by 2040

In two decades, the giant food and beverage company plans a major shift to renewables and changes throughout its supply chain.

PepsiCo says it will reach net-zero emissions by 2040
[Photo: courtesy PepsiCo]
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As one of the largest food and beverage companies in the world, PepsiCo has a correspondingly massive carbon footprint—it generated 57 million metric tons in 2019. But by 2040, 10 years ahead of what’s necessary to meet the goals of the Paris climate agreement, it plans to reach net-zero emissions.

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“As a company, as an industry, the need for urgent, transparent action is so, so critical for us,” says Jim Andrew, chief sustainability officer at PepsiCo. The corporation previously aimed for net zero by 2050 but decided to accelerate action as it saw the impacts of climate change, from hurricanes to wildfires, continue to grow. The company worked with the Science Based Targets Initiative to set a goal that’s in line with limiting global warming to 1.5 degrees Celsius, the most ambitious target in the Paris Agreement.

[Photo: courtesy PepsiCo]
By 2030, the company plans to cut emissions under its direct control—such as its offices, factories, and deliveries—by 75%, and to cut emissions in its supply chain by 40%. Setting a goal for the end of the decade was important, says Andrew. “We think that to build trust, you need to put some stakes in the ground that you can actually hold yourself accountable to, and that others can too. And that they’re within a relevant timeframe.”

As it works to shrink its direct emissions, PepsiCo will shift to using renewable energy; this has already happened in its U.S. operations, and by the end of 2021, it will have happened in a total of 15 of the 200 countries where it works. It’s moving to new zero-emissions and near-zero emissions technology at plants such as a Frito-Lay facility in California, which will use equipment like electric forklifts charged with on-site solar power. It’s working to reduce plastic packaging and testing new refill models that eliminate single-use bottles. A new internal carbon price will be used to choose transportation vendors and for employee travel.

[Photo: courtesy PepsiCo]
Still, the vast majority of the company’s footprint—around 90%—is outside of its direct control. “We’ve got to take aggressive steps across the whole value chain,” Andrew says. It includes the emissions used to make its packaging and third-party transportation emissions. Around a third comes from the farms growing its ingredients. Pepsi is expanding a network of demonstration farms around the world that help train farmers on how to make changes like reducing fertilizer use and adopting new “regenerative” practices that can ultimately help sequester more carbon in the soil. By 2040, Andrew hopes that it will be technically possible to reduce emissions so much that any remaining emissions can be offset through regenerative agriculture in its supply chain; external offsets may not be necessary.

To get there, he says, PepsiCo and its partners will have to move as quickly as possible. “We’ve all got to move now, and we’ve got to do it together,” he says. “We’re past the point where it’s ‘do a little bit less harm.’ It’s really about how businesses—at least, this is our view—can really take a leadership role to restore and to regenerate things.”

About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley, and contributed to the second edition of the bestselling book "Worldchanging: A User's Guide for the 21st Century."

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