PepsiCo & Unilever Lead Scope 3 Emission Reduction Standards

The Consumer Goods Forum (CGF) Net Zero Coalition, which includes 26 leading companies including PepsiCo, Unilever and Ahold Delhaize, has introduced ambitious new standards targeting Scope 3 emissions.

These emissions, which account for the majority of the carbon footprint in supply chains, pose the most significant challenge to companies striving to reduce their environmental impact.

This initiative, announced during COP29, establishes clear guidelines for suppliers that generate 60–80% of a company's Scope 3 emissions. With collective action and cooperation across the supply chain, the coalition aims to transform the consumer goods industry’s approach to sustainability.

Understanding Scope 3 emissions is key to grasping the coalition’s goals. Emissions are categorised into three scopes:

• Scope 1 refers to direct emissions, such as those produced by a company’s machinery or vehicles.
• Scope 2 includes indirect emissions from purchased energy, like the electricity used in operations.
• Scope 3, the most complex, covers all other emissions along the supply chain.

The CGF's new standards focus on the suppliers responsible for a significant share of Scope 3 emissions, aiming to push them toward sustainable practices.

This holistic view extends responsibility beyond individual companies, fostering accountability throughout the supply chain.

Uniting for a sustainable supply chain

The coalition’s members—household names like Mondelez, L'Oréal, General Mills and Danone—have pledged to adopt the new framework. The move exposes the urgency of reducing emissions in a sector increasingly scrutinised by consumers and regulators alike.

Grant Sprick, Vice President of Climate and Environment at Ahold Delhaize, highlights the importance of the initiative: “By introducing these new targets, we are establishing a much-needed suite of supplier expectations that will help address Scope 1, 2 and 3 emissions across the supply chain.

"This is a critical step toward making the supply chain more resilient.”

The framework’s flexibility is a standout feature, enabling companies to tailor their approaches to sustainability while adhering to overarching goals.

Archana Jagannathan, Chief Sustainability Officer (CSO) of PepsiCo Europe, explains: “The flexibility of these targets is key. It allows businesses to tailor their approach, making sure that the most relevant sustainability issues are prioritised, while maintaining the momentum to drive sector-wide change.”

Such adaptability is crucial in an industry defined by diverse products and global operations. By providing a clear yet flexible roadmap, the CGF aims to ensure meaningful participation from all coalition members.

Cascading change through supply chains

Reducing emissions in the consumer goods sector involves tackling significant challenges. Regional regulatory disparities, technological constraints and financial requirements have traditionally hindered progress.

The CGF’s initiative aims to address these barriers by promoting consistent standards that ripple through supply chains.

“By working together and setting consistent expectations for suppliers, we can create meaningful, long-term change across our industry," adds Rebecca Marmot, CSO of Unilever.

"These targets demonstrate our collective commitment to reducing environmental impacts at scale, helping to secure a more sustainable future for all.”

The coalition envisions a domino effect, where suppliers adopt sustainable practices and pass these expectations further down the chain. This approach aligns with the CGF’s role as a United Nations (UN) Race to Zero Accelerator, supporting global efforts to limit warming to 1.5°C under the Paris Agreement.

Building momentum for future action

While these targets represent significant progress, they are seen as a starting point rather than a final solution. The CGF aims to inspire broader adoption across the industry, encouraging companies at all levels to pursue sustainability.

“For many companies, this will be an initial step in their supplier sustainability journey,” Marmot adds. “We hope that it encourages progressive steps going forward.”

As the consumer goods sector evolves to meet the challenges of climate change, initiatives like the CGF’s Net Zero Coalition highlight the power of collective action. By setting shared standards, these industry leaders aim to transform supply chain practices, fostering resilience and sustainability at scale.

“This is a critical step toward making the supply chain more resilient,” says Sprick, capturing the essence of this bold and collaborative effort.

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