PepsiCo’s Strategy to Reduce Scope 3 Emissions

PepsiCo, a global leader in the food, snack, and beverage industry since its founding in 1965, is committed to achieving net-zero emissions by 2040.

The company has already transitioned to 100% renewable electricity in its U.S. operations and is focused on sustainability goals, including sourcing all key ingredients sustainably and reducing plastic pollution.

Through its pep+ (PepsiCo Positive) strategy, PepsiCo aims to influence regenerative farming practices across seven million acres by 2030 and improve the livelihoods of over 250,000 people in its agricultural supply chain.

Roberta Barbieri, PepsiCo’s Vice President of Global Sustainability, shares how the company addresses Scope 3 emissions, the indirect emissions that occur throughout a company’s value chain.

How is PepsiCo engaging its value chain partners to drive progress in reducing Scope 3 emissions?

Like many large global organisations, reducing Scope 3 emissions is the biggest challenge we face in advancing progress toward our 2040 net-zero goal.

We work with our value chain partners — including suppliers, contract manufacturers, franchise bottlers and customers – to help them improve the sustainability of their operations. 

How is PepsiCo addressing Scope 3 emissions?

We believe there are three fundamental elements – expectations, economics and enablement – that are needed to have successful value chain-partner engagement and action.

Expectations: Setting clear and consistent expectations with our supply chain partners on things like science-based targets and reporting requirements helps lay the foundation for successful collective action.

Economics: With the scale and reach of our value chain, we have an opportunity to remove barriers to pursuing decarbonisation for our suppliers.
We’ve accelerated the adoption of renewable electricity in our value chain through pep+ REnew by helping value chain partners access renewable electricity choices. 

Enablement: PepsiCo has a long history of working with stakeholders to advance shared sustainability goals. Last year, we introduced the global platform pep+ Partners for Tomorrow – Sustainability Action Center to provide a suite of resources to these partners. 

Explain PepsiCo’s efforts to engage vendors across your supply chain – from farmers to packaging suppliers and beyond – in reducing emissions?

Given the indirect nature of Scope 3 emissions, quantifying and managing them requires strategic partnerships and engagement with our value chain partners to make progress. 

For example, we collaborate with our farmers and other supply chain partners to scale regenerative agriculture practices as we aim to reduce carbon emissions. 

We also work with stakeholders to address the global systemic transformations needed to create a more circular economy for packaging.
For example, PepsiCo is a member of the Business Coalition for a Global Plastics Treaty. Through the coalition, we advocate for an ambitious UN global agreement to end plastic pollution. 

What are the key programmes across PepsiCo’s global operations to reduce Scope 3 emissions?

Key examples of our programmes intended to remove barriers to pursuing decarbonisation for our suppliers include incentivising tier 1 suppliers through our joint supplier financing program with Citi.

The programme offers key PepsiCo suppliers a lower rate on supplier financing if they reach certain ESG targets, such as optimising the management of environmental resources and meeting thresholds on sustainable sourcing. After launching in Brazil in 2022, we’re looking to expand the programme.

Additionally, our recent partnership with Yara, a leading crop nutrition company in Europe, is aimed at providing farmers with crop nutrition programmes to help decarbonise the food value chain.

We also equip our tier 1 suppliers in the APAC region with the skills and knowledge required to access clean energy through the Clean Energy Procurement Academy.

This is an initiative launched alongside other global companies and the Clean Energy Buyers Association that is designed to accelerate the integration of clean energy into global supply chains.

It aims to spur renewable energy policy change where renewable power has historically been more challenging to source.

What is the importance of ‘systems thinking’ and ‘collective action’, and how has that informed PepsiCo’s engagement with your value chain?

PepsiCo’s sustainability framework, pep+, prioritises this kind of transformation, placing sustainability at the centre of how we will create growth and value by operating within planetary boundaries and inspiring positive change for the planet and people.

While PepsiCo aims to do more, we believe the key to achieve a more sustainable and resilient future is through systemic change fuelled by close partnerships and supported by thoughtful investment and innovation.

Receive the next edition of Scope 3 Magazine by signing up for its newsletter. 

As part of this portfolio, make sure you check out Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE.

Also check out our Sister Brand, Sustainability Magazine and sign up to its global conference series - Sustainability LIVE.

Scope 3 Magazine is a BizClik brand.