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Our Sustainability Journey
Overview 2007
Overview
In a world that continues to experience unprecedented economic, environmental and social challenges,
PepsiCo — one of the world’s largest food and beverage companies — recognizes our responsibilities
to help make a difference. In this overview, we share our progress in addressing these challenges,
identify where we believe we can have the most impact and acknowledge our opportunities for
continuous improvement.
Today, we are striving for a balance of achieving continued financial success while bringing purpose
to our performance. We call it “Performance with Purpose” and we have defined three prime areas of
influence: human, environmental and talent sustainability.
> Human Sustainability — refers to our efforts to nourish consumers with a range of products,
from treats to healthy eats.
> Environmental Sustainability — reinforces our commitment to protect our natural resources and
operate in a way that minimizes our environmental footprint. In fact, we have set ourselves the goal
of making our environmental impact net-neutral.
> Talent Sustainability — focuses on developing our employees in a diverse and inclusive
environment and making sure our company is an attractive destination for the world’s best talent.
During this journey, we’re shifting towards developing and enhancing metrics to more meaningfully
reflect PepsiCo’s global performance. While this will take time, we believe this will bring sharper focus
to achieving demonstrable progress and to integrating sustainability goals more fully into our business
operations. The talents and skills of our global workforce, coupled with our operational capabilities,
provide our company with a unique opportunity to have a positive impact on society. Time and again,
our people demonstrate they are committed to making a difference and to living PepsiCo’s Sustainability
Vision. Our vision is to continually improve all aspects of the world in which we operate — environment,
social, economic — creating a better tomorrow than today. We have communicated this vision to our
185,000 employees worldwide in 45 different languages as part of our goal to bring greater good to the
world. It’s a responsibility every associate at PepsiCo takes seriously.
This report covers full year 2007 through May 2008.
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Significant Achievements
Committed more
than $16 million to
bring safe water to
developing countries
Expanded our portfolio
of healthful products
through innovation
Improved significantly
our water, fuels, and
electricity efficiency
Instituted guidelines
for beverages limiting
advertising and
marketing to children
under 12
Conserved nearly
5 billion liters of water
Launched our
global sustainable
packaging policy
and nearly 500 million
kilowatt hours of
energy worldwide
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Sustainability Q & A
with Indra Nooyi, PepsiCo Chairman and CEO
Indra K. Nooyi
Chairman and Chief Executive Officer
What does sustainability mean
at PepsiCo?
We define sustainability as
“Performance with Purpose.” In
today’s world, consumers are bringing
their principles to their purchasing.
We, in return, are bringing a purpose
to our performance.
There are three specific components
to Performance with Purpose. First,
we offer foods and beverages that
responsibly provide nourishment to
people and societies. Second, we are
intent on minimizing our impact on
the environment in which we operate.
And third, we work hard to create an
inclusive environment where the best
people want to work.
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How does the
Performance with Purpose
mission tie in with your business?
Performance with Purpose is at the
foundation of every aspect of our
business. Indeed, financial achievement
can and must go hand-in-hand with
sustainability.
Our approach to creating superior
financial performance is straightforward
— drive shareholder value. We integrate
a commitment to human, environmental and talent sustainability into all of
our operations.
Doing so creates a blueprint for
PepsiCo to develop, manufacture and
sell our products in a sustainable way,
and gives us a competitive advantage
in markets all over the world, which in
turn drives long-term growth.
How is PepsiCo responding to
these difficult economic times?
There’s no question that these are
challenging times. Like many
companies, we’re facing headwinds
such as rising costs, an uncertain
economic outlook and shifting
currency rates. While we can’t control
the macroeconomic system, we need
to adapt to the near-term challenges
to deliver our long-term growth plans.
We’re taking measured steps to
continue generating long-term
shareholder value. First, we’re
focusing on consumer value as much
as innovation and premium products.
Second, we’re calibrating consumer
price points and packaging options to
keep our products in proportion with
the rest of the food basket and to
keep pace with changing consumer
preferences and wallet constraints.
And finally, we’re investing where we
believe we have the greatest leverage
to maintain and ultimately accelerate
our growth.
Is PepsiCo doing enough to
tackle consumer health
concerns like obesity?
Obesity impacts quality of life and
poses a serious health risk. More than
one billion adults are overweight and
300 million are clinically obese — in
both developed and developing
countries.
We recognize our responsibility to
address diet and nutrition concerns
around the globe. We’re mindful
of the way the world is changing
and we’re listening to experts who
provide deep insights and enabling
solutions.
As a result, we’ve made steady
progress transforming our portfolio,
for example, by introducing new
products that offer improved nutrition. We’re reducing portion sizes and
reformulating some of our existing
products to reduce fat, saturated fat,
salt and sugar. We are also adding
more whole grains, fiber, fruits and
vegetables and vitamins and minerals
to our products.
We agree with the World Health Organization, the National Institutes of
Health and other leading experts that
the ultimate solution to obesity is energy balance — the balance between
calories consumed and calories
burned through activity. We’re
committed to supporting both sides
of this energy balance equation.
Water is a key ingredient in
many PepsiCo products. How
is the company addressing the
water scarcity issue?
How can the food and beverage
industry make the biggest
difference in terms of addressing
environmental sustainability?
We’re working hard to reduce the
amount of water we use to make our
products. We’re also promoting access to clean water around the world
through alliances with non-profit
groups and working with agricultural suppliers to assist them with
efficiency improvements.
PepsiCo has focused on three
environmental areas that are critical
to the industry: water, energy and
packaging.
Our efforts are focused where our
assets and expertise can make the biggest impact. One such area is farming.
On average, agriculture accounts for
70 percent of all fresh water use in the
world and as much as 95 percent in
many developing countries — almost
all goes to irrigating crops. Changing the way that farmers use water in
some of the fastest growing economies will help address water scarcity.
In India, for example, PepsiCo is working with farmers to save approximately
30 percent of the water they typically
use for growing rice. We’ve introduced
a unique form of direct seeding and
paddy cultivation. In China, PepsiCo
developed a low water use way to
grow potatoes under desert conditions by using a pivot irrigation
system. In all markets — but especially
those that are growing rapidly —
applying innovation and developing
new methods for conserving water is
vital to our business.
We’re continually looking for ways to
bring to scale the good ideas being
implemented across our business
and we share this experience with
our peers.
Our goal is continuous improvement,
driven by the ingenuity of our people,
best practices, technology, education,
and innovation. We’ve always been an
environmentally concerned company.
In recent years, we’ve stepped up our
initiatives. Now that we have common
environmental metrics across all
PepsiCo divisions globally, we can
better track, manage and understand
our environmental footprint. I’m certain
this will lead to continuous progress.
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Human Sustainability
Our Goal
Our goal is to offer consumers a range of products, from treats to healthy eats. We are
proud to give consumers choices across the spectrum. We’re committed to playing a
responsible role in health and wellness by encouraging people to adopt healthy, active
lifestyles — beginning with the products we offer.
We have world-class scientists who are singularly focused on science-based nutrition
standards and guidance as they develop food and beverage products. Our state-of-the-art
research and development facilities ensure that we’re leveraging the talent and skills of
our employees and operational capabilities.
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We continue to make great strides in
transforming our portfolio of products
to meet consumers’ needs by:
»» Introducing new food and beverage
products that offer nutrition benefits;
»» Reformulating some of our existing
products to reduce nutrients of concern
including fat, saturated fat, sodium and
added sugars; and,
»» A
dding whole grains, fiber, fruit, vegetables, key
vitamins and minerals.
We believe it is our responsibility to understand the
diet and nutrition concerns of populations around
the globe. We recognize our role in reducing the risk
of chronic diseases associated with poor diets. This
includes heart disease, diabetes and obesity. While
there’s an ongoing debate about different responses
to obesity, a key solution to maintaining a healthy
weight is energy balance — the balance between
calories consumed and calories burned through
activity. We believe the way we can make a
difference is by addressing both sides of the energy
balance equation.
On the calories burned side of the equation, we’re
actively leading and engaged in key private-public
partnerships to increase understanding of nutrition
and health, encourage responsible marketing
practices and support programs that motivate people
to adopt healthier, more active lifestyles.
By addressing both calories consumed and calories
burned, we believe we can help consumers make
smart choices and live healthier lives.
On the calories consumed side of the equation,
we’re striving to make smart choices easier for consumers by providing a wide variety of healthful food
and beverage products with easy-to-understand
nutrition labeling.
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Expanding PepsiCo’s Global R&D Network
We’re expanding our global research and development
capability under the leadership of a world-leading
endocrinologist and other experts in science, nutrition
and health policy. This leadership brings a new level of
expertise and focus to our efforts to develop products
that meet the cultural taste and food preferences of consumers while providing nutrition and functional benefits.
With increased research capability and investment,
the global R&D team is establishing priorities and
standards of practice for longer-term research,
nutrition, food safety, regulatory, and health policy.
Today, there are eight regional research centers
worldwide focused on leveraging nutrition science,
knowledge, and insight to develop convenience foods
and beverages that can improve the overall diet and
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positively impact health. Three centers are located in
the United States in Valhalla, New York; Plano, Texas
and Barrington, Illinois. Other centers are in Leicester,
United Kingdom; Monterrey and Mexico City, Mexico;
Shanghai, China and New Delhi, India.
In addition, we’re broadening our innovation efforts
through the formation of a variety of new research
partnerships with leading universities and other institutions including Yale University, Newcastle University,
Dresden University, Westfalische Wilhelms-Universitat
Munster, Monell Chemical Senses Center, University of
Texas and The New York Academy of Sciences, among
others. There is ongoing collaboration with these organizations to further drive our portfolio transformation.
Transforming Our Portfolio
We’re launching new products that
reflect consumer demand and address public health needs for great
taste and greater benefits — foods
and beverages that make it more
enjoyable to lead healthy lives.
Simply put, we’re changing because
our consumers are changing and
because the health of the world’s
growing populations demands it.
Healthier eating is good for business and good for the well-being
of our consumers.
Innovating Approaches
and New Products
Our pipeline of innovation includes
a stream of new products that offer
culturally relevant taste and preference with nutrition benefits that
can complement a meal or provide
a more healthy snack choice. Here
are some examples:
»» In Mexico, our
Gamesa-Quaker
business launched
a line of portion
controlled, oat-based
cookies and snacks.
»» In Brazil, we expanded our baked
snacks. We introduced low-fat bread
snacks in Chile, Puerto Rico, Spain,
Turkey, Saudi Arabia and Russia.
»» In the United Kingdom, our Walkers business developed SunBites,
a whole grain snack with 30 percent less fat than standard crisps.
»» In the United States, Frito-Lay
unveiled Flat Earth fruit and
vegetable crisps that deliver a
one-half serving of fruit or vegetable per ounce and we created
True North, all natural nut snacks.
»» In India, we launched Quaker
Oats Kesar and Cheetos Whoosh,
made from whole grains and
vegetables.
»» PepsiCo and the Whole Earth
Sweetener Company introduced
a zero-calorie, all-natural sweetener derived from the stevia
plant. It’s called PureVia and it
was introduced in Peru as a new,
nutritionally enhanced PepsiCo
beverage called “SoBe Life.”
Innovation in Emerging Markets
In 2008, Lay’s Andinas potato chips were launched in Peru. Andinas are
made of 100 percent native Peruvian potatoes, which have 10 times
more antioxidants than a regular potato, contain no added salt and have
reduced saturated fat content.
This new product will benefit more than 6,000 potato farmers by involving
them in a special program that will provide a 25 percent premium over
the market price for supplying top quality potatoes to PepsiCo.
Additionally, growers will be offered training, including farming technical
assistance, which will enable them to preserve the legacy of their crops.
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Reformulating Existing
Products
Our commitment to improve our
portfolio’s nutritional profile is
further demonstrated by the
reformulation of some of our
existing products.
Our product reformulations include
removing trans fats, moving to
healthier oils, developing and using
sugar substitutes, adding whole
grains, and reducing added sugars,
among others. Some specific
examples include:
»» In India, we’re using rice bran oil
instead of palmoline oil, reducing
saturated fats by 40 percent.
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»» In the United States, Tropicana
orange juice varieties include
added potassium, omega-3 fatty
acids and Vitamin D.
»» In the United Kingdom and Europe, we’ve introduced Baked Lay’s
and Baked Walkers with 70 percent
less total fat than regular crisps.
»» In the United States and the
United Kingdom, we reduced
by between 50 percent and 80
percent the saturated fat in our
Frito-Lay potato chip and Walkers
crisp brands by converting to
high oleic sunflower oil.
Expanding through
Strategic Acquisitions
Key acquisitions have helped us
expand our offering of more
healthful products. The focus on
more nutritious offerings started
with the acquisition of Tropicana
in 1998 and the 2001 merger with
Quaker Oats, including Gatorade.
Most recently, PepsiCo has acquired
or purchased a major stake in
JSC Lebedyansky, Russia’s leading
branded juice company and the
world’s sixth-largest juice manufacturer; Sandora, a leading juice
company in Ukraine; Naked Juice, a
premium juice company in the United
States, and V Water, a leading vitamin
water, in the United Kingdom.
Promoting Active,
Healthy Lifestyles
Helping Consumers
Make Better Choices with
Nutrition Labeling
We support programs that use
simple steps to encourage people
to get active:
In Latin America, we launched Vive
Saludable Escuelas, an initiative to
teach children how to add physical
activity to their daily lives. A physical education routine, designed by
Mexico’s Sports Commission, is being
implemented by teachers in participating schools. To date, the program
has touched more than one million
children in 4,000 schools.
In India, our “Get Active” pilot
program reaches 70,000 students
in 120 schools and promotes an
We care about the health of
consumers. We want them to enjoy
our products and we want to help
them make the healthful food choice
the easier choice.
active lifestyle through an energy
balance curriculum.
In the United States, we are
collaborating with the YMCA, the
largest provider of fitness programs,
to support Activate America, a
public health initiative that helps
make healthy living a reality for
millions of Americans.
A key way we do this is through our
own nutrition labeling. In the United
States, we were the first in the industry to introduce a symbol that makes
it easier for consumers to identify
which of our products contribute
to a healthier lifestyle. Our Smart
Spot symbol — the symbol of Smart
Choices Made Easy — is a simple
labeling system that explains why
each product is a smart choice.
PepsiCo Global Nutrition Team
Reaches Out to Community
The PepsiCo Global Nutrition Team demonstrated its commitment to nutrition
education by reaching out to residents of St. Luke’s Lifeworks, a non-profit
organization that provides learning opportunities and support services to people
overcoming homelessness in Fairfield County, CT.
In partnership with Yale University, and a team of PepsiCo senior executives, the nutrition team
presented an interactive lesson on how to make smart food choices on a limited budget.
Our nutritionists explained the benefit of eating a healthy diet, shared a list of a broad
range of healthy foods and showed how to read a food label to make smart choices. The
residents then created their own grocery lists, visited a local grocery store and purchased
a week’s worth of food within their budgets that provided a balanced diet.
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“
The burden of malnutrition can only be dealt with if the public
and private sector including the food industry work together
towards this objective. The future of humankind is being
shaped by what we do or fail to do today, it is up to those in
positions of leadership to show the way forward.
Professor Ricardo Uauy
President of the IUNS (International Union of Nutrition Sciences)
Making Choices Easier
PepsiCo is also a founding member
of the Keystone Food and Nutrition
Roundtable, a multi-stakeholder
group that seeks to drive improvements in the American diet. The
Keystone Roundtable is a consensus
forum of industry, academia, the
public health community and government, working collaboratively
to create an easy-to-understand
and uniform front-of-pack nutrition
labeling program to help consumers make healthier choices among
all packaged food and beverages.
In Europe, we introduced front-ofpack nutritional labeling across our
brands in partnership with other
food and beverage companies. The
labels help consumers understand
the percentage of their “Guideline
Daily Amount” (GDA) of calories,
sugars, saturates, fat and salt contained in a portion of food or drink.
10
”
Addressing Malnutrition in
Vulnerable Populations
action continues to be the best way
to address our responsibilities.
We are committed to serving a
wide range of consumer needs,
and in countries where malnutrition is a serious issue, that includes
offering products directly aimed
at addressing chronic hunger. We
are working toward developing
nutrition-based solutions to reduce
hunger and malnutrition in select
developing countries, particularly
in India, South Africa, and in time,
Nigeria. We will leverage our core
competencies including R&D,
product development, marketing,
sales and distribution to launch a
product with the necessary public
and private partnerships to reach
the target population and sustain
its use.
We announced our full support of
the International Council of Beverages Associations’ guidelines on
marketing to children — a landmark
initiative supported by industry. The
guidelines permit no marketing or
advertising of beverages, other than
water, fruit juice and dairy-based
beverages, to children under 12 years
old. These guidelines will be fully
implemented on a global basis by
January 2009. We were also a founding member of a voluntary U.S. food
and beverage industry initiative that
redefined how the industry markets
products to children under 12. Today,
100 percent of our advertising to
children is devoted exclusively to
products that meet defined nutrition criteria or provide a functional
benefit. We have committed to
similar guidelines in Canada, the European Union of 27 nations, Mexico,
Thailand, South Africa, Australia and
New Zealand.
Engaging in Responsible
Marketing and Advertising
We understand the importance of
being a responsible marketer. We
believe that industry-wide voluntary
Partnering for Change
We proactively lead and engage
in private-public partnerships with
key external experts and stakeholders in the global health policy and
science/nutrition communities
to help improve diets and deliver
substantial improvements in our
products. Our leaders actively
participate in global health policy
initiatives including the World
Health Organization, the National
Institutes of Health, Wellcome, the
Pan American Health Organization
and the Alliance for a Healthier
Generation, among others.
We are among eight leading food
and beverage companies to sign
the “Global Commitment to Action
on the Global Strategy on Diet,
Physical Activity and Health,” a
commitment addressed to the
World Health Organization. We
agreed to five key global commitments to action that will take place
over the next five years. We will
report our progress in delivering
these goals at the annual World
Health Assembly meeting.
We also partner with the Global
Alliance for Improved Nutrition
(GAIN), a Swiss foundation that
seeks to fight malnutrition by
mobilizing partners to deliver
improved nutrition to vulnerable
populations.
Leaving a Positive
Footprint on Society
The PepsiCo Foundation
supports health, nutrition and
wellness programs around
the globe with an emphasis
on underserved communities and seeks to discover real
solutions to undernutrition.
Oxford Health Alliance:
The Oxford Health Alliance
is a global organization that
works to reduce the burden
of chronic diseases in the United
Kingdom, Mexico, China and India.
Working with the PepsiCo Foundation, the Community Interventions
for Health program was implemented to reduce chronic disease
by targeting three risk factors: diet,
physical activity level and tobacco
use.
Family Health Self-Empowerment
Project: The University of Florida
and its Family Health Self-Empowerment Project is a multi-year
research and intervention program that investigates approaches
to reduce the incidence of obesity
in low-income and ethnic families.
Healthy Food, Healthy Moves:
Chicago Communities in Schools
and the Consortium to Lower Obesity in Chicago Children (CLOCC)
are collaborating on the Healthy
Food Healthy Moves: Inform Chicago
initiative to test and deliver a health
promotion program in six Chicago
schools. The three-year pilot project
has mobilized a broad network of
community organizations, government officials, educators, public
health professionals, and families in
a citywide effort to raise awareness
of how to achieve healthy lifestyles.
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Environmental Sustainability
Our Goal
At PepsiCo, we are committed to minimizing the impact our business has on the environment
with methods that are socially responsible, scientifically based and economically sound.
Foundationally, we expect compliance with environmental laws and regulations. In places
where, in our judgment, the requirements are not stringent enough, we will apply a higher
standard to drive environmental protection. We will audit our performance against
these expectations to assure we are doing right. After more than a decade of action, we
continue our energy efficiency, water conservation and responsible packaging innovation
initiatives and take accomplishments that are pioneered in one part of our business to
scale throughout our global network.
We continuously improve our environmental programs and explore inventive solutions to
the world’s challenges. We operate in a way that minimizes our environmental footprint
with the goal of reaching a net-neutral impact. We’ve focused our environmental sustainability efforts on water, energy and packaging — areas where we can make the biggest
impact. And we’re extending our outreach to our franchised bottlers and our supply chain,
including our agricultural partners.
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Beverage
Foods
PepsiCo
Resource Conservation Improvements
2006 vs 2007
Beverage
Foods
PepsiCo
PepsiCo
Foods
Beverages
Reductions in water, fuel and electricity use 2006 vs 2007.
2006 baseline (per unit of production)*
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Water
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Electricity
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Fuel
PepsiCo established uniform protocols for energy and
water measurement and reporting in 2005 and rolled
them out for use across all divisions for the first time in
2006. Prior to this, Frito-Lay North America (FLNA) had
been collecting data since 1999. Quaker/ Tropicana/
Gatorade
10% began data collection in 2004. PepsiCo
International
has now collected one full year of data.
10% 9%
9%
8%
2%
1%
0%
1%
0%
This
is the first time year-over-year comparisons are avail8% 7%
able
PepsiCo as a whole. The data collected represents
7% for6%
6% 5%
PepsiCo-owned
manufacturing sites with 100 percent of
5% 4%
usage
at
FLNA
and
Quaker/Tropicana/Gatorade and 90
4% 3%
2%
percent
at
PepsiCo
International.
3%
* Liters for beverages; Kilograms for foods.
Water
Water
In 2007, PepsiCo agreed on
rigorous,
corporation-wide global
Electricity
metrics to help us better track and
understand our environmental
footprint. Our goal is to reduce
water consumption by 20 percent,
reduce electricity consumption 20
percent, and reduce fuel consumption by 25 percent per unit of
production by 2015 as compared
to our 2006 consumption.
We continue toFuel
make positive
Fuel
impact and have achieved significant results. In 2007, our beverage
businesses reduced water consumption by 9 percent, electricity
consumption by 8 percent and fuels consumption by 7 percent. Our
foods businesses reduced water
consumption by 6 percent, electricity consumption by 3 percent and
fuels consumption by 3 percent.
We have environmental scientists
and technical experts who are
knowledgeable of leading edge
scientific research and discoveries
so we can leverage our operational
capabilities to help make a difference.
We have inElectricity
place a global ecoElectricity
efficiency strategy for resource
conservation (RECON) within our
operations that helps us optimize
our water, energy and electricity
use through improved methods
and technologies. We extend this
strategy to our bottlers and copackers through workshops around
the world.
We have formed a series of partnerships with key external stakeholders
to provide us with additional
insights, expertise and knowledge
on multiple aspects of sustainability. We will continue to actively lead
and engage in key private-public
partnerships to spur action and
solutions to address the urgency of
the world’s environmental issues.
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Water
Water is essential for all foods — for
growing, washing, processing and
cooking. It is the primary ingredient in our beverages. Reducing
the amount of water we use is
imperative and we’re committed
to minimizing our water footprint
through greater efficiency across
our operations. Where we source
our water is just as critical since
sourcing from stressed areas causes
damage to local communities and
ecosystems.
Throughout our business, we work
to reduce our water footprint and
help avoid water conflicts with
local communities. At the same
time, we are engaged in improving
access to clean water around the
world through alliances with nonprofit groups.
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Conserving Water in
Our Operations
In 2007, we conserved nearly 5 billion
liters of water across our operations
as compared to 2006 through
technological improvements in our
global manufacturing operations
and resource conservation programs.
In the United Kingdom, our total
water use across all our operations
was 1,564 million liters in 2007. Between 2001 and 2007, we reduced
the water used to manufacture
Walkers Crisps by 42 percent from
13 l/kg of production to 7.6 l/kg.
This was achieved through a
comprehensive analysis of all water
usage and improved measurement
systems.
The Walkers team developed
engineering solutions to reduce
equipment water use and increase
opportunities for recycled water use.
In Mexico, all of our Sabritas manufacturing facilities have secondary
process water treatment systems,
which will allow us to extend water
recycling to more activities while
eliminating the impact of waste
water on the environment.
Frito-Lay, the U.S. snack division
of PepsiCo, continued to improve
its water efficiency by conserving more than 300 million gallons
(1 billion liters) of water in 2007
as compared to 2006 through its
continued water conservation
efforts known as the “Gallon per
Pound Challenge.” Frito-Lay won
recognition from the Environmental Protection Agency as a Water
Efficiency Leader in 2007.
Gatorade Employees as Change Agents
Many water efficiency solutions implemented across our global operations today were first
identified by the conservation team at our Gatorade facility in Atlanta, GA in response to the
August 2007 drought, one of the worst in centuries. Those solutions alone helped the Atlanta
plant conserve nearly 290 million liters of water in 2007 and have led to system-wide water
savings. Since 2004, Gatorade has reduced water usage by 17 percent across its entire manufacturing system through implementing best practices across facilities. Gatorade employees on the
manufacturing line have acted as change agents by helping plants conserve millions of liters of
water. Through employee-led “tag and flag” programs, water savings efficiencies such as leaks on
production lines are immediately addressed.
Gatorade is continuing to implement innovative technologies throughout its plants, including:
> Using dry lube, a process that replaces soapy water with silicone to lubricate bottle lines
> Reclaiming and recycling steam vapor from heating processes
> Cleaning empty bottles through “air-rinsing,” a process that uses ionized air instead of water
Pepsi-Cola bottlers in North America
are also doing their part to conserve
water resources. Pepsi Bottling
Group has installed water recovery
systems on reverse osmosis filters
that conserve more than 1 billion
liters of water annually as compared
to traditional designs.
Water conservation is especially
important in water stressed areas.
In 2003, our India team embarked
on an ambitious journey to achieve
positive water balance by 2009
through a comprehensive program
to conserve and optimize water
usage, both in our own manufacturing processes and in the
communities we serve.
We have carried out a variety of
innovative reuse and recycling
initiatives. In the last five years in
India, we have reduced our water
use in manufacturing by more than
55 percent. We have also prevented
depletion of ground water aquifers
by constructing rainwater harvest-
ing systems in most of our plants.
We’ve supplemented this by
introducing community water
projects in farms and comprehensive
watershed management programs
in diverse and challenging geographic locations. Similar projects
are underway in China, Thailand
and Mexico.
15
Partnering for Change
Reducing Water
Use in Agriculture
While using water
responsibly throughout
our business is a top
priority, we also believe
in our ability to address the broader
problem of water scarcity. In India,
for example, where agriculture accounts for over 80 percent of total
fresh water consumption, PepsiCo
is working with farmers to reduce
water intensity in paddy cultivation by around 30 percent through
direct seeding, a technique that
avoids the traditional flood irrigation method currently practiced by
paddy growers across the country.
Paddy is India’s largest grain crop,
16
and consumes the bulk of fresh
water used in Indian agriculture. In
2007, PepsiCo piloted this program
on 100 acres, and it was scaled up
to cover 1,000 acres in 2008. The
significant impact of this change
can be gauged from the fact that
if only 6,000 acres of paddy cultivation were shifted to direct seeding it
would offset the entire water used
in PepsiCo India’s beverage plants.
PepsiCo Chairman and CEO Indra
Nooyi publicly demonstrated
PepsiCo’s commitment to helping
address the global water crisis by
joining other partners as a signatory to the United Nations CEO Water
Mandate. By signing the CEO Water
Mandate, PepsiCo has committed
to adhere to a holistic approach
to water management in six areas:
direct operations, supply chain and
watershed management, collective
action, public policy, community
engagement and transparency.
“
The Earth Institute and the PepsiCo Foundation are working
together to address water challenges in India, China, Mali
and Brazil. By harnessing good business practices with
cutting-edge science in climate prediction, remote sensing,
hydrology, and agronomy, our project together will help to
develop new business models for sustainable water use.
Jeffrey Sachs
Director, Earth Institute at Columbia University
Leaving a Positive
Footprint on Society
The PepsiCo Foundation’s mission
around the environment is to
advance knowledge and methods
of water resource management
that are sustainable and positively
impact both quantity and quality of
water supply. The Foundation has
committed more than $16 million
to organizations working to bring
safe water to developing countries.
China Women’s Development
Foundation: The PepsiCo Foundation partnered with the China
Women’s Development Foundation
(CWDF) to implement a research,
development and intervention
program designed to expand availability of safe drinking water for
the people of Western and Central
China. The grant is designed to
provide safe drinking water using
a watershed management solutions approach to expand CWDF’s
repertoire of rainwater harvesting
techniques. Ultimately it will help
communities obtain water and
teach them to improve the safety
of their water through treatment.
The Earth Institute: In 2008, The
Earth Institute at Columbia University, one of the world’s premier
institutions dedicated to global
sustainable development, and the
PepsiCo Foundation, entered into
a $6 million three-year partnership.
The program includes a series of
high-impact, community-based activities and practical solutions across
water, agriculture and climate.
”
WaterPartners: The PepsiCo
Foundation made a $4.1 million
grant to WaterPartners to provide
safe drinking water and sanitation
to communities of the greatest
need in India. This grant was the
biggest single contribution to WaterPartner’s WaterCredit Initiative,
an innovative program that uses
microfinance to increase access to
safe water and improve sanitation
for local communities in India.
Safe Water Network: Through
a three-year partnership with Safe
Water Network, the PepsiCo Foundation has pledged $3.5 million to
implement safe water initiatives for
village water systems in Ghana, India,
and Bangladesh, as well as rainwater
harvesting systems in India.
17
reduced electricity consumption by
3 percent and fuels consumption
by 3 percent.
Energy
Climate change may adversely
affect the raw materials and other
supplies we use, including water
and agricultural products. In 2007,
we successfully reduced our use of
fuels and electricity and continued
work to transform our business
model, including identifying opportunities to reduce energy use
in our operations, use renewable
energy, construct green buildings
and work with suppliers to reduce
their energy use.
Reducing Our Energy Use
We have set comprehensive electric and thermal energy reduction
goals across our businesses to
ensure that the energy intensity of
our operations is continuously reduced. During 2007, our beverage
businesses reduced electricity consumption by 8 percent and fuels
consumption by 7 percent per unit
of product. Our foods businesses
18
In the United Kingdom and Ireland,
we reduced the amount of energy
used per pack of Walkers Crisps
production by 32 percent between
2000 and 2007.
We have also focused on the energy efficiency of our vehicle fleet.
For example, Sabritas, our Mexican
snack food business, has 13,000
distribution vehicles, about 6,000
of which were converted over
the past ten years to burn liquid
propane gas. This has reduced
carbon and nitrogen emissions and
generated fuel savings of between
15 and 22 percent (depending on
geographic conditions and fuel costs).
In the U.K. and Ireland, we improved our fleet fuel efficiency
by 12 percent between 2001 and
2006. In 2007, we reduced our
absolute distribution footprint
by 4.3 percent despite shipping
10.3 percent more products. This
was achieved by investing in
vehicle technology, such as putting
lower friction tires on our vehicles,
streamlining the vehicles to reduce
wind resistance, implementing
new journey-planning software,
and conducting a comprehensive
training program for our drivers.
These improvements were combined with in-cab systems that
tracked fuel efficiency on a weekly
basis.
PepsiCo’s commitment to saving
energy through green building
worldwide continued in 2007. Our
new facilities constructed in 2007
were designed to meet the U.S.
Green Building Council’s (USGBC)
Leadership in Energy and Environmental Design (LEED) standards — one of the most rigorous
standards for “green building” in
the world. The USGBC awarded the
prestigious LEED Gold certification
to two of our facilities: Gatorade’s
Wytheville, Virginia manufacturing
facility and Gatorade’s Tolleson,
Arizona distribution center. At the
time, the Wytheville facility was the
largest LEED-Gold certified food
and beverage manufacturing site
in the world.
In May 2008, PepsiCo introduced
the Sustainable Engineering Guidelines based on LEED standards. The
guidelines support our environmental sustainability commitments
throughout our engineering pro-
cess, and apply to all new construction as well as major remodels of
existing buildings globally. The
Sustainable Engineering Guidelines
can be accessed through a website
available to all PepsiCo engineers
and key partners worldwide.
Harnessing Renewable Energy
Across PepsiCo, we are evolving to
the use of more renewable energy
in our operations with several initiatives at our manufacturing plants.
In India, we launched our first
remote wind turbine, harnessing
one of the most efficient, clean
and renewable sources of energy.
This turbine is connected to the
public electricity grid with sufficient power to meet more than 75
percent of the electricity needs of
our Mamandur plant.
Our Tropicana juice manufacturing
plant in Ft. Pierce, Florida continued
its progress toward greenhouse gas
neutrality by using carbon-neutral
landfill gas for a portion of its
operations. In 2007, approximately
10 percent of the facility’s thermal
energy demands were derived
from this renewable source.
Our Frito-Lay plant in Modesto,
California unveiled a solar concentrator field designed to drive the
production of truly “solar powered”
SunChips multigrain snacks. The
5-acre solar concentrator field includes 54,000 square feet of curved
mirrors designed to absorb sunlight. The solar energy captured by
the 192 solar collectors produces
steam that generates nearly three
quarters of the heat used in the
SunChips manufacturing process at
the Modesto plant.
In 2007, we announced plans for
our first-ever “net zero” plant in Casa
Grande, Arizona. With plans to run
almost entirely on renewable fuels
and recycled water, retrofits to this
existing Frito-Lay facility are scheduled to be completed by 2011.
We are also proud of our purchase
of over 1.1 billion kilowatt-hours
of Green-e© certified Renewable
Energy Certificates (RECs) annually
to equal 100 percent of purchased
electricity used by all U.S. facilities.
The U.S. Environmental Protection
Agency estimates the PepsiCo
purchase is the same amount of
electricity needed to power nearly
90,000 American homes annually.
Partnering for Change
We continue to develop external
partnerships focused on strategies to reduce greenhouse gas
emissions. In 2007, PepsiCo joined
the U.S. Environmental Protection Agency’s Climate Leaders, a
voluntary partnership program
that works to develop comprehensive climate change strategies,
including supporting reduction in
greenhouse gases. We are the first
consumer products company to
join with other concerned companies and non-governmental
organizations in the U.S. Climate
Action Partnership to encourage
the federal government to enact
climate legislation.
2007 GHG Emissions Intensity
Greenhouse Gas Emissions
(GHG)/Kg or L Production*
Snack
0.529
Beverage
0.080
*Per unit of production.
Represents 95 percent of
company-owned
manufacturing facilities.
Non-manufacturing facilities
not included.
19
Packaging and Solid Waste
We distribute our products in a
variety of packages, each carefully
designed to deliver convenience
and appeal to our consumers while
protecting the integrity of our
products. Our team of engineers
and packaging suppliers are dedicated to finding preferable designs,
and are working continuously
towards improving our packaging
performance while reducing our
packaging environmental footprint.
Our goal is to design and develop
packaging systems that are environmentally responsible throughout
their entire lifecycle and partner
with leading organizations to
promote sustainable packaging
and recycling practices. We have
launched a global sustainable
packaging policy and formed a
Sustainable Packaging Council, led
by our Procurement and Packaging
R&D organization, to develop a
roadmap that will guide us toward
this goal.
20
Activating Sustainable
Packaging Programs
We follow five principles of
sustainable packaging design:
Reduce: using less material in our
packaging, to conserve natural
resources
Reuse: increasing use of reusable
packaging and increasing the
amount of recycled material in our
packaging
Recycle: designing packaging for
recycling and developing biodegradable and compostable packaging solutions
Remove: eliminating environmentally sensitive materials and
processes from our packaging
Renew: increasing use of renewable
material resources
Reducing and Recycling
Our Waste
At Frito-Lay, route sales employees
return empty cartons from stores
to our plants for reuse or recycling
and delivery boxes are used an
average of six to seven times —
this conserves nearly 5 million
trees a year and keeps more than
25 million kilograms of cardboard
away from landfills. For Frito-Lay’s
North American and International
The average Pepsi bottle
contains 10 percent
recycled plastic — that’s
more than any other
soft drink brand in the
United States.
products, Frito-Lay recycles packaging film waste from our suppliers’
sites for use in other products such
as park benches.
Using Less Material in
Our Packaging
Although beverage containers
are the most recycled consumer
packaging in the United States, and
they are designed for recycling, we
continue to look for ways to reduce
the amount of packaging used for
our products. And we are achieving success. PepsiCo scientists and
packaging specialists have led the
way in reducing packaging materials through cost-effective changes
in design and production, known
in the industry as “light-weighting.”
Light-weighting reduces the
amount of raw materials and
energy used to make our packages
and generates less waste after our
products are enjoyed.
In 2008, we introduced a new,
half-liter bottle for our Aquafina
flavored waters, Lipton Iced Teas,
and Tropicana juice drinks. The
new bottle contains 20 percent
less plastic than the previous bottle
and its label is 10 percent smaller
than before. These innovations are
taking nearly 6 million kilograms of
packaging out of the system each
year and reducing greenhouse gas
emissions by 18,000 metric tonnes
annually. That’s equivalent to taking
3,350 cars off the road for a year.
Across all our U.S. divisions,
initiatives conducted in 2007
to reduce packaging have
resulted in more than 9 million
kilograms of material
reduction across PET bottles
and corrugated materials.
We’ve trimmed the amount of
plastic used in the bottles, caps
and labels of our most popular
Aquafina bottle — the half-liter
(16.9 oz.) bottle — by 35 percent
since 2002. This saves more than 27
million kilograms of plastic a year
and reduces greenhouse emissions
by 78,000 metric tonnes annually.
That’s equivalent to taking 14 thousand cars off the road for a year.
We’re also removing environmentally sensitive materials from the
waste stream. For example, Quaker
Standard Oatmeal has eliminated
the PVC band on the 18 oz. tube
and replaced it with biodegradable
material, eliminating more than
87,000 kilograms of PVC a year.
GREAT AMERICAN
CLEANUP
TM
Partnering for Change
Keep America Beautiful, Inc. (KAB)
is the largest non-profit community
improvement organization in the
United States. Pepsi is a longtime,
national sponsor of KAB’s annual
Great American Cleanup. For the
past three years, Pepsi has brought
together Sam’s Club, KAB and the
Aquafina water brand in a national,
school-based recycling program.
The program collected more than
70 million plastic bottles for recycling
in 2007.
Quaker Standard
Oatmeal has eliminated
the PVC band on the
18 oz. tube and replaced
it with biodegradable
material, eliminating
more than 87,000
kilograms of PVC a year.
21
Supply Chain
Some examples of our Supplier Outreach program in action include:
Extending Resource
Conservation
Working with our supplier community on specific initiatives, PepsiCo
is able to grow and extend our
effective resource conservation
programs. We’re also focused on
setting quantifiable goals for energy,
greenhouse gases (GHG), water,
agriculture and forestry resource
conservation within the extended
supply chain.
Our U.K. and Ireland business is one
of 12 charter members of the Carbon
Disclosure Project’s Supply Chain
Leadership Collaboration (SCLC). This
group aims to dramatically increase
to the thousands the number of its
member-suppliers reporting on climate change mitigation efforts and
adaptation strategies. Our membership demonstrates to our suppliers
how important we feel climate
change is to business decisionmaking along with our desire to
work collaboratively.
We’ve joined other companies and
Greenpeace in a global initiative
called “Refrigerants, Naturally!” Its
goal is to address climate change
and ozone layer depletion caused
by gases in refrigeration equipment
by working with our suppliers to
improve the environmental performance of our coolers and marketing
equipment. More than 99 percent
of our new purchases of refrigerated point-of-sale equipment in the
United States use HFC-free insulation.
Engaging Suppliers: Environmental Sustainability
Citrosuco is a leading supplier of not-from-concentrate orange juice to Tropicana. It is a familyowned company with a Brazilian orange business founded more than 40 years ago. More than
20 percent of its plantation area is set aside as nature reserves. Another equivalent area is
populated with palm trees and other vegetation — retaining rain water and providing natural
wildlife habitats.
The reserve areas exceed the Brazilian environment agencies’ required legal limit. Citrosuco is rolling out new environmental systems on its orange farms, leading to higher efficiencies in pesticide
and fertilizer use by, for example, analyzing the optimum time of day and weather conditions for
applying, which allows them to use less. The company’s juicing facilities are powered by biomass
(sugar cane fiber) and use no fossil fuels. Nutrients such as nitrogen are extracted, composted, and
reused to naturally fertilize nearby farms.
Citrosuco’s truck fleet is currently being upgraded with larger trucks fitted to existing trailers, which
can carry 30 percent more juice with the same number of trips, reducing fuel use. The efficiency of
Citrosuco’s ships has been improved by utilizing deck space to transport specialty goods, such as
large wind-turbine blades and generators.
22
Instituting Our Global
Sustainable Agriculture Policy
We’re currently formalizing our
Global Sustainable Agriculture
Policy, which demonstrates our
thoughtful approach to working across the agricultural supply
chain. We continuously benchmark against our industry peers to
understand best practices and approaches to sustainable agriculture,
including water saving techniques,
waste reuse, soil protection and
chemical use.
PepsiCo has initiated a Sustainable
Water and Nutrition Management
program. This program enables sustainable, environmentally responsible water management of our
potato crops by monitoring irrigation methods. Countries involved
in the project include the United
Kingdom, United States, Mexico,
Australia, Egypt, China, Portugal,
Republic of South Africa, Pakistan
and Turkey.
At Frito-Lay North America, we
have developed methods to wash
potatoes at the farm to reduce or
eliminate the residual soil shipped
to our manufacturing facilities. This
allows the soil to be redistributed
at the farm rather than disposed of
through plant waste water discharge and also reduces diesel fuel
requirements.
Quaker North America has been a
leader for decades in the oat industry, developing new oat varieties
that deliver increased field yields
and improved disease resistance.
Improving field performance
through new oat varieties reduces
fertilizers, fungicide and herbicide
use. Improved oat varieties generate more oats per acre — reducing
the time, energy and resources
required per crop.
In Mexico, our Sabritas Agro Team
has activated “Campo Limpio,”
an outreach initiative to educate
farmers about sustainable agricultural practices in production fields.
The goal is to help farmers reduce
chemical and microbiological
agents in fields and in raw materials. We aim to further increase the
commitment of our growers to the
safe handling of our raw materials,
in particular corn and potatoes,
through a training and certificate
program that focuses on good
agricultural practices.
23
Talent Sustainability
Our Goal
Our people are our greatest strength. Without a broad base of talented people, we can’t
continue to deliver exceptional results. Our goals are to attract, hire, develop and retain
the most talented people. By valuing our employees, supporting their ability to work
effectively together and providing them with the tools they need to succeed, we are ensuring
that PepsiCo is the kind of company where talented people of all backgrounds want to work.
We will continue to foster an inclusive environment, by increasing female and minority
representation in management ranks, engaging employees in health and wellness
programs and creating rewarding job opportunities for people with disabilities.
We will leverage the reach of our employee base and continue to encourage our employees
around the world to participate in community service and inclusion activities, which
are designed not only to positively impact the communities we serve, but to drive our
employees to be leaders in social responsibility.
24
Gamesa-Quaker: Embracing Employees with Disabilities
Our Gamesa-Quaker facility in Monterrey, Mexico was one of the first in the country to introduce a
program for integrating people with disabilities into the workforce. The program was designed to
provide meaningful opportunities and better quality of life for these employees, and to attract an
alternative source of highly committed talent.
This program’s success is the result of an ongoing commitment to changing culture, attitude and
education throughout Gamesa-Quaker’s facilities.
To date, 3 percent of Gamesa-Quaker’s manufacturing operation is made up of employees with different
abilities. These employees are also being integrated into other areas of the business such as sales.
This initiative has been extended across Latin America, where PepsiCo is the largest employer of people
with different abilities; nearly 800 associates currently. The program has also been implemented at our
Sabritas business in the Caribbean and Brazil. The high level of commitment demonstrated by these
employees has boosted productivity and created a differentiated and inclusive work environment.
Expanding Opportunities
through Diversity
and Inclusion
PepsiCo approaches diversity and
inclusion as a fundamental business
priority. Our continued innovation
and growth requires employees
who can understand the needs of
international and diverse markets.
We intend to continually evolve our
culture so that our associates are
recognized for their contributions
and valued for the unique differences they bring to the workplace.
In the United States, our Diversity
and Inclusion Networks promote
a culture where everyone feels
they have an equal opportunity to
contribute and succeed. The groups
include African Americans, Latinos/
Hispanics, Asians, Native Americans,
Women, Gay/Lesbian/Bisexual/
Transgender and EnAble, for individuals with disabilities. In addition
to our core employee resource
groups, we have the Women of
Color Multicultural Alliance and the
White Male Inclusion Group. PepsiCo has a Global Diversity and
Inclusion Governance Council that is
composed of internal and external
thought leaders and is co-chaired
by our Chairman and Chief Diversity
Officer. The Council is focused on
raising the bar on diversity and
inclusion capabilities and creating a
sustainable and differentiated competitive advantage for PepsiCo. Diversity and Inclusion Councils
have been successfully established
in all four continents of our PepsiCo
International business — focusing
on locally relevant diversity and
inclusion strategies and plans, with a
particular focus on women.
Increasing support for women in
the workforce is crucial, especially in
developing countries. Our longterm progress depends on recruiting and retaining women in these
geographies. PepsiCo International
increased the percentage of female
executives from 13 in 2003 to 21 in
2007. Representation of women in
many Muslim countries in PepsiCo’s
Middle East/Africa region improved
from 5 percent in 2004 to 18
percent in 2007. The Female Talent Development program was
launched to focus on work environment changes and recruitment of
women in 2008.
25
Providing a Safe and
Healthy Work Environment
organizations to develop better
workplace wellness solutions.
Partnering for Change
The safety, health and well-being of
our employees around the world
are of utmost importance.
We also have internal programs
such as HealthRoads, PepsiCo’s
employee wellness benefit.
HealthRoads promotes healthier
lifestyles through a combination of
personalized coaching, fitness and
nutrition programs, online tools,
resources, and worksite wellness
initiatives.
Across PepsiCo, we recognize HIV/
AIDS as a uniquely challenging
global health issue that poses a
significant threat to not only our
employees, but to the sustainability
of our business operations worldwide. Since 2002, PepsiCo has been
a member of the Global Business
Coalition on HIV/AIDS, Tuberculosis
and Malaria (GBC), a not-for-profit
group dedicated to fighting HIV/
AIDS and related diseases. PepsiCo
has separate HIV/AIDS workplace
programs in countries where there
is high or rising prevalence and
where we have major operations,
including South Africa, China, India,
Russia, and the United States.
PepsiCo is proud to live by our
Sustainability Vision and we believe
that protecting the health and
safety of our people is a core value.
Occupational injuries and illnesses
are preventable and we aspire to
an incident-free environment. We
implement our health and safety
policy through the worldwide
PepsiCo Environment Health and
Safety framework.
PepsiCo serves as chief partner in
the global program of the World
Health Organization/World Economic Forum “Workplace Wellness
Unit” and is working with both
Engaging Suppliers:
Supplier Diversity
PepsiCo extends its commitment to diversity and
inclusion by providing opportunities for our
business partners and the communities in which we
operate. PepsiCo and its bottler community achieved
2007 spending of approximately $1.13 billion with
U.S. minority-owned and women-owned suppliers,
marking the fifth consecutive year of double-digit
growth in supplier diversity spending.
26
In 2007, HealthRoads was launched
in Asia and in the United Kingdom,
we initiated “Fit for Life,” a program
designed to encourage healthier
lifestyles as well as better work/
life balance for all employees. Vive
Saludable (Live Healthy) is a similar
program in Mexico that promotes
healthy lifestyles among employees
and consumers.
PepsiCo’s Human Rights Workplace
Policy ensures a work environment that is free from all forms of
discrimination where people feel
comfortable and respected. In
2008, we translated this policy into
30 languages and broadly communicated it as part of our Code of
Conduct Training, a leading edge
process that ensures our businesses
are operating in the most ethical
way possible.
Fighting HIV/AIDS
Developing Future Leaders
PepsiCo provides support to programs that offer opportunities for
individuals to gain thought leadership skills and experience.
In 2007, PepsiCo made a $1 million
commitment to help United Negro
College Fund (UNCF) advance its
mission and its work with historically
black colleges and universities. This
gift symbolized PepsiCo’s continued
commitment to UNCF, to close the
“
PepsiCo’s involvement with Sedex enables its supply
chain partners to share in its vision of Performance with
Purpose. By actively encouraging the sharing of information,
PepsiCo will gain transparency within its supply chain and
improve performance.
Tara Norton
General Manager, Sedex
”
gap in providing
equal education and in promoting
diversity and inclusion in the
workplace.
PepsiCo also participated in Fair
and Independent Courts: A Conference on the State of the Judiciary,
at the request of Supreme Court
Justice Sandra Day O’Connor. The
conference goal was to advance the
independence and fairness of the
judiciary, which is important to the
business environment.
Separately, the PepsiCo Foundation made a $100,000 grant to
the Georgetown University Law
Center. Our contribution will help
to implement the projects like the
production of an online tool for high
school students to learn about the
independent courts.
Supplier CSR
Assurance Program
We communicate, educate and
work with our suppliers to improve
corporate social responsibility performance across the supply chain.
In 2007, PepsiCo developed a Supplier Code of Conduct to clarify our
global expectations in the areas of
labor practices, employee health
and safety, environmental management and business integrity.
It has been translated into 18
additional languages, has been
proactively communicated and
is mandatory in all procurement
contracts. Our Supplier Code is
based on the ILO, UNGC and other
benchmark standards.
To further demonstrate our
commitment to sustainability within
our supply chain, PepsiCo joined
the Supplier Ethical Data Exchange
(Sedex).
Sedex is a web-based system that
allows companies to maintain and
share data on labor and environmental standards at their production sites. Sedex members are committed to continuous improvement
of the ethical performance of their
supply chains.
We have also joined in an industrywide initiative called AIM-PROGRESS
along with other manufacturers to
work towards improving working
conditions within our supply chain
communities.
27
“
Whether it’s promoting healthier lifestyles or helping to
close the education achievement gap, PepsiCo has set
the standard for other companies to follow.
Janet Murguia
CEO, National Council of La Raza
Leaving a Positive
Imprint on Society
The PepsiCo Foundation has a long
history of funding diversity programs in education and workforce
development with communitybased organizations in the United
States. The Foundation’s objective
is to foster economic achievement
and mobility for the underserved
and minority populations. Currently, the strategic areas of focus
include access to education and
training, and women’s empowerment programs.
National Council of La Raza:
Together with the National Council
of La Raza (NCLR) in 2001, the
PepsiCo Foundation created the
NCLR Escalera project “Taking Steps
to Success” to close the gap of
Latino high school dropouts. The
program encourages at-risk Latino
high school students to graduate
from high school, prepare for
28
college, and explore career opportunities through internships. The
Foundation’s intent is to co-develop a best practice education
program model that can be
expanded to include all of the
organization’s 300 affiliates. This
program continues to be expanded
and replicated across the nation.
Ascent: Since 2006, The PepsiCo
Foundation has been working in
partnership with Ascent to prepare
and train multicultural women to
build careers in corporate America.
Ascent collaborates with corporate
partners to identify, attract, and
advance women of color. The
partnership is designed to assist
Ascent in firming its business
strategy, training, portfolio
and governance structure, and
to enable Ascent to launch
and develop program curricula.
”
Community Engagement
PepsiCo encourages and supports
its employees in their efforts to
volunteer for community organizations and projects. We sponsor
and participate in a wide variety
of local and national activities
through employee involvement.
During PepsiCo’s 2008 Global Week
of Community Service, more than
1,800 employees around the world
spent time serving their local communities and service organizations.
PepsiCo is one of the world’s largest food and beverage companies with 2007 annual
revenues of more than $39 billion. The Company employs approximately 185,000 people
worldwide, and its products are sold in approximately 200 countries. Its principal businesses
include: Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices
and Quaker foods. The PepsiCo portfolio includes 18 brands that generate $1 billion or
more each in annual retail sales. Outside the U.S., our portfolio also includes a variety of
well-known local brands including Sabritas, Gamesa, Walkers, Matutano, Smith’s, Simba,
Chipsy, Mirinda and 7-Up among others.
2007 Select Recognitions
> PepsiCo was named to the DJSI World and North
America Indexes.
> CRO magazine recognized PepsiCo among the 2007
100 Best Corporate Citizens in the United States.
> Business Ethics magazine named PepsiCo to the
100 Best Corporate Citizens list.
> Seven PepsiCo China bottling plants were
recognized as Best Water-Saving Companies in
China’s beverage industry by the China Beverage
Industry Association.
> The U.S. Environmental Protection Agency (EPA)
recognized PepsiCo as Green Power Partner of
the Year and Energy Star Partner of the Year.
> The Human Rights Campaign named PepsiCo as
one of the Best Places to Work for Gay/Lesbian/
Bisexual/Transgender (GLBT) Equality.
> Working Mother magazine named PepsiCo to its
Best Green Companies for America’s Children list.
> The AIDS Responsibility Project (ARP) presented
PepsiCo with the International Corporate
Courage Award.
> China Rights Forum and China Business News
Group named PepsiCo 2007 Outstanding
Employer of China in the Shanghai Region.
> Catalyst honored PepsiCo with the 2007 Catalyst
Award for its Woman of Color Multicultural Alliance.
> Black Enterprise magazine named PepsiCo as one
of the 40 Best Companies for Diversity.
> The Cause Marketing Forum awarded Sam’s Club/
Aquafina’s “Return the Warmth” program with the
top environmental honor, the Halo Award.
Our Commitment
At PepsiCo, we’re committed to Performance with Purpose — achieving business and financial success
while leaving a positive imprint on society. We want to grow our business by being — and by being
recognized as — a sustainability leader.
Our approach to superior financial performance is straightforward — drive shareholder value. By addressing sustainability issues, we deliver on our purpose agenda. Our performance and our purpose are not
separate — it’s a merger of financial achievement in each of the three elements that together form our
purpose agenda: human, environmental and talent sustainability.
Human Sustainability — Offering our consumers a broad range of products, from treats to healthy
eats — and making it easier for them to make healthful choices.
Environmental Sustainability — Protecting our natural resources and operating in a way that
minimizes our environmental footprint, with the goal of reaching a net-neutral impact.
Talent Sustainability — Developing our employees by creating a diverse and inclusive culture and
making certain our company is an attractive destination for the world’s best people.
This approach encompasses the many challenges that PepsiCo faces: rising obesity rates and the need for
more physical activity, nutritional deficiencies in vulnerable populations in developed and developing
countries, water scarcity and quality, climate change, and the need for responsible packaging. We recognize
the importance of managing risk while overcoming our challenges.
The people behind PepsiCo’s brands are working hard to address these economic, environmental and social
challenges. The talents and skills of our global workforce matched with our operational capabilities of developing,
moving and selling the world’s favorite foods and beverages can effect real world change. While we have made
significant strides on this journey, there is still a lot to learn and do. It is our intent to lead the way.
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PepsiCo Website: www.pepsico.com
© 2008 PepsiCo, Inc.