Pepsi Sustainability Policies and Practices

Companies are increasingly strategizing as well as devoting resources towards

sustainability and the natural environment. A myriad of factors appears towards driving firms

into investing in practices and organizational cultures that can be termed as corporate

sustainability management, this does include the scientific insights regarding the relationship of

human ecosystems and activities, the economic as well as social demands of the customers,

investors, employees as well activists as to how companies are supposed to approach the natural

environment. This does also entail the public policies which forbid or require business activities

towards ecosystems. The current practices of corporate sustainability management have actually

been infused with ethical dilemmas and questions. Understanding what sustainability entails

enables firms to frame the problems and solutions that will be faced by the individual firms

(Schuler et al., 2017). The focus of this paper will be to critique the sustainability policies and

practices of PepsiCo. More so, the paper will attempt to discuss the issues such as how the firm

is fairing with the eco-efficiency categories in the cradle to cradle as well as how effective the

firm is towards embodying the 5 HBR benchmarks of sustainability.

Pepsi Company enrolled out a global sustainable agenda that was designed towards

fostering continued growth of business in manners that correspond to the changing societal and

consumer needs. The company did this by placing efforts towards the creation of a healthier

relationship among people and food and this did include specific 2025 goals that will continue

towards transforming the companys food and beverage products portfolio and hence contribute

towards a more sustainable global food system and thereafter make the local communities into

being more prosperous. The company in its annual report of 2009 made a firm promise of

protecting the natural resources of earth through innovation as well as having a more efficient
use of energy, land, water and packaging within the operations of the firm. The subsequent goals

that followed did set forth an improvement of their water use efficiency up to 20% per unit of

production by the year 2015 as well as improving their electricity usage efficiency by up to 20%

in the units of production by 2015. They also promised towards reducing the greenhouse gas

intensity in the U.S operations by up to 25% (PepsiCo, 2017).

In its HBR 5 stages, the company has largely three sustainability projects. Human

sustainability, environmental sustainability and talent sustainability. Human sustainability entails

the company continually transforming the products so as to meet the needs of the customers.

This they do so by applying several approaches. The first approach is product responsibility

whereby the company considers the wellness and safety of individuals by moving towards a

more nutritious end of spectrum of food products. The company does have quality and safety

programs which ensure that they are able to produce the safest and highest quality as well as best

tasting foods and beverages in all parts of the world. This they do by developing as well as

maintaining robust food programs that ensure safety in each and every package by following the

companys procedures that are designed to ensure the highest quality standards are met.

The position of the company in its eco-efficiency eco-effective category relative to its

environmental sustainability policies and practices entails a wide area of solutions that the

company has offered towards environmental sustainability. The company has done this by

focusing its environmental sustainability efforts towards energy, water as well as packaging and

solid waste areas. These areas are known to play a huge impact and focusing on them enable the

company to achieve its policies and practices in an effective manner. The key elements that are

thus emphasized in environmental sustainability include; reducing of water usage by conserving,

reusing and replenishing, reducing of greenhouse emissions by energy conservation as well as

usage of clean energy sources, reducing, recycling as well as reusing of package solid waste

(PepsiCo, 2017). The company is committed towards being environmentally responsible by

ensuring its values of ensuring the world is safer, greener and healthy.

The has in order to ensure that it is eco-efficient and eco-effective in the products its

delivering decided to develop 100% green bottles that are made from bio-based raw materials

such as the corn husks, pine bark and switch grass. In doing so the company in its packaging has

ensured that is one that is sustainable for a longer term as well as it is able to minimize the waste

and be able to increase its renewable content.

The company did additionally create the eco-challenge. This is an initiative that was

conceived towards finding the solutions of the challenges PepsiCo identified. They were

environmental education and access to safe water. The company has also identified that in order

to find solutions towards the complex challenges as well as opportunities that are there, there is

then the need of pre-determining the path of engagement that will be directed towards the youth.

By doing so, Pepsi was able to align these activities in accordance with its culture of

performance with purpose thus being able to create a sustained value and environment for the

young individuals.

Among the metrics Pepsi corporation have employed of developing new business models

include the reducing water consumption by 20%, electricity by 20% as well as fuel consumption

by 25% by 2015 were informed by their established protocols of energy and water measurement

in its 2005 report. This led into rolling out the metrics the year 2006. The company has since

then been undertaking yearly data reports that are compared against each other thereafter

implemented towards fitting the metrics in the diverse areas the companies wants to have

reduction in its consumerism (McNall et al., 2011).

 In being eco-efficient, the firm does have an Environmental sustainable leadership team

(ESLT), which entails senior executive offers from all the functions and they ensure that the

environmental impacts are actually considered in all the regions of the business. The ESLT is

mandated towards; creating as well as maintaining of PepsiCos strategy of environmental

sustainability, administering, developing and maintaining PepsiCo policies on the matters of

environmental policy, developing timelines and goals of PepsiCo environmental performance,

assessing the strengths and gaps of performance relative to the aspirations as well as external

benchmarks, providing support to the division in regards to improving the long-term

environmental sustainability performance of PepsiCo, advising and informing the CEO and

chairman, the executive committee as well as Board of Directors in regards to matters of

environmental sustainability. Thus, apart from the above listed functions of ESLT, it is also

mandated towards ensuring there is a uniform system wide metric practices, standards and

policies that have sensible environmental goals and that it is accurate in its reporting towards the

internal and the external shareholders (McNall et al., 2011). All divisions are held responsible

towards implementing their own environmental programs as well conducting activities such as

training associates, monitoring, tracking, improving and correcting the environmental aspects of

the company.

More so, the company in order to achieve the environmental sustainability has placed on

itself pressure towards ensuring the global food supply as well as the ecosystems by ensuring

that the nutritional demands as well as the health issues that face a growing number of the global

population are met. The company has also increased its regulatory and legislative activities in

regards to the critical topics such as climate change and water stewardship ("PepsiCo Global

Sustainable Agriculture Policy", 2014). By being able to tackle these issues, it has enabled them
towards creating new sets of opportunities and challenges in its business hence they have not

only been able to connect the livestock and crop products but as well as being able to support

their product portfolio which has a complex global supply of thousands of independent farmers

and hundreds of service providers into operating mutually.

The company has been able to develop strategies that are able to balance the need of

adapting towards the dynamic agricultural environment by being able to respect as well as

preserve the environments and communities which support their supply chains and the health as

swell as nutrition of the global population that is steadily growing. The companys global

sustainable agriculture policy does complement its performance in regard to the vision and

purpose of the company. This policy plays an essential part in the broader and comprehensive

responsibilities of incorporating the applicable portions towards code of conduct of Pepsi, its

sustainable farming initiative, sustainable packaging policy, environmental health as well as

safety policy, land use policy and lastly the forestry stewardship policy ("PepsiCo Global

Sustainable Agriculture Policy", 2014). The company does aim into having a continued access

towards the key agricultural raw materials that will be necessary into supplying the growing

needs of consumers while being able to respect the communities and environment that are

involved towards producing the raw materials. This they do by recognizing that the challenge lies

in the need of making farming to be more productive while being able to take care of the farm

animals, preserve the natural resources as well as contribute towards the development of

communities and also being able to reduce their environmental impact.

In considering the 5 HBR stages of sustainability, the company has fared well in its 5

stages of sustainability which entail; a) viewing compliance as opportunity, b) making value

chains sustainable such as workplace, operations supply chains and returns, c) designing of
sustainable products and services, d) developing of new business models and lastly e) creating

next practice platforms. This is evidenced from the company being a member as well as partner

with other organizations that are concerned towards achieving global sustainability standards

(Kulkarni, 2017). The company reports annually regarding its overall sustainability through the

global reporting initiative, it being a member of the world economic forum and the world

business council on sustainable development ensures that it is committed towards improving the

society as well as the environment.

The other facet where the company is striving towards ensuring there is sustainability is

in making value chains sustainable through its human sustainability and talent sustainability. In

ensuring there is talent sustainability, the company strives towards attracting the highest and best

caliber associates that will be able to assist them towards achieving the goals they strive by

providing a conducive environment as well as benefits so as to be able to retain them (Kulkarni,

2017). In order to achieve this, the company does have a strong commitment into having

diversity as well as inclusion by employing a competitive benefit and compensation, having

strong safety and health programs including such as the HIV/AIDS program, the shareholder

program does provide stock options towards eligible associates all over the globe and does

encourage them to act as the owners of the company.

In summary, in considering the evaluation of PepsiCo in relation to the 5 HBR items of

rating, the company has a score of 4.5 since it is evident from the discussions above that PepsiCo

has been dedicated towards ensuring the firm is able to maintain and adhere towards

sustainability programs that cover a wide range. The company has exhibited its character of

employing diverse sustainability programs that are aimed towards ensuring it maintains sound

and effective practices and policies regarding to environmental sustainability, human

sustainability and lastly talent sustainability. The fundamental issues of ensuring the environment

is sustainable through the tenets of energy, water and food products have been adhered to by the

company by harnessing its efficiency and effectiveness in using these resources so as to ensure

the natural resources and other resources are used in an effective and efficient manner.

References

PepsiCo Launches 2025 Sustainability Agenda Designed to Meet Changing Consumer and

Societal Needs. (2017). Prnewswire.com. Retrieved 23 April 2017, from

http://www.prnewswire.com/news-releases/pepsico-launches-2025-sustainability-agenda-

designed-to-meet-changing-consumer-and-societal-needs-597279831.html

Kulkarni, P. (2017). Pepsico-Corporate Social Responsibility | Replenishing Water | Waste

Management Programme | PepsiCo India's. Csrworld.net. Retrieved 23 April 2017, from

http://www.csrworld.net/pepsico%E2%80%93corporate-social-responsibility.asp

PepsiCo Global Sustainable Agriculture Policy. (2014).

McNall, S. G., Hershauer, J. C., & Basile, G. (2011). The business of sustainability: Trends,

policies, practices, and stories of success. Santa Barbara, Calif: Praeger.

Schuler, D., Rasche, A., Etzion, D., & Newton, L. (2017, April). Guest Editors

Introduction:Corporate Sustainability Management and Environmental Ethics. Business

Ethics Quarterly. p. 213. doi:10.1017/beq.2016.80.