PepsiCo & Nature Based Solutions to 1.5°C
Embracing the role of forests for a regenerative and sustainable future
As one of the world's leading food and beverage companies, PepsiCo is committed to doing our part to help curb climate change by reducing GHG emissions across our value chain. That’s why in early 2020, we signed the UN’s Business Ambition for 1.5C pledge, joining other leading companies in committing to set science-based emissions-reduction targets, across our entire value chain, aimed at limiting global warming to 1.5°C above pre-industrial levels, while also developing a long-term strategy for achieving net-zero emissions by 2040. We recognize that achieving this ambition will require investing significantly in technologies and initiatives to not only reduce our greenhouse gas emissions but also remove carbon from the environment.
Our participation in 1t.org and our commitment to forest conservation and restoration is an important part of that effort. To help maximize the amount of carbon our world’s forests are able to capture, we’re working with a range of partners, from The Nature Conservancy, which is helping us conserve forests in and around key watersheds in the United States, to a coalition organized by the World Resources Institute to improve the monitoring and traceability of palm oil in Indonesia in order to further advance our commitment to no deforestation.
PepsiCo aims to address systemic issues facing communities and ecosystems in priority landscapes, including deforestation, land and workers’ rights, and economic viability.
For example, in the Aceh Tamiang district of Indonesia we are working with partners to restore 300 hectares of forests. We are also founding and development partners of Rimba Collective, which has 25-year project agreements aimed at protecting and restoring 500,000 hectares of tropical forests while directly benefiting 32,000 local people in forest-frontier communities, strengthening equitable livelihoods and providing a secure source of income. Rimba Collective’s project portfolio will initially focus on Indonesia, before expanding to projects across Southeast Asia.
We are committed to engaging in on-the-ground initiatives with industry, civil society, and others that support the transition to responsible production and play an active role in the wider transformation of the palm oil sector. These include both landscape projects that support conservation, restoration, community development, smallholder inclusion, responsible production practices, and issues-based programs that tackle specific challenges.
Under PepsiCo’s Positive Agriculture ambition to spread the adoption of these practices across 7 million acres, improve the livelihoods of over 250,000 people within our agriculture supply chain and communities, and sustainably sourcing 100% of our key ingredients, we are helping many of the thousands of smallholders we work with to implement our global policy on deforestation free supply chain. Our suppliers commit to No Deforestation, No Peatland Development, No Exploitation of communities, along with No conversion of High Carbon Stock (HCS) forests, and No conversion of High Conservation Value (HCV) Areas. In turn, we are supporting them by investing in capacity-building and conservation programs in collaboration with partners and external stakeholders including governments, civil society, and local communities.
Actions in this pledge
Conserving trees and forest landscapes
- Conservation support activities
- Support the operating costs and activities of existing conservation areas, including advocacy for conservation policy
In Indonesia, PepsiCo is one of seven companies that are working together on a landscape program for sustainable palm oil in the districts of Siak and Pelalawan. The goal of the program is to create sustainable landscapes across both districts, which will produce deforestation-free and exploitation-free palm oil and maintain or enhance key conservation areas. This will build upon existing local efforts and multi-stakeholder platforms to advance a shared vision of sustainable, inclusive palm oil production models. The program has three phases which are:
1) design the intervention,
2) define the partnership, and
3) implement the intervention.
In 2020, the Coalition established a final definition of the partnership and implemented activities within the workplan including support for local communities, engagement of mills, improving traceability, and coordination of deforestation monitoring. Some highlights from 2020 include:
- Support to seven rural communities, including the training of and funding for seven full-time village facilitators to work in local communities, and the completion of participatory mapping in the seven villages which will form the basis of ongoing village support programs;
- Engagement of more than 20 mills on sustainability, and work to collect traceability to village level (at a minimum) for all mills in the project area; and
- Alignment with the government of Pelalawan regarding the coalition’s role in supporting the implementation of the District action plan. This builds on an agreement that was signed between the coalition and the Siak District Government in 2019 to support the Siak government’s plan for sustainable governance of the District, ensuring that the coalition is working in alignment with the government of both districts.
Restoring and growing trees and forest landscapes
- Assisted natural regeneration
- Actions that support natural regeneration without tree planting, such as Farmer Managed Natural Regeneration, forest soil remediation, exotic species control, disease prevention, and wildfire protection
- Activities that establish and manage the integration of trees into agricultural landscapes, silvopastoral systems, farming in forests and along forest margins and tree-crop production
- In collaboration with Lestari Capital, Nestlé, Procter & Gamble and Wilmar, PepsiCo helped to establish the Rimba Collective, which aims to protect and restore over 500,000 ha of tropical forests in Southeast Asia and therefore create a significant private sector-enabled forest conservation initiative.
Our future commitments as set out in our recently updated Palm Oil Strategy include to:
- Deliver against landscape targets in Aceh and Riau in Indonesia and other identified priority landscapes.
- In Mexico, implement the RSPO smallholder Certification to bring 5,000MT ISH to market by 2023 and source 100 percent domestic production of RSPO Mass Balance by 2025.
- Conserve or restore at least 140,000 ha by 2025.
- Continue our support to the development of WRI RADD deforestation monitoring system and ensure its operation and use in Aceh and Riau by the end of 2021.
Restoring & Growing
Enabling activities for trees and forest landscapes
- Sustainable forest management
- Activities that support the stewardship and use of forests (including by local communities and indigenous peoples), to maintain their biological diversity, productivity, and regeneration capacity, as well as their potential to fulfil relevant ecological economic and social functions
- Community mobilisation
- Community mobilisation and engagement activities for conservation, restoration and reforestation, including enabling systems of community governance, etc.
PepsiCo considers sustainability issues, including forest-related issues, an integral part of its business objectives; sustainability topics are integrated into, and not separate from, our business strategy. Our sustainability strategy demonstrates PepsiCo’s commitment to deliver top-tier financial performance while creating sustainable growth and shareholder value. We believe our strategy enables us to continue delivering strong performance while positioning our Company for long-term sustainable growth.
PepsiCo plans to reduce absolute GHG emissions across its direct operations (Scope 1 and 2) by 75% and its indirect value chain (Scope 3) by 40% by 2030 (2015 baseline). In support of our targets, PepsiCo will further scale sustainable agriculture and regenerative practices that help lead to emissions reduction and sequestration, as well as improved soil health and biodiversity, decreased deforestation, and increased productivity for farmers. This includes expanding the Company's global network of Demonstration Farms, which provide localized training and tools to implement sustainable practices and improve livelihoods.
In 2020, PepsiCo made the following progress:
- As part of our Coalition for Sustainable Livelihoods Program in Aceh and North Sumatra, Indonesia, we supported training for 500 smallholders and 93 forest rangers, as well as tree planting of 30,000 seedlings in Aceh Tamiang.
- As one of seven companies in a coalition to develop a landscape program for sustainable palm oil in the districts of Siak and Pelalawan, we supported the establishment of seven village support programs, engaged with over 20 mills on sustainability, and aligned with the Government of Pelalawan on the coalition’s role in supporting the implementation of a district action plan.
- Through the joint work of the PepsiCo Global Foundation and the PepsiCo Mexico Foundation, we laid the groundwork for the 2021 launch of Agrovita, which seeks to enhance access to markets for local growers in Mexico.
- Through our collaboration with Proforest and FEMEXPALMA, we helped two mills in Mexico achieve under the RSPO standard through a capacity building program.
Our ecologically and socially responsible approach
We have set standards for ourselves and our supply chain that match our ambition for a sustainable agricultural supply chain over the long term. In 2015, we publicly announced our goal to sustainably source potatoes, whole corn, oats, oranges, palm oil, and cane sugar for our business by 2020, and other priority crops that we don’t source directly from farmers by 2025. Building upon the progress made, in 2021 we announced a new, impact-driven Positive Agriculture ambition, setting 2030 goals to source crops and ingredients in a way that accelerates regenerative agriculture and strengthens farming communities.
This 2030 agenda includes a specific focus on:
- Spreading the adoption of regenerative farming practices across 7 million acres – approximately equal to 100 percent of the land used around the world to grow key crops and ingredients for the company’s products. These efforts are estimated to lead to a net-reduction of at least 3 million tons of greenhouse gas (GHG) emissions by 2030. Furthering nearly a decade of progress with its Sustainable Farming Program (SFP), PepsiCo will continue to collaborate with farmers across 60 countries to adopt practices that build resilience and improve and restore ecosystems. Through efforts with industry-leading partners, the company will expand regenerative agriculture programs to more than 500,000 acres of U.S. farmland by the end of 2021.
- Improving the livelihoods of more than 250,000 people in its agricultural supply chain and communities, including economically empowering women. PepsiCo will focus its work on the most vulnerable farming communities linked to its global value chain, including smallholder farmers and farm workers, women and minority farmers. The company will continue to advance this goal through diverse partnerships, including U.S. Agency for International Development, Inter-American Development Bank, CARE, National FFA Organization, and the National Black Growers Council.
- Sustainably sourcing 100 percent of key ingredients, expanding to include not only its grower-sourced crops (potatoes, whole corn, oats, and oranges), but also key crops from third parties, such as vegetable oils and grains.
PepsiCo will continue to advance these goals through diverse partnerships and stakeholder expertise on the ground to inform and accurately measure the results of our engagements.
PepsiCo depends on significant volumes of safe, high quality, and affordable agricultural raw materials to meet business demands as well as the expectations of key stakeholders. These expectations include demonstrating respect for land rights throughout our value chain.
Through our Sustainable Farming Program (SFP), we champion and advance positive social, environmental, and economic outcomes among the farmers from which we directly source crops. The SFP is designed to help boost agricultural productivity and extend availability of sustainably-sourced crops today, while contributing to long-term transformation across the agricultural system.
Through partnership and collaboration with suppliers, industry groups, and NGOs, we leverage two models to make progress toward our goal — verified volumes and continuous improvement.
PepsiCo is committed to sustainably sourcing 100 percent of the palm oil and cane sugar for our business by 2020 and this commitment will continue, going forward. These ingredients have long and complex supply chains, with farmers operating in challenging conditions. While these crops provide many benefits to people who enjoy our products, to growers and local communities, they are also sometimes associated with social and environmental challenges, such as deforestation, tenuous land rights, and labor issues.
Our approach for high-risk commodities such as these is based on:
- Building traceability through our supply chain to the mill and farm level;
- Assessing risk to our business, to people, and the planet in order to focus our efforts;
- Verifying compliance through credible third- party standards (primarily the Roundtable on Sustainable Palm Oil (RSPO) and Bonsucro sugar cane standards);
- Engaging suppliers to build the capacity of our direct suppliers and those further down the supply chain;
- Investing and supporting on-the-ground projects to ensure farmers, including smallholders and communities, benefit from our actions; and
- Partnering and collaborating with peer companies, suppliers, civil society, and others to address long-term, systemic issues that cannot be tackled alone.
Our results tracking
Biodiversity, soil health
Community involvement, Improved livelihoods, jobs, economic community benefits
The Nature Conservancy, IDH and Verified Sourcing Area, Leuser Conservation Forum, Aceh Tamiang Farmers and Fishermen Group Association (KTNA), Forest Management Unit (KPH) Region III Aceh, Oxfam, Proforest, conservation International, WWF, Walton Family Foundation, National Fish and Wildlife Foundation, Upper South Platte Partnership, Wells Fargo Foundation, MillerCoors, Denver Water, U.S. Forest Service, Colorado State Forest Service, American Forest Foundation, Coalition for the Upper South Platte, Jefferson Conservation District, and the Colorado Forest Restoration Institute, Clean Water Management Trust Fund, Ecosystem Enhancement Grant, Bat Conservation International, City of San Antonio, Bexar County, Department of Defense – Camp Bullis, Edwards Aquifer Authority, San Antonio Water System, and Private Individuals, IDH, Rimba Collective
We are working at locations across Canada, Indonesia, Mexico, and United States of America (USA).
We are also working across other geographies.