PepsiCo’s Chief Sustainability Officer Sets New Climate and Water Goals

On May 29, 2025, PepsiCo’s Chief Sustainability Officer, Jim Andrew, announced updated climate and water stewardship targets, aiming for net-zero emissions by 2040 and replenishing 100% of water used in high-risk watersheds by 2030. These goals build on PepsiCo’s pep+ (Positive) strategy, emphasizing sustainability across its value chain. The announcement reflects the company’s response to global climate challenges and stakeholder expectations for corporate responsibility.

PepsiCo, a global leader in food and beverage production, operates in over 200 countries, generating $86 billion in revenue in 2024. Its operations, spanning agriculture, manufacturing, and distribution, have a significant environmental footprint, prompting the company to integrate sustainability into its core strategy. Jim Andrew’s updated targets, announced on May 29, 2025, focus on two pillars: mitigating greenhouse gas (GHG) emissions and enhancing water resilience, aligning with global climate goals to limit warming to 1.5°C.

The climate target commits PepsiCo to net-zero emissions across its value chain by 2040, a decade ahead of the Paris Agreement’s 2050 deadline. This includes reducing Scope 1 and 2 emissions from manufacturing and operations by 75% and Scope 3 emissions from agriculture and supply chains by 40% from a 2015 baseline. Key initiatives include transitioning to 100% renewable energy in manufacturing by 2030, with 60% already achieved by 2024, and investing in electric vehicle (EV) fleets for distribution. PepsiCo’s Sustainability Capital Expenditures Fund, established in 2020, supports projects like energy-efficient equipment, avoiding 210,000 metric tons of GHG emissions annually.

The water stewardship goal aims to replenish 100% of water used in high-risk watersheds, such as those in India, Pakistan, and South Africa, by 2030. PepsiCo’s operations consume 50 billion liters of water annually, with agriculture accounting for 70%. The company has replenished 22 billion liters in high-risk areas since 2018 through projects like drip irrigation and watershed restoration. By 2025, PepsiCo plans to improve water-use efficiency by 25% in its manufacturing facilities, supported by a $1 billion Green Bond issued in 2019 for sustainable projects.

These targets respond to growing regulatory and consumer pressure. The EU’s Corporate Sustainability Reporting Directive and India’s Business Responsibility and Sustainability Reporting framework require detailed ESG disclosures, which PepsiCo is addressing through annual sustainability reports. The company’s efforts also align with India’s ethanol blending program, as it explores biofuel options for its supply chain, reducing reliance on fossil fuels. However, challenges include the high cost of scaling renewable energy in developing markets and managing Scope 3 emissions, which involve complex supplier networks.web:previous

Economically, PepsiCo’s sustainability initiatives are expected to create 10,000 jobs by 2030, particularly in renewable energy and water management projects. The focus on water resilience supports communities in water-stressed regions, enhancing social equity and aligning with the Justice40 Initiative’s principles. Critics argue that PepsiCo’s reliance on carbon offsets for net-zero goals may delay direct emission reductions, and scaling water replenishment requires significant investment in infrastructure. The company is addressing these by partnering with NGOs like WaterAid and investing in regenerative agriculture to reduce water and carbon footprints.

Globally, PepsiCo’s strategy positions it as a leader among food and beverage companies, competing with peers like Nestlé and Unilever. Its collaboration with farmers in India to adopt sustainable practices, such as precision irrigation, supports the country’s rural economy and aligns with the Atmanirbhar Bharat initiative. However, the Trump administration’s rollback of clean energy grants, including those for biofuel infrastructure, could limit federal support for such initiatives in the U.S.. PepsiCo is mitigating this by focusing on private funding and global partnerships.web:previous

Conclusion

PepsiCo’s updated climate and water goals, led by Jim Andrew, demonstrate a proactive approach to sustainability, targeting net-zero emissions by 2040 and water replenishment by 2030. While challenges like cost and regulatory shifts persist, the initiatives strengthen PepsiCo’s market position and support global climate and equity goals. Continued investment and collaboration will be key to achieving these ambitious targets.

Source: ESG Dive