PepsiCo: Positioning for a Water-Constrained Future

In 2009 PepsiCo, with the NGO Forum for the Future, undertook a scenario-planning exercise looking at potential environmental and social risks and opportunities facing the company out to 2030. With respect to water, the exercise brought to light potential constraints on future water availability in key countries and markets, with implications for PepsiCo’s food and beverage plants and its agricultural supply chain.

This risk assessment helped inform the company’s core water-related performance goals, which are underpinned by a commitment to respect water as a fundamental human right. The company’s goals include:

• Improving water use efficiency by 20% by 2015

• Striving for “positive water impact,” returning more water to the environment than its operations consume in water-stressed areas
• Working with agricultural suppliers to promote farming practices that protect water, the climate, land and biodiversity

At the operational level, PepsiCo is working to meets its water efficiency goal through the company’s Sustainable Engineering Guidelines, which provide guidance on water use reduction and plant process design and management as well as site selection. Additionally, PepsiCo uses the ReCon tool, a diagnostic for understanding plant water and energy use and creating strategies to reduce them. These efforts are reinforced at the corporate level through a capital expenditure filter that reviews key water (and other sustainability) risks and opportunities associated with projects linked to capital requests greater than $5 million. As of 2010, the company had improved its water use efficiency by 18% against its 2006 baseline.

Beyond driving plant-level efficiency, the company is prioritizing watershed-level interventions in highly stressed regions with a focus on projects and collaborations that return water to the surrounding watershed and communities. To this end, PepsiCo has worked with The Nature Conservancy on a pilot project that identified watershed restoration priorities at sites in Mexico, the U.S., India, China and the U.K.

The company is also looking beyond its direct operations to its agricultural supply chain and working with suppliers to deploy novel water-saving technologies like the “i-Crop” tool.  i-Crop is a web-based crop management system developed with Cambridge University that enables farmers around the world to monitor, manage and reduce their water use and carbon emissions while maximizing potential yield and quality.