As populations become wealthier, their consumption patterns are likely to change with an increase in protein sourced from meat and dairy. These require significant resources to produce, and contribute to climate change and other environmental issues when not managed sustainably. At the same time, there are currently almost one billion people with insufficient food, and billions more with micronutrient deficiencies. These numbers will also increase by 2050.

It is clear that the health of the planet and the health of people are becoming increasingly intertwined. Progress in achieving some of our environmental and health goals requires complex trade-offs to ensure that one set of goals doesn't advance at the cost of others.

As a food and beverage company that both depends on food production for our raw materials and seeks to deliver nutritious, delicious foods and beverages to our consumers, we need to integrate and balance our goals in human and environmental sustainability in order to manage future resource risk.

Water stewardship is one area where that balance is critical for our business. We're proud to be among the first companies to make a commitment to the Human Right to Water. We're also working with partners such as Water.org, Safe Water Network, Earth Institute and Save the Children to bring this commitment to life by providing funding and on-the-ground support to make clean water available to more people. And

we're working with The Nature Conservancy and Conservation International to make sure the best water management practices are being used, including water risk assessments, water footprinting and watershed protection activities.

We are sharing our knowledge about best sustainable agricultural practices to increase the supply of affordable crops and improve efficiency. We are investing in, applying and scaling new technology, researching and testing hearty new varietals of crops used in our products, such as potatoes and oats that can thrive in unforgiving climates, and providing sustainability training and business support to farmers.

Corporations have a particular responsibility to utilize resources efficiently. And large companies like PepsiCo must balance this responsibility with delivering profitable growth to shareholders, while also considering the integrated impacts on nutrition, the environment and agriculture in all business activities.

As a consequence, physical farm labor is being replaced by a more sedentary lifestyle that goes with urban living. And the rise of urban living has increased the demand for affordable snacks and convenient foods. One of the results of this transformation is a changing global health profile. Fewer people are dying from infectious diseases, and for the first time in human history, noncommunicable diseases are responsible for more deaths than any other causes.

According to the World Health Organization, diets high in salt, fat and sugar, combined with a lack of physical activity, are key risk factors for a range of chronic diseases. As a global leader in the food and beverage industry, PepsiCo is taking aggressive steps to address these problems.

First and foremost, we are broadening our range of products to offer consumers a wider variety of healthier choices that include more whole grains, fruits, vegetables and dairy, and less sodium, added sugar and saturated fat. We have taken a leadership position in making sure school vending machines provide healthier snacks and beverages, along with maintaining higher standards on advertising by only promoting our healthier products such as Tropicana and Quaker Oats to children.

And we continue to work with partners around the world to educate consumers about the benefits of a healthy lifestyle as we work to create healthier

food and beverage choices. In Latin America, we support Vive Saludable Escuelas, a proven initiative that teaches children how to add physical activity to their daily lives.

Given our high-profile brands, we also believe that we can play a critical role in promoting health through sharing our expertise and developing partnerships involving governments, consumers and advocacy groups with an interest in these issues. PepsiCo is currently involved in partnerships that span nutrition, agriculture and science, such as working with Scientists Without Borders on a challenge to address maternal and infant health.

We have invested behind innovative agricultural

partnerships to expand our ability to deliver healthier products in low- and middle-income countries. PepsiCo is one of the first private-sector companies to participate in one of the Inter-American Development Bank's (IDB) regional trust funds for development activities. The inaugural agriculture project of the partnership will expand commercial sunflower crop production in Mexico and create a sustainable market for sunflower production.

PepsiCo will also launch a small agriculture pilot in 2011 in Ethiopia to develop best practices in the cultivation of chickpea, a nutritious, protein-rich legume with environmental benefits as a nitrogen-fixing crop. Improvements in cultivation, storage and primary processing of chickpeas

will likely benefit PepsiCo's commercial business in Sabra hummus (a joint venture with Strauss Food Group), and Ethiopian farmer communities. The project will also help The World Food Programme's development of a complementary feeding product to meet nutrition needs of undernourished children in Ethiopia and other countries.

Equal opportunity for women and girls, however, is still a vision and not a reality. More than 70 countries haven't even achieved gender parity in primary education. The gap between women and men in economic participation also remains wide in the business community. A review of Fortune 500 companies published in May 2011 by Catalyst found that only 14.4 percent of executive officers, 7.6 percent of top earners and 2.4 percent of CEOs are women.

In every society, women's educational development and professional growth must be championed in a deliberate and purposeful way. To encourage corporate leadership for gender

equity, PepsiCo's Chairman and CEO Indra Nooyi has signed a CEO statement of support for the Women's Empowerment Principles—Equality Means Business. The Principles offer guidance to companies on how to empower women in the workplace, marketplace and community. As the CEO statement recognizes, "a broad concept of sustainability and corporate responsibility that embraces women's empowerment as a key goal will benefit us all."

PepsiCo Foundation grants focused on clean water, sanitation, food security and health are

helping to create enabling environments in which women and girls in developing countries can advance. For example, 95 percent of the beneficiaries of WaterCredit loans through Water.org are women. PepsiCo's businesses, along with our employees, are also helping women and girls to empower themselves. Frito-Lay Turkey's "KizlarimizOkuyor" project, for example, helps girls in economic need continue their high school education, while PepsiCo Europe's partnership with the Trestle Group Foundation helps female entrepreneurs in emerging markets by providing them with a specially selected female PepsiCo executive as a mentor.

Within our company, our commitment to diversity and inclusion encompasses the goal of achieving parity between women and men in our management and leadership ranks. We have made progress.

Thirty-three percent of our Board members and 31 percent of our executives in the U.S. are women.While we are proud of the progress we have made, we remain focused on supporting the advancement of women at PepsiCo to achieve even greater gains.