Energy

PepsiCo understands the very real threat climate change poses not only to our company, but more importantly, to our planet. We're taking measures to reduce our energy consumption and transform our business model, replacing our existing use of oil, gas and fossil fuels in manufacturing with renewable energy sources.

Reducing Our Energy Use

In the U.K. and Ireland, we improved our fleet fuel efficiency by 12 percent between 2001 and 2006. In 2007, we reduced our absolute distribution footprint by 4.3 percent despite shipping 10.3 percent more products. These achievements were made possible by improving vehicle technology, which include:

• Lower friction tires and streamlining to reduce wind resistance
• New journey-planning software
• Adopting comprehensive training program combined with an in-cab system that tracks fuel efficiency on a weekly basis

Throughout our global network, we're working towards Leadership in Energy and Environmental Design (LEED) certification -- the most rigorous standard for "green building" in the world. The U.S. Green Building Council (USGBC) has awarded the LEED Gold designation to two of our facilities: Gatorade's Wytheville, Virginia manufacturing facility and Gatorade's Tolleson, Arizona distribution center.

In May 2008, PepsiCo introduced the Sustainable Engineering Guidelines based on LEED standards. The guidelines support our environmental sustainability commitments throughout our engineering process, and apply to all new construction as well as major remodels to existing buildings globally. The Sustainable Engineering Guidelines can be accessed through a website available to all PepsiCo engineers and key partners worldwide.

Harnessing Renewable Energy

Throughout our organization, we are evolving our use of renewable energy operations.

In India, we launched our first remote wind turbine, harnessing one of the most efficient, clean and renewable sources of energy. This turbine is connected to the public electricity grid with sufficient power to meet more than 75 percent of the electricity needs of our Mamandur plant.

Our Frito-Lay plant in Modesto, California unveiled a solar concentrator field designed to drive the production of truly "solar powered" SunChips. The 5-acre solar concentrator field includes 54,000 square feet of curved mirrors designed to absorb sunlight. The solar energy captured by the 192 solar collectors produces steam that generates nearly three quarters of the heat used in the SunChips manufacturing process at the Modesto plant.

In 2007, we announced plans for our first-ever "net zero" plant in Casa Grande, Arizona. With plans to run almost entirely on renewable fuels and recycled water, retrofits to this existing Frito-Lay facility are scheduled to be completed by 2011.

We are also proud of our recent purchase of over 1.1 billion kilowatt-hours of Green-e© certified Renewable Energy Certificates (RECs) annually to equal 100 percent of purchased electricity used by all U.S. facilities. The U.S. Environmental Protection Agency estimates the PepsiCo purchase is the same amount of electricity needed to power nearly 90,000 American homes annually.

2007 GHG Emissions Intensity

Per unit of production. Represents 95% of company-owned manufacturing facilities. Non-manufacturing facilities not included.

Partnering for Change

We continue to develop external partnerships focused on strategies to reduce greenhouse gas emissions. In 2007, PepsiCo joined the U.S. Environmental Protection Agency's Climate Leaders, a voluntary partnership program that works to develop comprehensive climate change strategies, including supporting reduction in greenhouse gases. We are the first consumer products company to join with other concerned companies and non-governmental organizations in the U.S. Climate Action Partnership to encourage the federal government to enact climate legislation.