Climate change

Why it matters

Approach

Our approach to addressing climate change is driven by our pep+ (PepsiCo Positive) climate strategy, supported by our Climate Transition Plan, governance, careful risk management, ongoing stakeholder engagement and focused policy advocacy.

Governance

At PepsiCo, our sustainability approach is integrated with our business. Our governance reflects this, with a structure that combines Board and senior leadership oversight with the subject matter and localized expertise that informs our strategy and how we execute it.

PepsiCo Board of Directors

The Board plays an essential role in determining our strategic priorities and considers sustainability issues (e.g., climate change) as an integral part of its business oversight. To this end, the Board established a Sustainability and Public Policy Committee (SPPC). The SPPC is a standing PepsiCo Board committee that typically meets four times a year. The SPPC assists the PepsiCo Board in, among other things, providing more focused oversight of PepsiCo’s key climate-related programs and policies. The SPPC reviews PepsiCo’s climate-related performance and oversees management of climate-related risks and opportunities.

PepsiCo’s CEO monitors climate-related issues that are subject to PepsiCo Board oversight, including integrating climate-related issues into PepsiCo’s strategy; and assessing and managing climate-related risks and opportunities.

The PepsiCo Executive Committee (PEC)

The PepsiCo Executive Committee is comprised of the Chairman and CEO, the Chief Financial Officer, regional CEOs and functional heads and generally meets quarterly.

PepsiCo’s CEO monitors climate-related issues that are subject to PepsiCo Board oversight, including:

• integrating climate-related issues into PepsiCo’s strategy; and
• assessing and managing climate-related risks and opportunities.

PepsiCo Executive Sustainability Committee

Climate-related strategy and policies are reviewed during bi-monthly meetings of the PepsiCo Executive Sustainability Committee — a sub-committee of the PEC comprised of members of PepsiCo’s senior leadership management team, including the Chief Sustainability Officer (CSO), Chief Financial Officer, General Counsel, Chief Science Officer, Chief Operations Officer, Chief People Officer, Chief Consumer and Marketing Officer, Chief Corporate Affairs Officer and the Chief Executive Officers of certain of PepsiCo’s reportable segments. This provides opportunities for senior leadership to align on strategic issues relating to climate-related matters, and to review progress against goals; progress against broader environmental risk mitigation (such as our efforts to mitigate the impacts of climate change); and to ensure that we are adapting our sustainability strategy to changes in science, stakeholder expectations and marketplace conditions.

PepsiCo Risk Committee (PRC)

The PepsiCo Risk Committee (PRC) of the PEC, which includes PepsiCo’s Chairman and CEO, works to identify, assess, prioritize and address our top strategic, operating and business risks. The PRC is also responsible for reporting progress on our risk mitigation efforts to the Board, including climate-related risks.

PepsiCo's Global Sustainability Office (GSO)

PepsiCo's Global Sustainability Office (GSO) is charged with coordinating and informing the business’s climate-related policy and strategy, as well as short term work on mitigation and adaptation, among other things. It is led by PepsiCo’s CSO, who reports to the CEO, and works closely with leaders from across the business to work to embed climate-related considerations into PepsiCo’s long-term strategic planning and review progress against that strategy.

At the region level, sustainability teams within our business lead the execution of our pep+ strategy for their region. Region-led sustainability teams also respond to sustainability issues unique to their geography, address regional and local challenges and support best-practice sharing across other regions.

For more information about our governance practices, see Sustainability governance.

Risk management

Climate change is already producing environmental impacts including temperature extremes, adverse weather events, droughts and coastal flooding, which are expected to increase in severity and frequency. While climate change represents a risk to our business, there is also opportunity to drive resilience in the face of these events. We leverage local and global risk management processes to identify, assess, prioritize, address, manage, monitor and communicate climate-related risks and opportunities. We regularly assess the various risks and opportunities associated with the impacts from climate change that our business faces. This helps PepsiCo to safeguard against vulnerabilities and to work toward driving systemic change.

Informing our adaptation work is our Integrated Risk Management Framework, a process that identifies, assesses, prioritizes, manages and monitors the risks affecting the Company across its operations — including climate change. Climate risks are considered by both the PepsiCo Board of Directors, including its Sustainability and Public Policy Committee, and the PepsiCo Risk Committee.

In line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), in 2025 we updated our climate scenario analysis to identify climate-related risks and opportunities. The analysis focused on key areas of PepsiCo’s operations that are critical to our business and helped us understand how the business could be affected under various emissions scenarios.

Risk and opportunity assessment

We conduct global climate-related risk assessments at regular intervals as part of PepsiCo’s overall risk management framework. Our 2024 global climate-related risk assessment focused on climate-related risks with the potential to impact our business as identified through scenario analyses. Our assessment included climate-related physical and transition risks that we could face over various climate scenarios from 2030 to 2050. Risks were evaluated for their potential impact and likelihood. A subset of risks that were evaluated as having the highest potential impact and likelihood were then assessed alongside the potential business value at risk, giving us a view of potential climate-related financial impacts to the business. Results from the global climate-related risk assessment are shared with senior management to inform PepsiCo’s overall enterprise risk management program.

Climate-related risk types

Our climate-related risk assessment spanned multiple transition and physical risks. Transition risks included risks related to technology, market dynamics, regulation or potential litigation, carbon pricing and reputational impacts. We analyzed both acute, event-driven physical risks (e.g., heat waves, wildfires) and chronic physical risks associated with longer-term shifts in climate patterns (e.g., heat stress, water stress, precipitation variability).

Climate-related risk analysis

Our climate-related risk analysis focused on key areas of our operations, including sites pertinent to business continuity as assessed by our Business Continuity and Planning Management team and high water-risk sites as determined by our Global Sustainable Water and Climate teams.

We assessed climate-related risks to our business within low- and high-greenhouse gas (GHG) emissions scenarios:

• For our transition risk analysis, we assessed our business under two emissions scenarios — one aligned with the Paris Agreement (warming only 1.5°C above pre-industrial levels), and a scenario where emissions are expected to grow until 2080, leading to 3°C of warming by the end of the century above pre-industrial levels.
• For our physical risk analysis, which cover a variety of acute and chronic climate hazards, we conducted our scenario analysis for both low emissions (Shared Socioeconomic Pathways (SSPs) 1-1.9) and high emissions (SSP 3-7.0) scenarios.

Assumptions and limitations

Our physical risk analysis used modelled global climate hazard datasets and was based on data points collected across a defined geographic area (e.g., a city or state). It therefore may not be fully representative of local hazard conditions. As is standard in climate-related risk modelling, physical risk results are specific to each climate hazard and do not consider risk interconnectivity (e.g., between extreme heat and wildfires). Each hazard was analyzed separately.

Our transition risk analysis was based on the same underlying assumptions incorporated within the Network for Greening the Financial System climate scenarios relating to, among other things, future socioeconomic developments, technological advancements, and climate-related policies.

Our physical risk analysis makes use of available climate models and data. However, these risks are based on climate events and trends that, even with the strongest models, cannot be exactly predicted. Similarly, the technological and regulatory landscapes are rapidly evolving and represent a source of potential uncertainty for our assessment of transition risk.

Time horizons

Because climate-related impacts tend to manifest over longer timeframes, they are often modelled across a longer period than business risks are typically modelled. Our 2024 climate-related risk assessment considered physical and transition risk in the short (up to 2030), medium (2030-2040) and long (2040-2050) terms. Understanding how climate-related risks may affect the business over longer terms helps inform our decision-making on risk monitoring and mitigation efforts in shorter-term business planning processes.

Strategy

Climate change is already disrupting the food system, and we are focused on taking actions that seek to mitigate and adapt to its effects. Our ambition to reduce GHG emissions aims not only to benefit society, but also to help our business build resilience against the potential impacts of climate change within our supply chain.

Our climate-related strategy is centered around two pillars:

• Mitigation: Reducing GHG emissions with the aim to decarbonize our operations and supply chain; and
• Adaptation: Reducing vulnerabilities to the impacts of climate change by continuing to incorporate climate-related risk and opportunities in our business continuity plans and risk management processes.

Our strategy is supported by our Climate Transition Plan (CTP), which outlines the actions we intend to take to seek to mitigate and adapt to the effects of climate change, including in:

• Our direct operations: We are taking action in an effort to reduce our emissions in many of our company-owned and -controlled operations across the world.
• Our value chain: Outside our direct control, we strive to help reduce climate impact in our value chain, prioritizing decarbonization in agricultural sourcing, packaging and third-party transportation and distribution.
• Wider society: We believe that effectively addressing climate change requires collaboration and contributions across many stakeholders. We seek to work beyond our operations to promote actions that support progress.

Additionally, the CTP describes how our progress is connected to key external enablers and catalysts, including:

• Decarbonization and modernization of electrical grids;
• Government policy that incentivizes and/or mandates climate action;
• Standardized regulatory frameworks for disclosure and clarity in GHG emissions accounting;
• Technology innovation and commercialization;
• Advances in technology and infrastructure to enable packaging circularity;
• Market development for supply of affordable, low-carbon fuels; and
• Increased availability of capital from public, philanthropic and financial sectors to support decarbonization.

Our strategy endeavors to use scalable solutions that are available today, but also acknowledges that achieving net-zero emissions by 2050 will be supported by new technologies and mechanisms. To this end, we continue to invest in promising solutions.

Our direct operations

Our Resource Conservation (ReCon) program is a comprehensive, global platform of resources, tools and programs aiming to improve energy and water efficiency and reduce waste in manufacturing and warehousing operations. Through a combination of training and technology, ReCon seeks to identify opportunities to reduce fuel and electricity consumption with a focus on deploying energy-efficient utility and process equipment, while driving behavioral improvements through training operators.

Additionally, continued developments in fleet technology, including aerodynamics, more efficient powertrains and GPS/telematics can further drive fleet fuel efficiency. We are further improving the GHG intensity of our manufacturing and fleet operations through the use of alternative and renewable fuels, such as renewable compressed natural gas and biomass from sustainable sources, as well as transitioning to zero-emissions vehicles supported by renewable electricity purchased or generated on-site. In addition, we are investing in network optimization to reduce miles driven and improve fleet utilization, delivering both cost and emissions savings. See Fleet decarbonization for more on those efforts.

We are working on transitioning to 100% renewable electricity globally across our company-owned operations by 2030. We plan to use a combination of tactics as we strive toward this goal. Where feasible, we will install renewable energy on-site or purchase renewable energy through Power Purchase Agreements (PPAs) or with unbundled Energy Attribute Certificates (EACs). For more on our approach and progress, see Renewable energy.

Across our operations, we have outlined a set of principles, Sustainable Operations from the Start (SOftS), that provide a framework for manufacturing and distribution sites as well as the expansion of existing operations to be funded, scoped and activated with net-zero emissions and net water positive outcomes in mind.

Our value chain

Like many large, global organizations, reducing Scope 3 emissions is the biggest challenge we face in advancing progress toward our 2050 net-zero ambitions. Given the indirect nature of these emissions, quantifying and managing them is difficult and requires strategic collaboration and engagement.

We work with stakeholders in different areas of our value chain — including suppliers, contract manufacturers, franchise bottlers and customers — with the aim to help them improve the sustainability of their operations.

Wider society

We recognize that the effects of climate change are often felt most acutely by the most vulnerable in society. As we work to build resilience for our business and supply chain, we also strive to support a Just Transition for these vulnerable groups, maximizing the social and economic opportunities stemming from our Climate Transition Plan, while minimizing and carefully managing the risks. As an example, our water replenishment work in high water-risk watersheds helps to support a secure water supply for communities in areas where climate change puts water availability at risk. This includes projects in South Africa, India, Pakistan, Mexico and the western U.S.

Policy advocacy

PepsiCo advocates for a collaborative approach to climate policy that helps accelerate sustainable food systems and scale lower-emission solutions. We believe effective climate policy should be guided by the latest science and designed to support practical progress across agriculture, operations and value chains. Enabling policies, such as incentives to support regenerative agriculture and renewable energy adoption, can help provide the investment conditions and market signals needed to scale solutions while strengthening resilience in a changing world.

PepsiCo has consistently supported climate policy, including through public actions such as:

• Signing the We Are Still In declaration in support of the Paris Agreement
• Becoming a founding member of the U.S. Climate Leadership Council
• Supporting the World Economic Forum’s Alliance of CEO Climate Leaders statements on climate policy

PepsiCo’s policy engagement is part of our broader pep+ ambition and our work to reduce greenhouse gas emissions and strengthen resilience across our business and value chain. We encourage governments, businesses, trade associations and other stakeholders to work constructively to help advance climate action globally. For more on our policy engagement, see Public policy engagement, political activities and contributions guidelines.

Progress

Metrics and targets

In 2021, as part of our broader pep+ transformation, we announced new ambitions, setting 2030 Climate goals, and in 2025, we refined these goals (see below, including our latest progress against them).

All 2030 climate goals are measured against a 2022 baseline. These goals reflect the Science Based Targets Initiative (SBTi) guidance on FLAG and E&I emissions and are aligned to a 1.5^oC trajectory by 2050 under SBTi Corporate Net Zero Standard (CNZS) v1. We aim to achieve net-zero emissions by 2050 or sooner, and our targets have been officially validated by the SBTi under CNZS v1. 

Results are calculated in line with SBTi's Corporate Net-Zero Standard (CNZS) V2.0 that was issued in June 2026. Our current results for target progress with system contribution include impact from actions and market instruments eligible under SBTi CNZS V2.0. Further SBTi guidance is expected on how companies calculate impact and communicate about target implementation actions and their associated claims. Our approach may change based on updated Greenhouse Gas Protocol (GHGP) and SBTi guidance.

Our 2024 Scope 3 Energy and Industry performance was restated due to an updated 2022 baseline and 2024 data. 2024 performance was impacted by a recalculated packaging baseline estimated from updated packaging sales volume and specification data.

Our strategy to achieve our 2030 emission reduction goals does not include the purchase of beyond value chain carbon credits; however, we purchase various credits, such as certificates or market instruments, generated from actions within or associated with our value chain in line with SBTi CNZS V2.0. We plan to achieve our 2050 net-zero goal by pursuing significant emission reductions within our value chain first, then balancing residual emissions with limited use of high-quality carbon removal credits generated beyond our value chain.

In addition to the pep+ goals above, the following metrics provide further insight into our climate performance.

We believe long-term transformation requires agility to identify what’s working, what isn’t, and adjust our approach to focus on areas where we believe we can have the greatest impact. We regularly review our sustainability goals and initiatives and consider changes that are from time to time warranted, including in the context of new developments, such as business growth, necessary investments relating to our initiatives and steps necessary to maintain SBTi alignment (which advises that targets are reviewed and, if necessary, recalculated and revalidated every five years at a minimum), as well as external developments. As a result of these reviews, we updated our climate ambitions in 2025. The progress reported above is against these 2025 climate ambitions.

PepsiCo calculates and publishes an annual physical GHG emissions inventory as well as progress against its GHG emissions reduction targets. This physical inventory covers our operations (Scopes 1⁴ and 2⁵ ) and value chains (Scope 3⁶ FLAG and Scope 3 E&I). Scope 3 includes indirect emissions from PepsiCo’s value chain, calculated in accordance with GHG Protocol categories. Twelve of the 15 categories are relevant to PepsiCo’s business and PepsiCo includes them in its Scope 3 reporting. The composition of our full, physical emissions inventory is illustrated below.

In addition to the metrics included in the scope of our climate goals and in our annual inventory, we also track certain energy-related metrics to measure yearly performance. For more detail on our energy efforts and strategy, see Renewable energy.

Note on methodology

Tracking, calculating and reporting the greenhouse gas emissions for a company of PepsiCo’s size is complex. Emissions, and Scope 3 emissions in particular, are calculated with the aid of estimates, regional or country-specific emissions factors developed through life-cycle assessment methodologies and modeling. Our annual reporting relies on many external standards and data sets developed by GHG accounting experts. We aim to use the best available methodologies and continually refine our approach to calculating our emissions.

PepsiCo reports emissions as direct Scope 1 emissions or indirect Scope 2 and Scope 3 emissions within its organizational boundary. In accordance with the GHG Protocol, PepsiCo uses the operational control method to set this boundary. In accordance with this method, unless otherwise noted, PepsiCo accounts for 100% of GHG emissions from operations over which it or its subsidiaries have operational control excluding deconsolidated entities, which are not included in PepsiCo’s consolidated financial statements, as well as acquisitions from Q4 of the reporting year in accordance with PepsiCo’s historic data policy.

Our emissions reduction targets are forward-looking ambitions set in alignment with SBTi criteria and guidance. They are informed by our GHG Protocol-aligned inventory, but apply a narrower subset of inventory categories as permitted by SBTi. This narrower scope focuses on emissions where PepsiCo has the greatest influence.

For detail, see 2025 PepsiCo Climate Accounting Statement. PepsiCo’s GHG footprint is subject to change as a result of major updates to our operational footprint, particularly when the company completes acquisitions or divestitures. Additionally, PepsiCo may update inventory and target methodologies as GHG Protocol and SBTi guidance evolves.

Actions and challenges

Scope 1 and 2 emissions

We are undertaking a variety of initiatives in an effort to sustain progress against our 2030 Scope 1 and 2 goal.

In 2025, we invested $77 million into a strategic operational decarbonization plan for our snacks business in the U.K. We introduced three energy-efficient electric ovens at our Leicester facility. These ovens — powered by 100% renewable electricity — are expected to help the site reduce GHG emissions by 1,000 metric tons annually compared to the ovens previously in place.

We continued to make progress towards our ambition to achieve 100% renewable electricity in company-owned operations by 2030. In 2025, PepsiCo’s South Africa business signed key commercial terms with NOA Group, a large independent power producer. This agreement aims to secure approximately 70% renewable electricity for 12 major manufacturing sites in South Africa. For more information, see Renewable energy.

Scope 3 emissions

In line with sectoral guidance from the SBTi, we manage our Scope 3 emissions in two categories: Forest, Land and Agriculture (FLAG) and Energy and Industry (E&I).

Forest, Land and Agriculture (FLAG) emissions

FLAG emissions in our value chain arise from upstream land-related activities within our agricultural supply chain and packaging procured by PepsiCo, our key franchise bottlers and our contract manufacturers. Our agriculture climate strategy intersects with our Positive Agriculture goals. In 2025, we continued to progress on our Deforestation and Conversion Free and our Regen, Restore and Protect goals, which delivered GHG emission reductions and removals towards our FLAG target⁷. We expanded our partnership with Yara to Latin America in 2025. The partnership — initially launched in 2024 in Europe — aims to equip farmers with lower-carbon fertilizers and precision farming technologies adapted to several key ingredients.

Our Agriculture emission reduction strategy also intersects with our Positive Choices goals. Our progress on reducing the amount of added sugars in our beverage products helped contribute emission reductions to both our FLAG and E&I emissions reduction goals.

Energy and Industry (E&I) emissions

E&I emissions arise from all other relevant Scope 3 categories as outlined in our Climate Accounting Statement, including certain purchased goods and services, ingredient processing, packaging and contract manufacturing. Our efforts to reduce E&I emissions focus on agricultural ingredient processing, packaging and third-party transportation and distribution. Striving toward our net-zero goal requires continued collaboration within our upstream and downstream value chain from whom these emissions originate.

In agricultural ingredient processing where our agriculture E&I emissions originate, we are engaging our key agricultural suppliers in an effort to support the increase of their use of renewable electricity and fuels to reduce the GHG footprint of ingredient processing. In 2026, PepsiCo began partnering with agriculture technology company TalusAg to help decarbonize fertilizer across global agricultural supply chains using low-carbon ammonia environmental attributes — marking PepsiCo’s first executed transactions of this kind. The initial agreements span PepsiCo’s Europe, Sub-Saharan Africa, Asia Pacific and global teams, covering about 30,000 metric tons of low-carbon ammonia, with an option for an additional 41,000 metric tons.⁸

To reduce packaging impact, in our key packaging markets, we aim to incorporate more recycled content in our primary packaging and strive to make our primary and secondary packaging recyclable, reusable or compostable. We are also reducing the weight of packaging material, introducing alternative materials and exploring alternative business models that require less packaging. Furthermore, we are engaging our key packaging suppliers aiming to accelerate the adoption of clean energy solutions to reduce the GHG emissions of packaging materials.

Within third-party transportation and distribution, we aim to improve the efficiency and carbon intensity of the fleet that moves our products. By mapping and quantifying our baseline emissions from third-party carriers and engaging with our third-party carriers, the U.S. EPA's Smartway program and industry alliances like the Smart Freight Buyers Alliance, we are identifying opportunities for improvement within our carrier base. These include working with our carriers to adopt efficiency measures, use sustainable biofuels and transition to zero-emissions vehicles such as electric vans and trucks.

Supplier and supply chain engagement

Because a portion of our Scope 3 emissions lies within our direct tier 1 suppliers’ operations, we work with select suppliers to drive engagement on climate change mitigation and adaptation⁹. Our strategy for supplier engagement is a continuous improvement process based on three key elements:

• Aligning with suppliers on priorities;
• Building capabilities; and
• Supporting meaningful climate actions.

We have asked certain suppliers¹⁰ to:

1. Set and commit to a Science Based Target (SBT);
2. Share an SBT-aligned decarbonization plan and annual progress;
3. Report Scope 1 & 2 emissions; and
4. For agricultural suppliers, collaborate with PepsiCo to roll out regenerative agriculture practices.

As suppliers meet or exceed these criteria, they climb our Leader Ladder. We created this framework for suppliers who account for 80% of our emissions in the agricultural ingredient and packaging categories of our Scope 3 emissions to help better understand how we can support each other on our sustainability journeys. When we launched this effort in 2023, 21% of suppliers were in the Initiating phase of their sustainability journey and 15% were already in the Accelerating phase. In 2025, suppliers continued to advance progress with only 6% remaining in the Initiating stage of the journey and 29% achieving the position of Leader status in the Leader Ladder.

As these suppliers work to improve their emissions footprints through operational efficiencies, renewable energy use, address upstream emissions across on-farm activities and raw material extraction we anticipate a reduction of our Scope 3 emissions. In addition, PepsiCo engages with select highly mature suppliers through direct leadership-level discussions to align on priorities and drive collaborative initiatives. These collaborations are expected to help reduce Scope 3 emissions for both PepsiCo and its suppliers.

In 2025, we launched the PepsiCo’s Clean Heat Community, which brings together certain suppliers in Europe and North America with the aim to accelerate thermal decarbonization. Through expert-led workshops on specific thermal decarbonization levers, the program aims to foster peer collaboration and provide access to the latest know-how as well as industry-leading solution providers, and funding opportunities. In this way, the program aims to help suppliers learn, connect, and accelerate action on thermal decarbonization in a pre-competitive environment.

We are also striving to address Scope 3 emissions through additional initiatives:

• Engaging third parties, including our franchise bottlers, non-controlled joint ventures, contract manufacturers and co-packers, in an effort to bring them along on our climate action journey. Improving their operational efficiency will help reduce PepsiCo’s Scope 3 emissions.
• Continuing Sustainable from the Start, an environmental sustainability impact assessment program for our product development process. The program includes a toolkit and business processes that aim to build the capability within our various functions involved in product innovation to help them understand the environmental and climate impacts of product design and make sustainable choices. In doing so, they are supporting our strategic, long-term vision to decouple our business from fossil fuels. To learn more, see Sustainable product design.

Challenges

The challenges in this journey are significant and complex, and we have work to do to achieve our vision. When we set our initial pep+ climate goals in 2021, the political and regulatory landscape looked very different than it does today. Many expected developments — stronger policy support, increased investments and regulatory action to drive change — didn’t materialize, and business growth introduces new challenges to emissions reductions. But, we remain focused on trying to drive change through our pep+ (PepsiCo Positive) agenda and striving to reduce the linkage between our business and emissions growth.

Decarbonizing our value chain is a complex effort requiring a multi-pronged approach and the commitment of stakeholders as diverse as suppliers, regulators, customers and consumers. We know that our efforts do not occur in a vacuum — they rely on the developments of the wider systems in which we operate. Key areas, such as modernization of electrical grids and development of affordable renewable fuel supply, will influence our progress as we work towards decarbonization. We’ve learned a lot as we’ve tested technologies and we aim to continue to implement scalable solutions that are available today, while also investing in new promising technologies.

Delivering our products requires certain key inputs and activities whose emissions we cannot always control or even influence. This includes the crops that make up our products, the packaging that holds them and parts of the transportation system that delivers them to our customers. In particular, decoupling business growth and emissions remains a challenge, with technologies and policies needed for lower emissions often lagging behind the pace of economic growth.

We know that turning the tide will take diligence and time, but we are laying the foundation by building resilience in our own operations and beyond. Though progress has not always been fast, we are seeing movement in these hard-to-move spaces.

Strategic collaborations

While we strive to reduce our own impact, we believe that effectively addressing climate change also requires collaboration. To this end, we engage regularly with industry, non-governmental organizations and other stakeholders to promote actions that help protect the climate. We recognize the importance of engaging with stakeholders at all levels as we aim to support a comprehensive and inclusive approach to combating climate change.

Through collaborations and shared learning, we work to try to reduce greenhouse gas emissions, enhance resilience and advocate for practices that support a low-carbon and sustainable future. Across our third-party engagements, we focus our work on designing, launching and scaling holistic solutions to complex challenges, investing alongside key stakeholders across all levels and leveraging external technical and financial resources in an effort to deliver outcomes that reduce climate risk, increase resilience and drive mitigation and long-term sustainability. By working together, we aim to drive innovation, foster knowledge exchange, and implement effective solutions that address the multifaceted challenges of climate change.

While the breadth of our collaborations and engagements is extensive, we cannot highlight every initiative in every market. Instead, we offer here a representative sample of our collaborative work to fostering meaningful change within the climate action landscape.

Climate advocacy

These organizations focus on collaborations related to climate advocacy, policy development, and driving sustainable business practices:

• World Economic Forum (WEF) Alliance of CEO Climate Leaders: PepsiCo is a member of WEF’s Alliance of CEO Climate Leaders, a CEO-led community striving to support climate ambition and accelerate the net-zero transition.
• WEF First Movers Coalition (FMC): PepsiCo joined the First Movers Coalition in 2022. It brings together pioneering companies working to drive the transition to a sustainable, net-zero economy. PepsiCo joined the initiatives focused on trucking and aluminum, in an effort to engage with third parties along the value chain to unlock solutions and drive scale.
• WEF First Movers Coalition for Food: PepsiCo joined the FMC for Food as a launch member in 2023. This coalition brings together food system leaders in an effort to accelerate the transition to low emission agri-food commodities.

Sustainable business and energy transition

Centered around renewable energy adoption, energy transition, and sustainability consulting, the following collaborations aim to spur action for shifting energy sources to more renewable options:

• Supplier Leadership on Climate Transition: PepsiCo is a founding member of Guidehouse's Supplier Leadership on Climate Transition (Supplier LoCT). This initiative helps engage suppliers, contract manufacturers and bottlers in an effort to spur climate-related improvements throughout supply chains.
• The Agriculture Innovation Mission for Climate (AIM for Climate): AIM for Climate is a collaborative initiative that brings together businesses, governments, and organizations in an effort to advance climate smart solutions and achieve carbon neutrality. AIM for Climate seeks to address climate change and global hunger by uniting participants to significantly increase investment in, and other support for, climate-smart agriculture and food systems innovation over five years (2021 – 2025). It is a joint initiative by the United States and United Arab Emirates. AIM for Climate to date has secured more than $13 billion in public and private investments for climate-smart agriculture.
• MIT Climate & Sustainability consortium: PepsiCo is part of the MIT Climate & Sustainability consortium with the aim to accelerate the implementation of large-scale, real-world solutions to meet the climate challenge and to inspire transformative climate progress across industries and across the globe. We are actively involved in workstreams related to nature-based solutions and decarbonizing long-haul transportation.
• Energy Transition Accelerator (ETA): Coordinated by Center for Climate and Energy Solutions (C2ES), the ETA is an innovative carbon finance platform aimed at catalyzing finance to speed the just energy transition in emerging and developing economies. PepsiCo has been an early supporter of ETA, signing a letter of intent at COP27.

In addition to the collaborations listed above, we work with other groups to tackle specific challenges related to Fleet decarbonization and Renewable energy.

What’s next

Striving toward our climate goals is a key priority under pep+. To this end, we expect to focus on the following priorities in the coming year:

• Renewable energy within our operations;
• Scaling up regenerative practices across our agricultural supply chain;
• Supplier engagement and collaborations within our agricultural and packaging supply chains;
• Material reduction and recycled content in our packaging;
• Opportunities to decarbonize transportation and distribution; and
• Engagement with third-party manufacturers on operational efficiencies and renewable energy.

¹Our 2025 results for target progress with system contribution include 5% emissions reductions against physical baseline (2024: 3%). See the Climate Accounting Statement for detail on how we measure progress on this metric. Metric published August 13, 2026

²Our 2025 results for target progress with system contribution include 10% emissions reductions against physical baseline (2024: 6%). See the Climate Accounting Statement for detail on how we measure progress on this metric. Metric published August 13, 2026

³Our 2025 results for target progress with system contribution include 15% emissions reductions against physical baseline (2024: 7%), and include FLAG removals calculated in line with GHGP Land Sector and Removals Standard (LSRS) along with system contribution. See the Climate Accounting Statement for detail on how we measure progress on this metric. Metric published August 13, 2026

⁴The definition of physical Scope 1 and 3 emissions will be finalized in the upcoming GHGP Actions and Market Instruments (AMI) standard

⁵Per GHGP, Scope 2 physical emissions are the same as location-based emissions

⁶The definition of physical Scope 1 and 3 emissions will be finalized in the upcoming GHGP Actions and Market Instruments (AMI) standard

⁷2025 was the first year that we reported carbon removal towards our FLAG target. The majority of removal was soil carbon sequestration and a limited amount came from aboveground biomass (e.g., agroforestry). We followed the GHG Protocol Land Sector and Carbon Removal Standard’s requirements on removal. We applied a conservative buffer pool of 30% to manage permanence risk and will reevaluate this buffer percentage in future years as we work with our project implementers to improve approach to permanence and ongoing monitoring

⁸The impact of the Talus Ag fertilizer attributes will be accounted for in 2026 GHG reporting (2027 reporting year)

⁹Tier 1 suppliers are the direct suppliers of PepsiCo

Calculation methodology

Target metric

Achieve a 50% reduction in Scope 1 and 2 emissions by 2030 (vs 2022 baseline)

How we measure

Assurance: 2025 inventories subjected to limited assurance

Boundary: PepsiCo accounts for 100% of GHG emissions from consolidated operations over which it or its subsidiaries have operational control. Our boundary includes PepsiCo-owned manufacturing facilities, warehouses, distribution centers and offices as well as company-owned and -operated fleet, leased locations and fleet and other vehicles under PepsiCo’s operational control.

Exclusions: Deconsolidated entities, which are not included in PepsiCo’s consolidated financial statements, as well as acquisitions from Q4 of the reporting year

Baseline: 2022

Restatement from prior year(s): None

See PepsiCo 2025 Climate Accounting Statement for detail on how we measure progress against this metric.

Target metric

Achieve a 42% reduction in Scope 3 Energy and Industry (E&I) emissions by 2030 (vs 2022 baseline)

How we measure

Assurance: 2025 inventories subjected to limited assurance

Boundary: As the GHG Protocol and related guidance continue to evolve, our inventory accounting and methodology may change in the future. This goal includes emissions from the categories and activities in our Scope 3 E&I inventory within our organizational boundary, absent the exclusions below.

Exclusions: Deconsolidated entities, which are not included in PepsiCo’s consolidated financial statements, as well as acquisitions from Q4 of the reporting year. Additionally, in line with the Science Based Targets Initiative (SBTi), our target excludes:

• Purchased goods and services not related to agriculture, packaging and contract manufacturing, capital goods, upstream transportation and distribution, waste, employee commuting, processing of sold products, end of life of sold products and investments
• E&I emissions from small-volume commodities in agriculture purchased goods and services
• Agriculture E&I emissions for PepsiCo’s concentrate business
• Small-volume materials in packaging
• Contract manufacturers’ Scope 3 E&I emissions (however, their direct Scope 1 and 2 emissions associated with the production of PepsiCo products are included in our target)

Baseline: 2022

Restatement from prior year(s): Our 2024 performance was restated due to an updated baseline and 2024 data. Prior-year performance was impacted by a recalculated packaging baseline estimated from updated packaging sales volume and specification data

See PepsiCo 2025 Climate Accounting Statement for detail on how we measure progress against this metric.

Target metric

Achieve a 30% reduction in Scope 3 Forest, Land and Agriculture (FLAG) emissions by 2030 (vs 2022 baseline)

How we measure

Assurance: 2025 inventories subjected to limited assurance

Boundary: As the GHG Protocol and related guidance continue to evolve, our inventory accounting and methodology may change in the future. PepsiCo’s Scope 3 FLAG goal includes emissions in our Scope 3 FLAG inventory within our organizational boundary, absent the exclusions below.

Exclusions: Deconsolidated entities, which are not included in PepsiCo’s consolidated financial statements, as well as acquisitions from Q4 of the reporting year. Additionally, in line with SBTi, our target excludes:

• FLAG emissions from small-volume commodities in agriculture purchased goods and services
• FLAG emissions from contract manufacturing purchased services

Baseline: 2022

Restatement from prior year(s): None

See PepsiCo 2025 Climate Accounting Statement for detail on how we measure progress against this metric.