In October 2019, PepsiCo issued its first Green Bond, a 30-year, $1 billion senior notes offering, the proceeds of which are being used to build a more sustainable food system. The net proceeds from this offering have been and will continue to be allocated to investments in Eligible Green Projects, supporting our efforts in three categories, while also advancing several of the UN’s Sustainable Development Goals:
- Sustainable plastics and packaging
- Decarbonization of our operations and supply chain
- Water sustainability
We have integrated our sustainability capital expenditure and Green Bond allocation processes. PepsiCo’s Sustainability team assesses and determines Eligible Green Projects. Following final approval, PepsiCo’s Sustainability team recommends allocation of proceeds, and provides description of Eligible Green Projects to PepsiCo’s Finance department. PepsiCo’s Finance department tracks the allocation of net proceeds to approved projects. Pending allocation, net proceeds are temporarily invested in cash, cash equivalents, short-term investments, or used to repay other borrowings.
Until the net proceeds are fully allocated, we plan to publish an annual update of the allocation of the net proceeds, including, subject to any confidentiality considerations, descriptions of select projects funded, and, where possible, their environmental impacts. These allocation reports will be accompanied by an assertion by PepsiCo management stating that amounts equivalent to the net proceeds of the Green Bond offering (or, pending full allocation, a portion thereof) were allocated to Eligible Green Projects. Our management assertion is independently assured. For more detail, see our Green Bond Prospectus.
In October 2021, we published our second annual Green Bond Report, describing our use of proceeds. As of December 31, 2020, PepsiCo had allocated $858 million in proceeds from the issuance of its first Green Bond to Eligible Green Projects. This represents nearly 90 percent of the net proceeds and includes investments in all three eligible categories of packaging, decarbonization, and water. Individual investments have ranged from nearly $60,000 to over $14 million, and spanned six continents. While projects within the three categories focused on a wide breadth of solutions, they all shared the common effect of supporting PepsiCo’s vision for a sustainable food system and our pep+ ambitions.
Through the investments made with Green Bond proceeds, PepsiCo has been able to make significant progress towards our Positive Value Chain climate, water, and packaging ambitions. As of December 31, 2020, our eligible decarbonization expenditure has helped to increase our renewable energy generation capacity and put technology in place to avoid nearly 210,000 metric tons of GHG emissions in our direct operations and supply chain annually. We’ve funded projects to support our sustainable packaging ambitions and we have launched 100 percent rPET packages in 22 global markets, avoiding nearly 400,000 metric tons of GHG emissions since 2017. We have avoided the use of approximately 5 billion liters of water in our company-owned plants annually and replenished 1.3 billion liters of water into water-stressed watersheds.