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Sustainability Governance


Sustainability Governance Why It Matters

Approach

We believe strong governance is the foundation for delivering on our sustainability agenda. At PepsiCo, our sustainability approach is integrated into, and not separate from, our business. In governing this approach, we maintain a similarly integrated structure that combines Board and senior leadership oversight with the subject-matter and localized expertise that informs our approach.

Board of Directors

The full Board considers sustainability issues to be an integral part of its business strategy oversight. To this end, the Board established a Public Policy and Sustainability Committee in 2017. In 2020, it amended the Committee’s charter and changed its name to Sustainability, Diversity and Public Policy Committee to reflect the Committee’s ongoing oversight over diversity and inclusion matters. It provides more focused oversight of key sustainability, diversity and public policy matters. The Committee is comprised entirely of independent directors and reflects a mix of public policy, risk, international and science-related skills, qualifications and experience.

Senior leadership

Embedding sustainability within our core requires the commitment of our senior leadership, who drive the necessary mindset throughout their respective areas of oversight. Our Chairman & CEO, his direct reports and top functional leaders, have direct oversight of the sustainability agenda, strategic decisions and performance management. This ensures that sustainability is a key accountability factor for every member of our senior leadership team.

Strategy and progress against our sustainability goals are regularly reviewed during meetings of an Executive Committee sub-committee comprised of members of our senior leadership management team and also reviewed as part of the expanded Executive Committee agenda. This provides opportunities for our senior leadership to align on major strategic issues relating to sustainability. In between these meetings, senior leadership team members remain actively engaged in executing our sustainability goals.

To help drive sustainability progress, we award annual incentives for achieving key business and individual objectives related to sustainability targets. Our executive officers, including our Chairman and CEO, have strategic objectives that are aligned with our sustainability agenda. Performance against these objectives impacts both annual and long-term incentives.

Sustainability Office

PepsiCo's Global Sustainability Office, led by the company’s Chief Sustainability Officer, drives governance and delivery of the company’s sustainability agenda across the value chain. Serving as the central connection point, the Sustainability Office works closely with leaders from across the business to ensure continued progress against our sustainability agenda and that sustainability is embedded into our long-term strategic planning.

Another key role of the Sustainability Office is the ongoing collection and management of sustainability data. Data integrity is vital to maintaining trust with our stakeholders. It informs our goal setting process, helps us measure progress and is used to make investment decisions. For more on our dedicated data governance team and how we ensure accuracy, consistency and precision of our data while driving accountability among our teams, see Data Governance.

Progress

With the launch of our PepsiCo Positive strategy, we will take important steps to accelerate our sustainability journey at PepsiCo. Our agenda will further integrate sustainability into the plans, operations, and core strategies of our businesses. To this end, we have appointed a Sustainability leadership team that includes leaders who will champion sustainability in our sectors and businesses. These sector leaders will work closely with our Global Sustainability Office leaders to ensure we harness our scale and have strong levels of coordination across the company and into our businesses.

What's Next

We have an important opportunity to advance our PepsiCo Positive agenda in the years ahead. With our Sustainability leadership team now in place around the world, we will further embed sustainability into the strategies, daily operating activities, and decision making of all our businesses.