Water stewardship has long been one of PepsiCo’s top priorities, and it's an important part of building a Positive Value Chain. As one of the first companies of our size to acknowledge water as a human right, we have a vision to become "net water positive." We have adopted an approach to watershed management that includes improving water-use efficiency across our value chain: on farms and in manufacturing facilities; replenishing water in the local watersheds that are most at risk and where we operate; and increasing safe water access for communities that face scarcity. As a food and beverage company, PepsiCo is acutely aware of the critical role water plays in the food system, and it is our vision that wherever in the world PepsiCo operates, water resources will be in a better state because of our presence. We work to understand the water challenges at a local level and support collaborative solutions that address the specific needs of the watershed.
We have set standards for ourselves and our supply chain that support our vision for net positive water impact, and ultimately — a Positive Value Chain. To this end, in 2021 we announced a new, impact-driven ambition, including a set of 2030 goals aimed at becoming net water positive in our operations, enhancing watershed management in our agricultural supply chain and contributing to community water health. All together, our water ambition aims to reduce absolute water use and replenish back into the local watershed more than 100 percent of the water used. This 2030 agenda builds on our 2025 commitments and includes a specific focus on:
- Advocating for and contributing to a measurable improvement in the health of high water-risk watersheds where we directly source our crops, including an improvement in water-use efficiency of 15 percent (by 2025)
- Achieving “best-in-class” or “world-class” water-use efficiency at all company-owned and third-party manufacturing facilities by 2030, covering more than 1,000 facilities in high-risk and lower-risk watersheds
- In high water-risk areas, replenishing more than 100 percent of the water that we use back into the local watershed by 2030
- Adopting the Alliance for Water Stewardship Standard in all high water-risk areas where we have company owned facilities by 2025
- Providing 100 million people safe water access by 2030
To improve our water-use efficiency, we identify opportunities in at-risk locations, develop phased action plans, ensure farmers have the correct equipment, and train farmers to execute against water goals. We help farmers access more efficient irrigation equipment, support best practices for scheduling and maintenance, and enable the transition from flood irrigation to more efficient methods, such as drip irrigation. We created more than 350 demonstration farms around the world, many of which feature water-use efficiency best practices or demonstrable improvements in water quality and provide an opportunity to engage large numbers of farmers in hands-on learning and understanding innovation.
Improving water efficiency
PepsiCo supports the principles of circular water within our manufacturing operations and encourages third-party manufacturers to strive towards circularity. This means we look to reduce our freshwater footprint and identify reuse opportunities for treating process water within our own operations and those of our third-party manufacturers, particularly in high water-risk areas. The efforts we are taking through our operational water efficiency programs, behavioral changes, innovation in manufacturing and capital technology investments are delivering annual performance in line with operational targets.
We assess operational water efficiency against our peers, in both beverage and food production, based on publicly-available information as well as against peer company commitments and information shared with us through industry groups. With this knowledge, we have strived to set water efficiency goals that are best-in-class in the Consumer Packaged Goods industry for company-owned locations in high water-risk areas. Our definition of “best-in-class” is based on our assessments and benchmarking, and corresponds to using:
- 1.2 liters of water per liter of production in beverage plants, and
- 0.4 liters of water per kilogram of food within food production plants.
In PepsiCo sites not facing high water-risk and for our third-party partners in high water-risk areas, we strive for world-class water efficiency, which we define as using:
- 1.4 liters of water per liter of production in beverage plants, and
- 4.4 liters of water per kilogram of food within food production plants.
With these new goals, which build upon our 2025 goals, PepsiCo expects not only to improve production efficiency, but to also reduce absolute water use to recharge local watersheds to meet net zero water use. As part of our new ambition, we plan to expand beyond our own operations, working closely with third-party facilities to share best practices and drive towards world-class water-use efficiency.
In high water-risk areas, PepsiCo’s new best-in-class efficiency standard would reduce our company-owned operational water-use by 50 percent by 2030. We aim to reduce our freshwater footprint as much as possible in all company- and third-party-owned manufacturing facilities in high water-risk areas and we are employing a range of creative solutions to do that. By raising our efficiency standard at 99 company-owned sites in high-risk watersheds, PepsiCo aims to avoid using more than 11 billion liters of water a year.
Our approach to improving operational water-use efficiency is multi-faceted and aims to capture efficiencies through initiatives such as our Resource Conservation (ReCon) program which identifies and shares operational efficiency best practices across our locations globally. We are also developing low water footprint manufacturing processes and investing in world class technology, such as membrane technology, that allow us to safely reuse water within our manufacturing processes.
Water sustainability is integrated across all aspects of our business, including the design of line expansions, validation of new water reuse solutions, and innovation in product design through our Sustainable from the Start program. Through these and other projects, we expect to invest significantly in the coming decade to support our water strategy.
Good quality fresh water is vital to our business, as a key ingredient for our beverages, to maintain sanitary conditions throughout our operations, to grow the crops within our agricultural supply chain and to produce other raw materials necessary for our business. We expect that future water dependency in our company-owned and third-party manufacturing operations will change with improvements in both operational and agricultural water-use efficiency and water availability. With that in mind, and given the risks facing good quality fresh water, we work in local watersheds to replenish the supply of fresh water.
PepsiCo aims to replenish more than 100 percent of the water we draw for our operations in high-risk watersheds by 2030. In other words, we aim to put back more water than we take from local watersheds. To do that, we’re working with partners to deploy a range of initiatives that restore the health of high-risk watersheds and increase their ability to absorb rainfall into their aquifers, rivers and reservoirs.
Advocacy for improved water security
While we can make a significant impact in water stewardship through the actions we take across our value chain, we also have opportunities to help mitigate water insecurity on a broader level, through advocacy for improved water governance and through increased collective action.
We support existing collaborative efforts to address water risk and mitigate water insecurity. In the absence of current collaborations, we seek out new opportunities to partner with others. We do this by advocating for the adoption of smart water policies and regulations; by sharing information and best practices with water stakeholders; and by providing public education and training for consumers and communities. In addition, we joined the Alliance for Water Stewardship (AWS) in 2018 and aim to adopt the AWS Standard at all of our high water-risk facilities by 2025, using it as a vehicle for advocacy and to help ensure that freshwater resources in high water-risk locations are available for all water stakeholders.
Water is a fundamental human right, and the fact that billions of people have been left with limited access to it for decades is a problem of global importance that must be addressed rapidly. Today, 2 billion people— about 1 in 4— lack access to safely managed drinking water services. The global demand for freshwater will exceed the supply and nearly 700 million people are projected to be displaced by intense water insecurity as early as 2030. Water insecurity puts communities at risk, increasing negative health outcomes, decreasing food availability and, in the worst cases, driving communities out from their homes.
Over the last 15 years, PepsiCo and The PepsiCo Foundation have helped more than 59 million people gain access to safe water through distribution, purification and conservation programs – putting PepsiCo and The PepsiCo Foundation more than halfway to our goal of providing access to safe water for 100 million people by 2030.
The PepsiCo Foundation has invested more than $53 million in safe water access programs, catalyzing nearly $700 million in additional funding from other donors.
Our community water programs, hosted in Latin America, Asia, the Middle East and South Africa primarily, are designed to help improve water security, including building sanitation facilities and community water systems, providing loans to families to build water infrastructure in their homes, supporting local water entrepreneurs, installing community water access points and helping to rehabilitate natural springs.
Our global approach to water stewardship is led by a team of water experts in PepsiCo’s Global Sustainability Office. They, in turn, work in partnership with our respective sector teams and external partners to execute our strategy and work toward achieving our commitments. PepsiCo's water strategy applies to the entire organization, including all companies, entities or groups over which financial control is exercised. A sustainability subcommittee of the Executive Committee includes water stewardship among its areas of focus. At the Board level, the Sustainability, Diversity and Public Policy Committee oversees key water risks and practices.
Assessing Water Risk
Through our Enterprise Risk Management process, we identify and assess water-related risks within our direct operations and other stages of our value chain twice a year. Supplementing that process, we also conduct an in-depth global water risk assessment of all our company-owned operations on a rolling three year cycle. Partnering with a specialized environmental consultancy, we have developed a robust water risk assessment process that leverages multiple data sets and local insights. This process is designed to provide PepsiCo with a holistic view of all water-related risks, both current and future, in our global manufacturing locations.
Some of the inputs used include: the World Resources Institute’s (WRI) Aqueduct tool, local site risk assessment surveys, and independent expert experience and knowledge operating within the watersheds. This helps us to determine and quantify the level of physical, regulatory and reputational water risk.
The outcome of our operational water risk assessment informs which sites are designated as high risk and allows us to focus our efforts and resources where it matters most.
Improving water-use efficiency in agriculture
Measuring our agricultural water consumption requires the support of hundreds of farmers in a complex global value chain. We collect and publish agricultural water-use efficiency data every three years, or sooner if warranted by organizational changes, updated methodologies or more accurate data. Our most recent data collection was conducted in 2020. Between 2015 and 2020, we improved direct agriculture water-use efficiency in our high water-risk regions by 14 percent. As the science evolves, we continue to improve the integrity and efficiency of our data collection, processing, and reporting system. For baseline years 2015 and all subsequent years, data has been recalculated utilizing our enhanced 2020 methodology.
Improving water-use efficiency in our direct operations
In 2020, PepsiCo had 99 high water-risk manufacturing locations as defined by our global water risk assessment process. These locations span five continents and 18 countries and account for more than 30 percent of our company-owned manufacturing sites. Twelve of our top 24 markets have manufacturing operations in high water-risk locations and high water-risk sites account for more than 20 percent of our company-owned production output. To track our operational water-use efficiency goal, we measure both water withdrawal (the total amount of water that we remove from a water source) in high water-risk areas and non-high water-risk areas as well as the volume of product produced. In 2020, we withdrew approximately 82,700 ML water across all company owned operations — 21 percent from regions of high water-risk. Water consumption (the amount we withdraw that is not returned to its watershed) across PepsiCo was approximately 28,100 ML water — 20 percent from regions of high water-risk.
In 2020, we recorded a 15 percent efficiency improvement in our water-use efficiency rate at our high water-risk locations when compared to our 2015 baseline. This represents a nearly 6 percent improvement from the prior year and builds on a 25 percent improvement already achieved between 2006 and 2015 as part of our Performance with Purpose goals.
During 2020, in Mexico City we successfully deployed our first circular water project in collaboration with a franchise bottler and plan to expand further across other LATAM locations.
In 2020, through our projects across the globe, we replenished more than 3.2 billion liters of water, or 18 percent of the water we consumed in our company-owned manufacturing facilities in high-risk watersheds. While COVID-19 presented challenges for our partners on the ground, progress was driven largely by our support of the Greater Cape Town Water Fund and our new reforestation partnership with the Arbor Day Foundation in California.
Access to safe water
Access to safe water has long been a priority for PepsiCo. Between 2006 and 2020, partnerships funded by The PepsiCo Foundation have provided more than 55 million people with access to safe water, surpassing our 2025 safe water access goal early. Now, we have extended this goal to 100 million people by 2030.
When COVID-19 struck, we supported WaterAid’s global emergency response with the installation of handwashing stations and mass media awareness campaigns. In Pakistan and India, The PepsiCo Foundation helped fund a prevention campaign reaching more than 24 million people with crucial messages on social distancing and handwashing with soap.
Advocacy for improved water security
In 2019 we launched pilot projects to adopt the AWS Standard at high water-risk facilities in South Africa, Pakistan and Mexico, with a fourth pilot launched in the United States in 2020. These pilots stood up cross-functional teams of PepsiCo associates who have come together to diagnose local water risks and opportunities for the facilities to be good water stewards. At the end of 2020, we had 10 high water-risk facilities in the process of adopting the Alliance for Water Stewardship (AWS) Standard.