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Water


Water Why It Matters

Approach

Water stewardship has long been one of PepsiCo’s top priorities. As one of the first companies of our size to acknowledge water as a human right, we have adopted an integrated, circular approach to watershed management that includes improving water-use efficiency 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.

These objectives are reflected in our water goals, which are focused on areas of our supply chain located in high water-risk areas. By 2025, we aim to:

  • Improve water-use efficiency by 15 percent in our agricultural supply chain against a 2015 baseline (focused on corn and potatoes)
  • Improve operational water-use efficiency by 25 percent against a 2015 baseline
  • Replenish 100 percent of the water we use in manufacturing operations
  • Adopt the Alliance for Water Stewardship standard as our vehicle for water advocacy

In addition, we are striving to deliver safe water access to 100 million people by 2030.

Governance

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 data sets 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

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-use in our direct operations

PepsiCo supports the principals of circular water within our manufacturing operations. This means we minimize our freshwater footprint and identify reuse opportunities for treating process water within our manufacturing plants, particularly in high water-risk areas. 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 safety 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.

Water replenishment

Our replenishment goal is focused specifically on high water-risk areas, and we are committed to replenishing those local watersheds. Good watershed health in the locations we operate in is critical to the continuity of our business and the resilience of our communities. We support a variety of initiatives to help us meet our water replenishment goal and improve overall ecosystem health and biodiversity, including groundwater recharge activities, reforestation efforts, landscape restoration and biodiversity improvements, and wetlands construction and restoration.

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.

Progress


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.

Water replenishment

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.

Water Progress and Challenges

Strategic Partnerships

PepsiCo draws on the expertise and local knowledge of an array of partners in order to deliver on its water stewardship ambitions. These include non-profit organizations, research institutions, developmental experts as well as collaborative initiatives. For detail on a selection of these partnerships, see Water partnerships and engagements.

What's Next

In the coming year, our water priorities include:

  • Water-use efficiency: Continually improving water-use efficiency towards our 2025 goal with a particular focus on our most severely high water-risk growing regions (agriculture) and site performance at our 99 high water-risk sites;
  • Water replenishment: Expanding our current replenishment projects and launching new ones in key watersheds to advance our progress in improving watershed health;
  • Access to safe water: Implementing new programs and expanding existing partnerships to make progress on our safe water access goal benefiting a total of 100 million people by 2030;
  • Advocacy: Scaling up our efforts to start applying the Alliance for Water Stewardship Standard at our high water-risk facilities in new geographies.