Approach

PepsiCo recognizes the need to protect and enhance our natural ecosystems. Under pep+ (PepsiCo Positive), we have set ourselves an end-to-end strategy with sustainability at its core, built to make progress where we believe our ability to influence positive, systemic change is greatest. pep+ includes a series of goals that touch most aspects of our business, aiming to drive Positive Agriculture, a Positive Value Chain and enable Positive Choices. Among these goals are many actions that aim to help us to safeguard nature and in doing so, aim to help to mitigate risk for our business and supply chain while also supporting long-term ecosystem health. These include actions taken in an effort to achieve the following:

• Spread the adoption of regenerative agriculture, restorative or protective practices across 10 million acres of the land supporting the growth of our key crops and ingredients by 2030.¹ We approach regenerative agriculture with five impact areas² in mind, one of which includes enhancing biodiversity and protecting or restoring nature where there are identified risks. 
  • This is an expansion of our original 7-million-acre regenerative agriculture goal and expands the ambition both in scale and depth, as it includes specific objectives for nature within the goal such as biodiversity and ecological improvements on lands not used for agricultural production, and which remain out of agricultural production in the future, but which enhance the resilience of the ecosystem in the farming landscape. This could include demonstrating improvement of converted or degraded land to desired ecological states (including improved ecosystem connectivity), increased areas under natural ecosystem protection or increased protected area management effectiveness.
• Sustainably source 90% of our key ingredients and progress volumes (10% or less) that face systemic barriers towards being sustainably sourced in accordance with our guidelines, by 2030.³
• Continue to strive toward deforestation-free sourcing by 2025 and toward deforestation- and conversion-free sourcing by 2030⁴ for high-risk commodities in our company-owned and operated activities.
• Reduce absolute greenhouse gas (GHG) emissions across our value chain by 2030 through a 50% reduction in Scope 1 and 2 emissions,⁵ a 42% reduction in Scope 3 energy and industry (E&I) emissions⁶ and a 30% reduction in Scope 3 forest, land and agriculture (FLAG) emissions⁷ (all vs. a 2022 baseline).
  
• Achieve net-zero emissions by 2050 or sooner.⁸
• Achieve 100% water replenishment at company-owned facilities designated in high water-risk areas by 2025.⁹
• Replenish back into the local watershed 100% of the water we use in high water-risk PepsiCo and franchise bottler manufacturing facilities by 2030.¹⁰
• Adopt the Alliance for Water Stewardship (AWS) Standard in high water-risk manufacturing facilities by 2025.
• Pursue our sustainable packaging vision, including:
  • For our primary plastic packaging in key packaging markets:
    • Achieving an average of a 2% year-over-year reduction in our absolute tonnage of virgin plastics through 2030;¹¹
    • Using 40% or greater recycled content in our plastic packaging by 2035 or sooner;¹¹ and
  • Achieving 97% or greater reusable, recyclable or compostable (RRC) packaging by design by 2030 in our primary and secondary packaging in our key packaging markets.¹²

In pursuit of these aspirations, we are taking deliberate steps in an effort to address the impacts, risks and opportunities that connect our business with nature. Our efforts to extend regenerative farming practices and nature protection and restoration are founded on a set of techniques that aim to improve and restore ecosystems with a focus on building soil health and fertility; reducing and sequestering carbon emissions; improving watershed health; and protecting and enhancing biodiversity. Through these objectives, we aim to optimize crop yields and to secure our supply of agricultural ingredients. For more information, see Agriculture.

These efforts build on progress through our Sustainable Farming Program (SFP) to help farmers adopt practices to help create more resilient, sustainable agricultural systems aiming to help safeguard our business and nature from disruptions due to climate change, water scarcity and other risks.

Our plans to achieve our pep+ agenda are founded on careful consideration of the nuances of our business and supply chain. For nature, and for related topics such as climate change and water, this means working with internal and external experts to identify key impacts and risks and to formulate strategies aiming to mitigate them. The focus and approach of these assessments evolve over time in response to the latest science, stakeholder expectations and other developments.

Governance

Our Board of Directors and its Sustainability and Public Policy Committee (SPPC) view sustainability issues, which include nature, to be an integral part of their business strategy oversight and are actively involved in defining our ambitions and monitoring the progress in advancing the pep+ agenda. Throughout the year, the Board and the SPPC regularly receive updates from and discuss with senior management the Company’s policies, programs and related risks that concern key sustainability matters, as well as progress made towards our sustainability-related goals. See Sustainability governance for more detail.

¹See PepsiCo’s Regenerative Agriculture Guidelines for additional information, including details on key crops and regeneration, restoration and protection criteria. Results reflect total acreage meeting these criteria within the annual reporting period

²Refer to PepsiCo’s Regenerative Agriculture Practice Bank for a comprehensive listing of practices directly or indirectly linked to the five impact areas

³Sustainably sourced refers to in-scope ingredient volumes that meet the established criteria outlined in PepsiCo’s Sustainable Sourcing Guidelines. Sustainable Sourcing practices can help manage risks, but challenges like deforestation or social issues can persist in some regions

⁴PepsiCo set this ambition in its Stewardship of Forests and Natural Ecosystems Policy. High-risk commodities include ingredients and materials at high risk of deforestation and conversion as defined in our Calculation Methodology. Systemic challenges continue to be an industry-wide barrier to reaching fully deforestation-free sourcing, but we continue striving toward this ambition and expect to reach more than 90% by the end of 2025

⁵Goal tracks Scope 1 and 2 emissions consistent with the Greenhouse Gas Protocol. See Calculation Methodology for details

⁶Goal tracks energy- and industry-related Scope 3 emissions consistent with the Greenhouse Gas Protocol's Scope 3 Standard and the Science Based Target Initiative’s Corporate Net-Zero Standard V1.2. See Calculation Methodology for details on how these emissions are calculated and categories included in scope of this goal

⁷Goal tracks Scope 3 emissions based on purchased goods emissions consistent with the Greenhouse Gas Protocol's draft Land Sector and Removals Guidance and Standard and the Science Based Target Initiative's Forest, Land and Agriculture (FLAG) Guidance. See Calculation Methodology for details on how these emissions are calculated and categories included in scope of this goal

⁸Refer to our Climate Transition Plan for more information

⁹World Resource Institute’s Aqueduct water stress assessment tool is used to reconfirm high water-risk areas every three years. We continue to measure progress against our original 2025 goal and our extended 2030 goal. In 2022, an updated water risk assessment identified additional company-owned high water-risk facilities, which are in-scope for calculating progress against our 2030 goal only. The reported replenishment volumes for company-owned facilities are currently being capped at 100% per location. Once we achieve 100% for each company-owned location, we will start to then report progress of more than 100% replenishment at sites as applicable

¹⁰Contract manufacturers and co-packers are excluded. Our progress toward this goal relies in part on replenishment associated with high water-risk franchise bottler manufacturing facilities. We are working to integrate their data into future calculations

¹¹Goal tracks primary plastic packaging in PepsiCo’s key packaging markets. This scope represents more than 80% of PepsiCo’s 2024 global plastic packaging footprint (by weight)

¹² Goal tracks primary and secondary packaging in PepsiCo’s key packaging markets. This scope represents more than 85% of PepsiCo’s 2024 global packaging footprint (by weight). Reusable packaging must also be designed to be recyclable or compostable