Approach

PepsiCo understands the societal concerns around pesticides and takes them seriously. In recognition of these concerns, evolving regulations, and the importance of responsible pesticide use to our business and stakeholders, we established a cross-functional Global Pesticide Council comprised of senior leaders across key functions to evaluate pesticide issues and direct the Company’s policies and programs. The work is structured around five key areas:

1. Pesticide usage
2. Risk assessment
3. Compliance with global regulations
4. External engagement
5. Internal governance & communication

The Council's mission is to ensure global compliance, anticipate changes in the marketplace, and take proactive steps to minimize pesticide-related risks. These include environmental and human health risks associated with the application of pesticides in agricultural production as well as food safety risks associated with our raw materials. We take account of the fact that pesticides are often highly regulated and routinely evaluated by expert government agencies in markets around the world, to address both environmental and human health aspects.

Sustainable Agriculture and Integrated Pest Management (IPM)

Our Global Sustainable Agriculture Policy sets standards of performance and expectations for growers across our diverse, global supply chains, including compliance with governmental laws, regulations, and industry standards, including appropriate use of pesticides. Our aim is to support sustainable practices that substitute and promote natural controls for some agrochemicals, foster ecosystem balance, reduce greenhouse gas emissions, and mitigate crop losses. Our policy also recognizes the risk of water pollution from pesticides and the need to responsibly manage water runoff from farms.

To implement our policy, PepsiCo sets specific performance goals on regenerative agriculture and sustainable sourcing of major agricultural raw materials backed by our global Sustainable Farming Program (SFP) or an equivalent program. The SFP is a comprehensive framework to gauge environmental, social, and economic impacts associated with our agricultural supply chain. The SFP Fundamental Principles and Scheme Rules are available on our web site and provide information on the overall framework as well as specific practices that PepsiCo expects our farmers to adopt, including measures to support safe, legal, and responsible use of pesticides and minimize agrochemical application through IPM.

PepsiCo has worked closely with our growers for years, and we have a strong heritage of partnering with experienced farmers who are responsible stewards of natural resources. The SFP has been successfully implemented across nearly 40 countries and with more than 3,800 audited farmers, from large agribusinesses to smallholder farms. Crops addressed through the program include key ingredients we source directly such as corn, oats, and potato among others. The assessments completed on our direct supply chain alone represent approximately 50% of our total agricultural supply chain by volume. Globally, as of 2021, over 90% of our direct-crop volume has been verified as sustainable, including 100% of the volume sourced from 30 countries¹.

SFP’s framework contains ten environmental, four social, and three economic sustainability topics, with detailed criteria and global standards for each. Under the environmental pillar, agrochemicals are one of the ten indicators, providing a platform through which PepsiCo gathers information on implementation of our principles of pesticide management. The agrochemical indicator includes seven principles, which we categorize in the following way:

Sustainable protection of crops against pests includes prevention and monitoring of pest problems, using pesticide control methods only when necessary, and targeting only the pests that can harm crops. IPM is an important tool for advancing these practices. The UN's Food and Agriculture Organization defines IPM as "the careful consideration of all available pest control techniques and subsequent integration of appropriate measures that discourage the development of pest populations and keep pesticides and other interventions to levels that are economically justified and reduce or minimize risks to human health and the environment. IPM emphasizes the growth of a healthy crop with the least possible disruption to agro-ecosystems and encourages natural pest control mechanisms."

Protecting Food Safety and Quality

PepsiCo has detailed internal programs and procedures for food safety. A summary of our policies, programs, and actions may be found here.

With respect to pesticides and other agrochemicals, PepsiCo’s growers and suppliers are required to follow our Global Supplier Code of Conduct and have pesticide management programs. A copy of our Global Raw Material Quality and Food Safety Policy is included in our contracts, which require suppliers to comply with all applicable rules and regulations. We have various programs over several years that involve pesticide audits and/or pesticide surveillance, including focused testing of raw materials for residues and implementing corrective actions where appropriate. We have a long-term program to work towards third party Good Agricultural Practice (GAP) certification for farmers globally, which includes details of pesticides used and their application. In the U.S. and Canada, 100% of our potato growers are GAP certified and in Europe 97% of our potato growers are GAP certified with plans for 2022 to get to 100%. This includes an annual independent third party audit at harvest time to a recognized scheme, which includes a detailed inspection of pesticide use on farm. Pilots are underway in other geographies and for additional crops including corn and oats in the U.S.

The legal limits for pesticide residues in commodities and finished products are governed by local laws and regulations, which cover products produced both conventionally as well as organically. These limits specify the allowable pesticide residue levels and reflect good agricultural practices (GAPs) and assure safety. Studies published by the U.S. Department of Agriculture (USDA) and by the European Food Safety Authority (EFSA) concluded that the vast majority of food consumed within the U.S. and the EU, respectively, is largely free of pesticide residues or contains residues that fall within legal limits.² For example, nearly 99% of food produced in the U.S. was compliant with federal pesticide residue limits, according to the USDA study.

PepsiCo is compliant with laws and regulations in countries where ingredients are grown and where products are sold. We are aware of concerns around occupational exposure to glyphosate, an herbicide used by farmers, including its use as a drying agent prior to crop harvesting. Glyphosate has been used by farmers around the world for more than 40 years because of its ability to control weeds and its safety profile, which has been vigorously tested and affirmed by numerous risk assessment authorities and independent expert panels.³ The U.S. Environmental Protection Agency (EPA) conducted a thorough review of the most up-to-date safety studies, and in January 2020 they reiterated their view that there are no risks of concern to human health when glyphosate is used in accordance with its current label.⁴ With respect to any residual glyphosate that may be found in food products, the trace amounts present no food safety concerns according to the standards set by, for example, U.S., Canadian, and European authorities.

Protecting Bees and Pollinators

We recognize the potential impact of pesticides, among other environmental stressors, on beneficial pollinators as an important issue within PepsiCo’s supply chain. With respect to the group of pesticides called neonicotinoids (neonics), our recent evaluation of the science indicates that significant advancements have been made in understanding the impact of neonics on pollinators, birds, and other organisms⁵, resulting in additional and ongoing regulatory scrutiny, including bans in some parts of the world.

In response to these developments, PepsiCo has established a Neonics Workgroup under our Global Pesticide Council to carry forward our due diligence on scientific and regulatory matters. We have engaged with a wide range of external stakeholders and enlisted external experts to conduct studies and broaden our understanding, including the potential for viable alternative approaches. We continue to implement our policies and programs, such as SFP, to address the use of all pesticides in our supply chains and minimize unintended impacts to pollinators.

Progress

Since launching the SFP Code in 2015, the program has enabled PepsiCo to obtain data and improved visibility into our agricultural supply chains, including the use of IPM. PepsiCo is engaging with our agriculture teams and growers to support development and implementation of IPM improvement programs, including making the business case for IPM and training on appropriate IPM based on the size and capability of the grower. Our goal is 100% compliance with our SFP Code globally, and we are using third-party verification to ensure that growers are employing the right practices, including IPM. While the impact of IPM on pesticide application will vary according to a complex set of factors, including crop type, region and climate, IPM helps reduce the amounts of pesticides used.

As part of PepsiCo’s efforts to promote IPM, we engage directly with farmers in our Demonstration (Demo) Farm Program. The program showcases practices that are leading to the commercialization of innovative ag-tech and the scaling of proven practices that lead to regenerative outcomes. By the end of 2021, we had 72 farms in the program globally. It enables the farmers we work with to share their firsthand experiences, which encourages broader adoption. In 2021 we worked with 20 different partners supporting different areas of regenerative agriculture practices such as agrochemical and water use efficiency, advancements in IPM and many aspects of precision farming. Our demonstration farms yield measurable outcomes and value for farmers, the environment, and the business, such as:

• In Thailand, we worked with the Department of Agriculture and other partners in 2021 to implement integrated pest and nutrient management and install drip irrigation systems on our demonstration farms, resulting in an average yield increase of 25% (on seven farms), a 23% carbon emissions reduction and a more than 40% reduction in water use in irrigation.
• In 28 demonstration farms in India, we saw average yield improvements of almost 7% and reduced GHG emissions by more than 7%, resulting in farmer income increase of $55 per acre on average.

We have also teamed up with agro-tech companies such as AgroScout to pilot precision agriculture programs for more efficient and targeted use of pesticides. For example, we are using drone technology and an integrated machine learning platform in Latin America. The technology improves scouting coverage and accuracy, reduces the amounts of pesticides needed for spraying, and improves crop production.

We have made progress in promoting responsible use of pesticides and implementing our food safety programs, yet we also face challenges:

Strategic partnerships

PepsiCo actively engages with multi-stakeholder groups, peer companies, and NGOs to develop, promote, and adopt best practices related to responsible use of pesticides. We participate in a range of collaborative programs that focus on regenerative and sustainable agriculture generally and pesticide use specifically. These include Field to Market, The Sustainability Consortium, Honeybee Health Coalition, and the Sustainable Agriculture Initiative Platform, among others. These platforms allow collaboration and dialogue with peer companies, growers, and other critical stakeholders to better understand established and emerging best practices related to pesticide use and disclosure thereof and help drive industry-wide progress and solutions.

What's next?

PepsiCo’s Global Pesticide Council is continuing to prioritize and govern PepsiCo pesticide programs in order to ensure global compliance and minimize pesticide related risks. To achieve our goals, PepsiCo’s Global Pesticide Council has developed a five-year strategic plan with clear deliverables, including industry benchmarking, and centralized global scientific and regulatory tracking. Among our goals, we continue to engage externally and in new and more robust educational opportunities for our staff and management and continue our program to investigate potential biologic or other alternatives. We have significantly expanded our supplier management programs and continue to review expansion thereof as appropriate to our business. We will review and update our strategic plan in 2022 as appropriate. In addition, the Council is currently conducting deep dives to better understand consumer concerns about pesticides and overseeing targeted ingredient testing programs.