ESG Topics A-Z
Sustainability governance

To PepsiCo:
Robust sustainability governance helps PepsiCo clearly define our ambitions and establish the structures and processes that help us achieve them. It also helps us to continue to position ourselves to achieve our goals and navigate the risks and opportunities sustainability issues present.
To the World:
We recognize that our sustainability strategy and performance can inform decision-making among external stakeholders. A strong sustainability governance program increases accountability and transparency, allows public trust in our results and helps us to achieve the social and environmental outcomes our stakeholders expect.
Approach
We believe strong governance is the foundation for delivering on our pep+ (PepsiCo Positive) agenda. At PepsiCo, our sustainability approach is integrated into—not separate from—our business. Our governance reflects this approach, with an integrated structure that combines Board and senior leadership oversight with the subject-matter and localized expertise that informs our strategy and how we execute it.
Board of directors
The full Board considers sustainability issues to be an integral part of its business strategy oversight. Throughout the year, the Board and the relevant Committees receive updates from and discuss with management sustainability, human capital management, including diversity, equity and inclusion, and public policy matters, including the company’s key programs and related goals on these topics and progress toward achieving those goals.
To assist the Board in its oversight and to align with our sustainability agenda, 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, equity and inclusion matters. The Committee assists the Board in reviewing and monitoring key programs, policies and initiatives related to key sustainability, diversity, equity and inclusion and public policy matters. In addition, the Committee reviews PepsiCo’s sustainability programs and goals and monitors our progress toward achieving such goals.
The Sustainability, Diversity and Public Policy 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 business 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 and receive updates regularly. 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 reviewed each month during meetings of the Sustainability Committee—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 and keep sustainability in focus among competing priorities. In between these meetings, senior leadership team members remain actively engaged in executing our sustainability goals.
Our executive officers have certain annual strategic objectives that are aligned with the achievement of our long-term sustainability agenda, generally tailored to each executive’s role and scope of responsibilities, including water, climate and social sustainability matters. Performance against these objectives is evaluated for each executive officer, in conjunction with individual contributions to broader strategic business imperatives, impacting the payout of the annual incentive award.
Global Sustainability office
PepsiCo's Global Sustainability Office, led by the company’s Chief Sustainability Officer, who reports directly to the CEO, is charged with coordinating and informing the company’s sustainability agenda across our value chain. Serving as the central connection point, the Sustainability Office works closely with leaders from across the business to drive continued progress against our sustainability agenda and embed sustainability into our long-term strategic planning.
The Sustainability Office is also responsible for collection and management of sustainability data. Data integrity is vital to maintaining trust with our stakeholders, 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 seek to ensure accuracy and consistency of our data while driving accountability among our teams, see ESG data governance.
Sector sustainability offices
In addition to the Global Sustainability Office, each sector within our business has its own Chief Sustainability Officer and sustainability team. These teams lead the execution of our pep+ strategy for their sector. Sector sustainability offices also respond to sustainability issues unique to their sector, address regional and local challenges and identify ways to interact with their specific stakeholders.
Progress
With the launch of pep+, we are taking 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 work to champion sustainability in our sectors and businesses. Sector leaders work closely with our Global Sustainability Office to ensure we harness our scale and have strong levels of coordination across the company and our businesses. Additionally, we continue to strengthen business engagement with and accountability for our pep+ strategy by hosting frequent education and immersion sessions with top leaders across key functions.
What's next?
We have an important opportunity to advance our pep+ 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.
Related topics
Last updated
June 29, 2023