Sustainability Governance

Governance as a Driver of performance

We believe strong governance is the foundation for delivering on our sustainability agenda. At PepsiCo, sustainability topics are integrated into, and not separate from, our business.

The Role of the Board of Directors

As stewards of PepsiCo, our Board plays an essential role in determining PepsiCo’s strategic priorities. The full Board considers sustainability issues an integral part of its business oversight, as sustainability topics are integrated into, and not separate from, our business strategy. To align with our sustainability agenda, in 2017, our Board created a Public Policy and Sustainability Committee. The Committee assists the rest of the Board in providing more focused oversight over the Company’s policies, programs and related risks that concern key public policy and sustainability matters. The Committee is comprised entirely of independent directors and reflects a mix of public policy, risk, international and science-related skills, qualifications and experience that are valuable to the Committee’s oversight over key public policy and sustainability matters.

The Role of PepsiCo's Senior Leadership

In 2016, we reviewed our sustainability governance structure to identify opportunities to strengthen the integration of sustainability into our business agenda and processes. Beginning in 2017, PepsiCo's senior leadership team, made up of the Chairman & CEO, Sector CEOs and top functional leaders, assumed direct oversight of the sustainability agenda, strategic decisions and champions performance management. This ensures that sustainability is a key accountability factor for every member of our senior leadership team. Placing sustainability accountability within the company’s most senior leaders reflects the emphasis we place on achieving our sustainability agenda.

Strategy and progress against our sustainability goals are discussed during meetings of the full senior leadership team on a regular basis, providing opportunities for our senior leadership to align on major strategic issues relating to sustainability. In between these meetings, senior leadership team members remain actively engaged in executing against our sustainability goals, driving the agenda with their teams.

To help drive progress, we award our executive officers annual incentives for achieving key business and individual objectives against pre-approved targets. The business objectives reflect a combination of Company-wide performance or business-unit performance depending on the executive’s position and scope of responsibility. Individual objectives are based on an executive’s contribution to PepsiCo’s strategic business imperatives, such as:

  • Driving sustainable innovation;
  • Improving operating efficiencies;
  • Increasing customer satisfaction; and
  • Developing a diverse and talented workforce.

Leadership Across PepsiCo

PepsiCo's senior leadership team has empowered selected leaders within the company to create and oversee global strategy and execution for each of our sustainability goals. These leaders, who were selected for their deep knowledge of the goals they are directing, work with teams comprised of representatives from key functions and all geographic sectors to ensure successful implementation of processes across our businesses.

Sustainability Office

PepsiCo's Global Sustainability Office drives governance and delivery of the company’s sustainability agenda across the value chain. Serving as the key central connection point, the Sustainability Office works closely with leaders from across the business to ensure continued performance progress against our sustainability agenda. The Sustainability Office also plays a key role in bringing a sustainability lens to long-term corporate strategic planning and key business processes, ensuring that sustainability is always embedded into the fabric of what we do as a company.

Another key role of the Sustainability Office is managing the integrity of the data on which we report. Data integrity is absolutely vital to maintaining the trust between PepsiCo and our stakeholders, and is aligned with the high internal standards to which we hold ourselves.

A dedicated team within the Sustainability Office has developed a robust data governance structure underpinning each of our sustainability goals, ensuring accuracy, consistency, and precision of the data, while driving accountability among our teams. Data Governance includes documenting the processes and methodologies we use to gather and process data to ensure consistency and repeatability. By accumulating year-over-year metrics we are able to track progress, identify trends, and activate course corrections if needed. In addition, we continue to build capability to increase confidence in not only our internal data, but data collected throughout our supply chain, as we develop new tracking tools and methodologies in areas previously not measured. We believe this work is the critical foundation for the transparency and data integrity that we strive for in our reporting processes.