Water stewardship is among the most important strategic initiatives we have as a company. It is a critical resource for our business, at all points along our value chain – from the farms where we grow the fruits, vegetables and grains that make up our product portfolio, to our manufacturing processes where water is used to ensure we meet the highest quality food safety standard, and as one of the key ingredients in many of our products. PepsiCo’s business depends on water, and as such, we have a vested interest in conserving and protecting it.
We believe that water is also a fundamental human right, indispensable to every community around the world. With over 2 billion people living in countries experiencing high water stress, including people in communities where we operate, there is a strong imperative for companies like PepsiCo to deploy their expertise and resources to address this issue.
From the very beginning of our sustainability journey in 2006, water stewardship has been one of our top priorities. We knew then that our ability to manage water was inextricably linked to the success of our business and of the local communities where we operate. We were one of the first companies of our size to acknowledge water as a human right, and in order to do our part, we needed to take an integrated approach to watershed management, from improving water-use efficiency on farms and in manufacturing facilities, to replenishing local water in the regions that are most at risk and where we operate, to increasing safe water access for the most vulnerable. We have learned from our efforts of the last decade and consulted with partners and independent experts to inform the water stewardship goals that went into our 2025 sustainability agenda. As a result, we have significantly raised the bar from our first set of sustainability goals. Our 2025 sustainability goals are more comprehensive in their scope and focused on a holistic view of our value chain and the watersheds where we operate.
We have set a number of interconnected goals that aim to contribute to our Positive Water Impact – meaning our efforts and partnerships will be designed to enable long-term, sustainable water security for our business and others who depend on water availability. This robust view of water stewardship is espoused by organizations such as The Nature Conservancy and the World Wildlife Fund, and aligns with a number of the UN Sustainable Development Goals.
Improve water-use efficiency in agriculture
With approximately 70 percent of the world’s freshwater being used for agriculture, we know how critical it is to improve our water-use efficiency in our agricultural operations. As a company that depends on agricultural raw materials for our products, we place great importance on operating sustainably on the farm level when it comes to water management. For several years, PepsiCo has been working with growers through our global Sustainable Farming Program (SFP) (formerly the Sustainable Farming Initiative), and through local partnerships to drive efficiency in farmers’ fields around the world. For example, between 2015 and 2017 we have improved direct agriculture water use efficiency in our high-water risk regions by three percent.
Under our 2025 sustainability agenda, we have set a global goal to improve water-use efficiency in high water risk areas of our direct agricultural supply chain by 15 percent by 2025. This goal was established through a preliminary baseline that was modeled on irrigation practices with growers in high water risk areas. While this goal is very ambitious, we will work hard to achieve it by 2025 and are already making progress. This goal focuses on improving our water-use efficiency where the need is greatest, in high water risk locations, as defined by the World Resources Institute’s Aqueduct tool, a mapping device that helps institutions understand where and how water risks are developing globally.
To date, we have worked with water experts to establish the required processes and protocols, and have developed individual roadmaps in specific locations. In collaboration with the World Resources Institute, we undertook a study to evaluate our high-water risk crops, and we utilized the UN Food and Agriculture Organization’s (FAO) Cropwat 8 modelling tool to determine our baseline crop water footprint. We have gathered the baseline data and progress through the 2017 crop year from countries where we have direct crops in water-stressed regions. For each farmer group, we have calculated their baseline water opportunity and identified local goals and implementation plans. We expect these plans will benefit the farmers and the local communities by supporting more efficient water-use throughout the watershed where PepsiCo sources our crops. Many of these plans have the joint benefits of improving local watershed health, improving crop productivity, and mitigating and adapting to climate changes.
Work on the ground to make improvements on our water-use has included determining opportunities in targeted locations, developing phased plans against each of those opportunities, ensuring farmers have the correct equipment needed, and developing the plans to train farmers on the skills needed to execute against the goal. Some of the concrete ways we are working with farmers include helping them access more efficient irrigation equipment, supporting best practices for scheduling and maintenance, and enabling them to move from flood irrigation to more efficient methods, such as drip irrigation. This conversion in turn changes the way farmers apply nutrients, improving soil health, yields and crop quality. We have also created more than 100 demonstration farms around the world, many of which feature water use efficiency best practices and provide an opportunity to engage large numbers of farmers in touching and understanding innovation. We are increasingly promoting the use of cover crops, which improves soil health and water holding capacity. We will also explore new technologies and innovations that deliver improved water-use efficiency. Additionally, we are partnering with the University of Pretoria, based in South Africa, to establish a globally applicable pivot irrigation audit protocol that will let us improve our water efficiency.
Improve water use efficiency in direct operations
We continue to be focused on improving our water use efficiency in our manufacturing facilities, as we progress against our 2025 sustainability goal to achieve a 25 percent improvement in water use efficiency in direct operations, with a focus on manufacturing operations in high water risk areas. As of December 2018, PepsiCo has 76 locations defined by our internal water risk assessment process as being high water risk. These locations span 5 continents and 14 countries and account for more than a quarter of our company-owned production.
In 2018, we recorded an improvement of 5 percent in our water use efficiency rate per unit of production across all of our company-owned manufacturing locations compared to 2015. This improvement builds on the work that we have been focused on for the last decade, in which we improved water use efficiency per unit of production by 25 percent through 2015, against a baseline of 2006 in our legacy operations.
We are focused on capturing efficiencies through a variety of methods, including placing increased emphasis behind our Resource Conservation (ReCon) program, uncovering and sharing best practices in operational efficiency from the program across our locations globally. Additionally, PepsiCo is working on developing and deploying leading technologies in its operations aimed at improving water use efficiency. We do this through design improvements in our manufacturing processes and by looking downstream at enhanced wastewater treatment systems and recovery technology for water reuse. Technologies such as Minimal-Liquid Discharge (MLD) systems, membrane bioreactor (MBR) systems, reverse osmosis (RO) systems and Closed Circuit Desalination (CCD) systems are advanced technologies that we deploy to drive progress around water quality and efficiency. For example, in several of our snacks facilities in Mexico, we have installed membrane bioreactors coupled with RO wastewater treatment technology that enables water reuse and helps to deliver greater water use efficiency. We currently employ membrane technology in Mexico, India, Belgium, Chile, Colombia, and the U.S., and are actively investing in more locations.
While we focus on maximizing efficiency of the water we use in our agricultural and manufacturing operations, creating a healthier watershed also requires that we give back water that we have consumed. This is critical to the continuity of our business, our license to operate, and the health of our communities. That is why we have set a goal to replenish 100 percent of the water we consume in manufacturing operations located in high-water risk areas by 2025, and ensure that such replenishment takes place in the same watershed where the extraction has occurred.
Our Replenishment goal is focused specifically on high-water risk areas where we operate and where the need is greatest. In 2018, we replenished more than 1.1 billion liters of water through projects in in Brazil, Guatemala, India, Mexico, and the United States. In India, completed projects have over-delivered on our replenishment targets, reflecting strong local programs to reduce community water insecurity that have been in place for several years and which pre-date the launch of our global replenishment goal. Staying true to our goal of replenishing back to each of the high-risk watersheds we are drawing from, we have capped at 100 percent the reporting of benefits from projects that achieved more than 100 percent of their watershed targets. In 2018, we replenished 13 percent of the water we consumed in our company-owned manufacturing facilities in high risk watersheds. This represents a decrease from our 2017 performance, due in part to the conclusion of agricultural 'fallowing' projects that delivered valuable benefits for just one season. It is important to support projects that provide both local value and have sustained benefits. We expect to recoup replenishment progress through projects that come online in 2019 and 2020, along with the implementation of a broader North America-wide program plan.
Our methodology for calculating the volume of water consumed is based on the World Resources Institute's distinctions between water use and water consumption. Both our methodology and our replenishment activities are based on this context – that water withdrawals should be replenished when our activities result in a water loss to a high-risk watershed and that such replenishment should occur within the same watershed as where the loss of water occurs.
While we are redoubling our efforts on replenishment to achieve our 2025 sustainability goal, water stewardship and source water protection has been a foundational piece of PepsiCo’s water agenda since the early days of our sustainability program. We have made a significant impact in recent years in high water risk countries like India and Jordan, partnering with local organizations on projects like check dams, water harvesting, and recharge pond rejuvenation.
In the arid western United States, our team has partnered with The Nature Conservancy and others in the Salt and Verde Alliance, a partnership that brings together companies, farmers, communities, and other organizations with an interest in the Salt and Verde watersheds. By supporting varied on-farm practices, more efficient irrigation, and water-efficient crop conversions, PepsiCo kept over 300 million liters of water within the river system in 2018.
In 2018, we launched new projects in three new locations - the Dominican Republic, South Africa, and the United States:
- PepsiCo is one of the founding donors of the Greater Cape Town Water Fund in South Africa, a nature-based water savings solution that will improve water availability for the region and help prevent the threat of a Day Zero from happening again.
- In Texas, PepsiCo is supporting The Nature Conservancy’s management of the Cibolo Bluffs Preserve near San Antonio to safeguard Edwards aquifer that provides water for almost two million Central Texans.
- PepsiCo launched a new activity in the Dominican Republic, supporting conservation and agroforestry activities that will improve water security for the Santo Domingo region.
We plan to continue delivering against our goal by investing in projects in high-risk watersheds that improve the quantity and/or the quality of the water in the watershed. These include watershed protection projects like reforestation, wetlands rehabilitation, and aquifer recharge. We also support projects that enable water for productive use, such as rainwater harvesting, dam rehabilitation, and seasonal water storage. Our projects must reflect the input and support of the local community.
Access to safe water
Increasing access to safe water for vulnerable individuals is one of the most urgent challenges the world faces. From the early days of our sustainability program, addressing this challenge has been a priority for PepsiCo. Since 2006, through partnerships funded by the PepsiCo Foundation, we have provided access to safe water to more than 22 million people as of the end of 2018. By 2025, we intend to help provide access to safe water to a total of 25 million people since 2006 in the world’s most at-water-risk areas, with a focus on communities near where PepsiCo works.
Access to safe water is a multi-faceted issue, and we are focused on achieving it at the watershed, community and household levels. With our partners, we work to implement sustainable solutions on the ground that:
- Make water more readily available, through market-based programs for household water connections and toilet installations, and/or renovation of pumps and pipes
- Better manage supply or volume of water, through water resource management, water basin restoration, and/or pollution reduction
- Ensure quality through water treatment, improved hygiene and community sanitation
Co-creation is critical to impactful partnerships, and PepsiCo is an active collaborator with our water partners. Each partner shares with PepsiCo the common goal of sustainable access to safe water for millions of people. Collectively, we seek to leverage the individual and unique strengths of PepsiCo, the PepsiCo Foundation and our partners to drive innovative, sustainable and comprehensive solutions to the crisis of water insecurity.
We will continue to enable long-term, sustainable water security for our business and others who depend on water availability by investing in the essential elements of a sustainable food system - helping to alleviate hunger, manage water and waste responsibly, and supporting women as champions of nutrition from farm to family. By doing this, we feed potential - one community at a time.
Advocacy for improved water security
Having a positive water impact means improving water security not just within our four walls, but out in the watersheds in which we operate. We know we can make a significant impact in water stewardship through the actions we take across our value chain, but we also have opportunities to help mitigate water insecurity on a broader level, through advocacy. We are supporting collaborative efforts to address water risk and mitigate water insecurity where they exist and creating them where they don't. We do this in three ways: by advocating for the adoption of smart water policies and regulations, by sharing information and best practices with water stakeholders, and by public education and training for consumers and communities.
In 2018, PepsiCo joined the Alliance for Water Stewardship (AWS). We aim to adopt the AWS standard at our high-water risk facilities and will utilize the standard as a vehicle for advocacy helping ensure that freshwater resources in high water risk locations are available for all water stakeholders.
PepsiCo is an active member of the 2030 Water Resources Group (WRG) and is represented on the Governing Council. The 2030 WRG is a public-private collaboration hosted by the World Bank that stimulates open dialogue about water management and develops proposals to help improve the management of water resources in the country. 2030 WRG is active in a number of key PepsiCo markets including India, Mexico, and South Africa.
Another collaborative effort is taking place across Latin America, through a public-private partnership between PepsiCo, the PepsiCo Foundation and the Inter-American Development Bank (IDB). The PepsiCo Foundation and the IDB teamed up in 2014 to address the mismatch between water supply and demand with Hydro-BID, a ground-breaking water resource data management and modeling tool that estimates the availability of freshwater in water-scarce regions, giving municipalities the ability to better govern water resources. To date, HydroBID has been implemented in Argentina, Brazil, Ecuador, Guatemala, and Peru, and is currently being implemented in Mexico, Paraguay, and Panama. All country implementations involve building the capacity of the local staff through: (i) providing hands-on training in HydroBID and other tools related to IWRM to hydrologists and other technical staff who will oversee the modeling; (ii) the hydrological database that includes the Analytical Hydrography Data set (AHD); and (iii) providing training for the use of the new modules for specialized analysis (e.g. reservoir, sediments, and groundwater) of selected watersheds. Programs like these work because they are rooted in a deep understanding of the needs of local communities, and executed in collaboration with local partners. Hydro-BID is responding to the challenges faced by governments, water utilities, the private sector, and other water stakeholders related to lack of information, reliable data, and tools - helping us all plan and make better decisions for the sustainable management of water.