By Jeff YoungShareNewsweek is a Trust Project memberPepsiCo, the food and beverage giant, took some fizz out of corporate sustainability goals this summer when it announced major changes to its targets to reduce greenhouse gas emissions and plastic packaging waste.
PepsiCo moved its net-zero emissions deadline by a decade, extending it from 2040 to 2050, while also softening some of its near-term targets on emissions from along its supply chain, what are known as Scope 3 emissions.
The company also pared back some commitments on plastic packaging, doing away with an ambitious goal for reusable containers and weakening a target for the percentage of recycled content in plastic packaging.
PepsiCo Executive Vice President and Chief Sustainability Officer Jim Andrew said the changes came amid a realization that the company was not able “to move our system faster than the world is moving.” Andrew told Newsweek that as expected international action on climate and plastic waste failed to materialize, the company’s goals looked farther out of reach.
“The tailwinds have become headwinds in many cases,” Andrew said. While some goals have been postponed, he said, others have been strengthened to make the company’s emissions reductions align with science-based targets on track for the Paris Agreement’s 1.5-degree Celsius warming threshold.
In a conversation during the COP30 climate conference in Brazil, Andrew explained the reasoning behind the company’s changes, his commitment to transparency and why PepsiCo is investing in sustainable agriculture. This interview was edited for length and clarity.
Newsweek: I want to start with the criticism that PepsiCo took a few months ago when you decided to retreat a bit on climate goals and your plastic reduction goals. Briefly describe that and why PepsiCo went that route.
Jim Andrew: We started talking about our goals in 2020, 2021. And if you think about the world now and the world then, the world's a very different place. There were financial institutions that were going to mobilize trillions of dollars. There was going to be mandatory government reporting in multiple jurisdictions. There was going to be enabling legislation on things like a circular economy, all these things were being talked about. So, as we then looked in late 2024, we said, ‘Okay, what held, what didn't? And what have we learned?’
Many of the financial institutions have backed away. The legislation for any number of reasons hasn't been passed. Many fewer companies have actually started to meaningfully participate than one might have reasonably thought in 2020, 2021. So, we said having a climate goal for our Scope 3 [that is] lined up 10 years faster than the world is probably something we want to look at.
PepsiCo went from 2040 to 2050. PepsiCo also went to all three goals being 1.5 degree aligned, which they had not been before. So, we actually made it, I would argue, more aggressive, not less aggressive.
What you just described there—reassessing the goals, deciding how you could best achieve these things—do you think that is akin to what people have been calling a ‘pragmatic reset’? Was this PepsiCo's reset?
Well, again, I don't know if I would say it's a reset because a number of the goals got more aggressive. I would say it was us taking five years of learning [about] things we anticipated were going to happen but didn't happen.
Your Scope 3 is really dependent on system change. Scopes 1 and 2, where we had actually made good progress, are more in your control. Scope 3 is largely dependent on how quickly the systems change. Transport system, electrification, grid, agriculture, circular economy for packaging, right? Those are five big systems that only change when you talk structural change, cultural change, and those things are taking longer.
I would say it's a more holistic view because we want goals [that] we can get the organization lined up behind and focused around as opposed to bold proclamations that aren't anchored in anything.
You've mentioned Scope 3, the supply chain, being a huge part of your sustainability challenge, your emissions sources. How does your approach to agriculture play into that?
Well, people think of PepsiCo as a very large beverage company. And of course we are. But we're actually a much larger food company. We're roughly 60 percent food. We source large amounts of potatoes, oats, corn, wheat—about 50 major crops from about 60 major countries.
So, for us, successful agricultural systems are critical to our business. They're also critical to our Scope 3. But again, what we're trying to do, with any of the goals, is link them to things that will make the business more resilient, more sustainable, allow it to grow, but do it in a way that continues to lighten the environmental footprint and creates a sustainable situation.
We're in Brazil, so I'll give you a Brazilian example, called Project Oro. It's in the Cerrado, which is one of the most threatened biomes and also one of the most important. We're going to pay farmers to adopt certain practices. They help improve soil health, probably most fundamentally, but they also improve water retention generally. They improve biodiversity. The exact combination of things will be dependent on the specific farmer and the crops they're growing.
We need farmers to be successful. That's why we have agricultural goals because we need a resilient, successful, vibrant food system to simply have a business.
You're a beverage company, you're a food company, but those products come in packages and often they're plastic. Clarify for me how you changed your goals on reduction of use of virgin plastics, increasing use of reusable and recycled packaging, that sort of thing.
We take seriously our responsibility around the packaging, you know, what we can and can't control. And again, that was one of the areas [where] I would say systemic change has been far slower than we might have hoped. So yes, we did adjust our goals to focus them on key markets where we have substantial businesses for recycling. We extended the time frame a bit because, again, the infrastructure around waste collection, around recycling in many parts of the world and many parts of the U.S. is still not near where people might have thought it would have been when we first established the goals.
What we did do, and I think this is very important and sets us apart from a lot of our peers, is we kept a virgin plastic reduction. We have a goal to reduce the amount of virgin plastic that we use on average 2 percent a year between now and 2030. And there's a number of levers we're using to do that. We advocated for a legally binding global plastics treaty.
So again, that's one of the areas where we said, yes, some of the system change elements haven't gone as fast as we might have liked, and we are still going to have ambitious goals around virgin plastic reduction, as well as incorporating recycled content.
But it is less than what you had before.
It's 2035 now instead of 2030, yes, and it's focused on major markets. And yes, we did reduce the amount of recycled content in the time frame. Again, because we are limited in many cases by supply at the scale and the cost that makes it viable. And that's a system-wide problem in many countries around the world.
I appreciate what you're saying. But I'll be honest, a lot of people are going to read this and say to themselves, ‘This sounds like a cop-out.’ You're saying, ‘It's a system-wide problem.’ But you're a major multinational corporation. If you can't do something in this situation, well, who can?
Which is why we advocate and we invest and we continue to drive forward against a very ambitious set of goals. But yes, the system changes are necessary to be able for the world to make the progress at the rate that we would like.
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