PepsiCo is sugar-coating its “refined” environmental targets and it’s a bitter pill to swallow – especially for those leading its sustainability efforts. By David Burrows.
“My entire life is about trade-offs,” the sustainability director at a food manufacturer told me last week. We were talking about packaging – where there are never-ending tightropes to walk for food and drink firms. But his comments chimed with everything that’s going on with targets currently – from carbon and water to regenerative agriculture and plastic.
Are we going backwards – a “watering down” as campaigners would put it – as companies including Unilever and now PepsiCo adjust their ESG ambitions? Or is this just the stark realisation that corporate sustainability strategies were spread too thin?
There is plenty of evidence that CSOs are stressed. Plates are spinning but it’s the human beings underneath them that are in danger of cracking. “You are up against it as a CSO, facing a hundred arguments from CEOs, CFOs and CMOs about why not to push ahead, so you need to choose your battles,” Dax Lovegrove told me recently.
Lovegrove, a man I have worked with, has been in corporate sustainability at board level for more than 20 years, his CV sparkling with roles including CSO at Swarovski, director of sustainability at Kingsfisher, Jimmy Choo and Versace. He is cool, calm and collected – which is exactly what you need in the current climate. “There is very little fun being had out there,” said Susan Thomas, former director for sustainability at Asda and who is now, like Lovegrove, an independent consultant.
Indeed, no sustainability lead worth their salt would want to sugar-coat what amounts to a slip in sustainability targets but that is exactly what some are being asked to do. Unilever has been heavily criticised for reshaping its ESG ambitions. In late May, PepsiCo joined them.
“By refining its pep+ (PepsiCo Positive) climate, packaging, agriculture, and water goals, PepsiCo is further aligning resources with core business priorities, building on learnings and progress, and helping its sustainability ambitions remain actionable and achievable,” said the owner of Doritos, Quaker Oats, 7Up and Pepsi.
This means pulling back on packaging targets and pushing out net-zero deadlines. Monday’s Package covered off the curtailing of reuse targets and lower ambitions regarding recycled content; while on carbon the targeted scope 1 and 2 emissions reduction is now 50% rather than 75% by 2030, though the baseline has been adjusted too. The target remains SBTi 1.5°C aligned, as does the new one for scope 3, despite being 30% rather than 40% for the dominant ‘FLAG’ part of the emissions pie (again the baseline has been changed). What this means in terms of tonnes of greenhouse gas will no doubt come out in the wash very soon.
As will the move to accelerate things when it comes to the company’s regenerative agriculture push. Instead of 7 million acres adopting regenerative practices, the new target is for 10 million, including “regenerative acres (already planned) and incremental protect and restore acres”. The definitions and what this means for progress will be dug into in time. For now, the NewClimate Institute said this of PespiCo’s promise in its new ‘Agri-food corporate climate responsibility monitor’: “The company describes that it wants to increase the use of regenerative agriculture in its value chain, but it is not clear how this will contribute to deep and structural emission reductions. We found limited evidence for commitments to transitions necessary for a 1.5°C-aligned food and agriculture sector.”
Unpacking the commitments corporates make on climate, packaging or sourcing is not easy – even less so when the goalposts shift, the guardrails are under scrutiny and there is very little regulatory oversight. But CSOs are being forced into a corner. Strategy is renowned as the art of choosing what not to do. “Let’s be clear up front that on environmental and social issues, choosing what not to do is difficult,” writes Alison Taylor in her book Higher Ground: How business can do the right thing in a turbulent world. As the clinical associate professor at NYU Stern School of Business in the US also notes: “In a feverish atmosphere where polarisation and misinformation flourish, there is no avoidable way to avoid criticism, please all stakeholders, and manage reputational risk. It’s time to seek firmer footing.” Whether this is to found on regenerative soils, we don’t yet know.
