Imagine the journey of a single potato chip—from farm to factory to your local store. Each step requires energy, creates emissions, and contributes to the carbon footprint of the global food system. For PepsiCo, with its portfolio of 23 billion-dollar brands including Pepsi, Lay's, and Gatorade, this adds up to a massive climate challenge. The company has pledged to achieve net-zero emissions by 2040, a goal that requires reimagining every aspect of its operations. This isn't just corporate responsibility—it's a fundamental transformation of how business gets done in a warming world.
Why a Chip Company Cares About Carbon
Climate Risks
According to PepsiCo's own reporting, climate change poses direct risks to their operations by impacting "the quantity and quality of agricultural raw materials available for our products, contribute to weather patterns that affect the operation of our facilities and supply chain and affect the availability and quality of water" 2 .
Business Resilience
For PepsiCo, tackling emissions is simultaneously an environmental imperative and a business survival strategy. The company sources crops from farms worldwide, and climate instability threatens the very foundation of its supply chain. This dual recognition of responsibility and risk has fueled PepsiCo's increasingly ambitious climate targets 1 7 .
The Three Scopes: Mapping a Carbon Footprint
To understand PepsiCo's challenge, we first need to understand how corporations measure their climate impact through three categories of emissions:
Scope 1
Direct emissions from company-owned facilities and vehicles
Scope 2
Indirect emissions from purchased electricity
Scope 3
All other indirect emissions across the value chain, from farm to consumer
The Scope 3 Challenge
What makes PepsiCo's challenge particularly daunting is that 93% of their total emissions fall into Scope 3 4 9 . This means the vast majority of their carbon footprint comes from activities outside their direct control—from how farmers grow crops to how consumers dispose of packaging.
The Ambitious Roadmap: From Pledges to Progress
The 2030 Milestone
The North Star: Net-Zero by 2040
In 2021, PepsiCo accelerated its timeline, pledging to achieve carbon neutrality across its entire value chain by 2040—a full decade earlier than called for in the Paris Agreement 1 7 .
By 2025, these targets were refined with SBTi validation to include:
- 50% reduction in Scope 1 and 2 emissions by 2030 (2022 baseline)
- 30% reduction in Scope 3 Forest, Land and Agriculture (FLAG) emissions
- 42% reduction in Scope 3 Energy and Industry (E&I) emissions 2
PepsiCo's Emissions Reduction Progress (2015 Baseline)
Cracking the Code: PepsiCo's Multi-Pronged Attack on Carbon
Achieving these ambitious targets requires a comprehensive strategy touching every part of the business. PepsiCo's approach centers on two pillars: mitigation (reducing GHG emissions) and adaptation (building resilience to climate impacts) 2 .
Revolutionizing Agriculture Through Regenerative Farming
As a company built on agricultural ingredients, PepsiCo has made sustainable farming a cornerstone of its climate strategy. The company is working to spread regenerative practices across 7 million acres of farmland by 2030 9 .
These practices include:
- Planting cover crops to improve soil health
- Adopting low- or no-till techniques to reduce soil disturbance
- Integrating livestock and increasing crop diversity 6
Progress in Regenerative Farming
Benefits of Regenerative Farming
- Reduces agricultural emissions
- Improves soil carbon sequestration
- Enhances water retention
- Increases resilience to climate extremes
- Supports biodiversity
The Circular Economy in Action: From Potato Peels to Fertilizer
One innovative example of PepsiCo's circular economy approach turns waste into worth. At its Walkers crisps factory in Leicester, UK, the company partnered with clean-tech firm CCm Technologies to transform potato peelings into low-carbon fertilizer 7 .
The Circular Process
Collect Waste
Potato waste is collected from the manufacturing process
Convert
CCm's carbon capture technology converts it into fertilizer
Return
This fertilizer is returned to farms growing potatoes for Walkers
Continue Cycle
The cycle continues, reducing waste and emissions simultaneously
This initiative exemplifies the circularity that PepsiCo is trying to build into its operations—where waste from one process becomes input for another, reducing both emissions and resource consumption 7 .
Decarbonizing Operations: Renewable Energy and Electric Fleets
For its direct operations, PepsiCo is focusing on two major initiatives:
Renewable Energy Transition
The company aims to source 100% renewable electricity across all company-owned operations by 2030 4 .
Progress:
Electric Vehicle Adoption
PepsiCo is rolling out 100 heavy-duty Tesla Semis for deliveries and had electric vehicles covering over 3 million zero-emission miles in 2023 3 4 .
This transition is crucial since distribution contributes significantly to their Scope 1 emissions 1 .
Impact:
100
Tesla Semis3M+
Zero-emission milesRethinking Packaging: The Plastic Problem
Packaging represents both an environmental challenge and emissions reduction opportunity. PepsiCo is working to:
Increase Recycled Materials
10% of packaging contained recycled plastic in 2023
Develop Reusable Formats
10% of drinks sold in reusable packages in 2023
Reduce Packaging Weight
Lightweighting and material reduction initiatives
PepsiCo's Sustainable Packaging Progress
| Initiative | 2023 Status | 2030 Goal |
|---|---|---|
| Recycled plastic use | 10% of packaging 3 | 50% of packaging 3 |
| Reusable packaging | 10% of beverages 3 | Not specified |
| RCBR* Packaging | 89% 3 | 100% |
| Virgin plastic reduction | 6% increase from 2020 (improved from 11% in 2022) 3 | Reduction target |
The Scientist's Toolkit: Key Technologies Driving Decarbonization
Data & Analytics
Monitoring and reporting systems to track progress and identify opportunities.
Measuring Progress: The Data Behind the Claims
Transparent reporting is crucial for holding companies accountable. PepsiCo discloses its emissions annually through platforms like CDP 1 . The data reveals both progress and challenges.
Emissions Breakdown by Scope
Progress Assessment
While PepsiCo reduced its absolute emissions by 5% from 2022 to 2023, the company acknowledges the difficulty of decoupling business growth from emissions 3 5 . Total GHG emissions in 2023 were approximately 58 million metric tons, a 4% reduction from 2015 but still a substantial footprint 3 .
The Road Ahead: Challenges and Opportunities
Scope 3 Complexity
With 93% of emissions coming from the value chain, PepsiCo's success depends on engaging and influencing thousands of suppliers and farmers 4 9 . The company has created programs like the Supplier Leadership on Climate Transition collaborative to equip suppliers with knowledge and resources to decarbonize 9 .
External Dependencies
PepsiCo's Climate Transition Plan acknowledges reliance on external enablers including decarbonization of electrical grids, supportive government policies, technology innovation, and market development for low-carbon fuels 2 .
Balancing Growth and Reduction
As Jim Andrew, PepsiCo's Chief Sustainability Officer, acknowledged: "Decoupling our business growth from our resource use is always going to be difficult but meeting our long-term targets is critical" 5 .
Investment Requirements
Transitioning to net-zero requires significant capital investment in new technologies, infrastructure upgrades, and supplier support programs, creating financial challenges alongside operational ones.
A Template for Corporate Climate Action
PepsiCo's journey offers valuable lessons for corporations worldwide. Their experience demonstrates that:
Science-based targets
Provide a crucial framework for ambitious climate action 9
Circular economy principles
Can turn waste into value while reducing emissions 7
Transparent reporting
Builds accountability and drives progress 1
While the path to net-zero remains challenging, PepsiCo's comprehensive approach—spanning agriculture, operations, packaging, and transportation—shows how major corporations can align business interests with planetary needs. As climate change increasingly disrupts global food systems, such transformations may well determine which companies thrive in the decades ahead.
The success of PepsiCo's ambitious pledge will depend not just on their internal efforts but on creating ecosystems of change—engaging suppliers, consumers, policymakers, and innovators in the collective mission to build a more sustainable food system 2 7 .