‘The world has changed’: PepsiCo CSO explains sustainability goal reset

With many corporate sustainability commitments coming due in 2025, a growing chorus of companies is revisiting and altering goals. Some quietly make the changes without detailed explanation. But PepsiCo is publicly discussing what prompted it to recently revamp some of its sustainability targets in packaging, emissions and other areas, including the decision to sunset certain goals.

The changes don’t mean the consumer packaged goods company is lessening its sustainability focus; rather, it’s evolving its strategy to keep up with changing times, according to Chief Sustainability Officer Jim Andrew.

Since announcing the PepsiCo Positive (pep+) sustainability program in 2021, “We’ve learned a lot, and the world has changed a lot, and so we wanted to incorporate those learnings and those external realities into any changes that we’ve made,” said Andrew, who has served as CSO since 2020.

He notes that three main principles underlie Pepsi’s sustainability goals revamp: transparency, pragmatism and focusing on where the company could have maximum impact. In addition, “we want to stay grounded in the science,” Andrew said. “Again, the world is a different place, so we’ve tried to incorporate that, as well as business growth.”

The shift has also caused some blowback. Environmental and advocacy groups including Oceana and As You Sow expressed disappointment with what they say is Pepsi’s pullback on environmental commitments, such as by retiring a previous target for reusable packaging and weakening the goal to reduce virgin plastic use by 20%. AYS says Pepsi made the previous commitments after the advocacy group filed shareholder proposals for those measures, which it subsequently withdrew.

“I don’t have a specific response to any individual group. We do engage with them. We take all feedback seriously,” Andrew said. “We remain committed to transparency and to engagement. But at the same time, there’s a number of challenges.”

In a conversation with Food Dive’s sister publication Packaging Dive, Andrew detailed those challenges and what else factored into the CPG’s goal-setting process, as well as lessons learned along the way.

This interview has been edited for length and clarity.

PACKAGING DIVE: PepsiCo isn’t the only company that has reset sustainability goals recently, but not all others are detailing the why and the how. Talk more about what went into this decision.

JIM ANDREW: Our climate goals are now fully aligned with the 1.5 degrees Celsius trajectory, which they weren’t before. The scope 1 and 2 was, but the scope 3 was “well below” — that’s the SBTi classification — well below 2 degrees.

We, as a food company, had to break scope 3 into FLAG — forest, land and agriculture emissions — and E&I — energy and industry emissions. And we said, you know, as we do it, let’s make all of them aligned with 1.5 degrees Celsius. I was talking with a number of stakeholders ahead of time, and took them through the goals and the changes we were going to make, and a number of them said that’s the single most important thing out of everything. Because ultimately, that’s still part of the Paris Agreement: net zero by 2050.

Scope 1 and 2 we’ve actually made quite good progress on from our baseline year [2015] to 2024, but scope 3 we’ve made much less progress on. The reason is that requires system changes literally across the world. We participate in business in 200 countries and territories, us and our franchise bottlers, and we need the systems we are parts of to change. These are very large, very complex things.

If you’re going to have increased amounts of recycled plastics, you need collection, you need processing, you need enabling policy to be able to have that happen at scale, at pace. The world is pretty much aligned around 2050. And the rate at which those systems are changing, candidly, is less than we had hoped or anticipated when we were setting the first goals. Those were the things that went into it.

Pepsi noted external challenges to achieving its previous goals, including rules in countries such as India or China that held back the use of recycled PET in food-grade packaging. How do these external forces reshape your strategy?

Virtually everything we do, certainly in our primary packaging, is food contact, which is a very different level of challenge than non-food contact. It imposes a very stringent set of requirements.

India only passed laws allowing rPET for beverage packaging in 2023, and food packaging was added in 2024. And China still does not allow rPET inclusion in food-grade packaging at all. So those are two extremely large markets that either have just or still do not allow the incorporation of recycled material.

But it’s even larger than that. If you think about it state by state — or in some cases, municipality by municipality, or outside of the U.S., province by province or country by country — the laws, the infrastructure, the enabling mechanisms around recycling can be extremely different. They can be almost night and day.

You know, does a state have a deposit return scheme or an EPR system? Or does a country? Even if they have an EPR system, they’re frequently different. Is there collection? Is it organized collection or is it informal collection? Is there washing and processing capability for that recycled material once it’s available?

In 2020, if you think back to that time, there was a lot of discussion in all corners of society, not just companies, but NGOs, governments, civil society broadly, banks and financiers about how all these organizations and policies were going to increasingly get aligned to be able to support these transitions. Those things either haven’t happened or have happened much more slowly than we, and I think anybody, would have thought.

Describe in more depth the decision to sunset certain goals, such as reuse, as opposed to just extending their timeline.

We sunset our reuse goal, but then I’m going to tell you in the next sentence that we did not sunset our reuse goal. What we did was we changed it.

We had a quantitative reuse goal, which, yes, we sunset. We are still very focused on reusables. Again, this is an area where we’ve learned a lot since we set the goal. Significant, measurable progress is extremely difficult. There’s a number of reasons for that, not the least of which is there are multiple regulatory reporting frameworks that exist.

We want a goal that can be tracked, can be reported on. If I have a goal with a number and a date, I could do that. Where that’s not possible, we chose to sunset.

Reuse is a good example because there is no common definition. There are, in fact, multiple competing regulatory frameworks around it. And scaling reuse requires thinking about how do you make it the preferred, convenient and affordable choice for consumers?

That requires a system in a given geography that works, and that system really needs to be end to end. That requires not only the manufacturers, but logistics providers, retailers, food service or away-from-home outlets, policy and consumers all to be working towards a common goal — which generally will require a consistent regulatory framework to be put in place that’s appropriate for the specific products that are being talked about.

You need shared infrastructure policy that enables it, and then you need a lot of non-competitive collaboration. And in many cases you need standardization. Those things either haven’t happened or are happening very slowly.

We are working, in a number of cases, on reusable cups. For example, in Petaluma, California, we had a big project. We also have returnable bottles in 75-plus international markets. But to have a single, reportable, quantifiable number was just extremely difficult.

We will report qualitatively, because we think that actually will more accurately describe the complexity, unless and until some of these things happen and standardize the reporting. Second, we have a goal that is RCR — reusable, compostable or recyclable. That’s a quantitative goal, because we know how to measure it. Reuse remains a part of what we’re doing around our broader sustainable packaging strategy.

Regarding the regenerative agriculture side, where do you believe you can make the most impact? And what limitations have you encountered along the way that influenced your sustainable agriculture strategy?

Sort of the key three principles as we looked at it, be transparent, be pragmatic, align with the sustainability goals, the PepsiCo positive goals, with the business priorities, and then focus for maximum impact and stay grounded in science.

We looked at each of the goals, you know, we said, look, we do these goals because they will help us build a stronger, more resilient business and help us drive scalable positive impact. We’re a big company. We’re in 200 countries and territories, and what we want to do is things that are good for the business, and drive a big impact. And so that was sort of behind it all.

We said our goals are anchored in our business and what we need for long-term success. And we’ve made a lot of progress in a number of areas — significant progress in particular in regenerative agriculture and water stewardship, broadly, which is both efficiency and replenishment. And we’ve made positive strides on sustainable packaging and climate change. And again, the world’s a different place. So we’ve tried to incorporate that, as well as business growth.

That was really sort of the case with regenerative agriculture. We actually increased our goals there. We set more ambitious targets in our climate goal. So we went from 7 million acres of regenerative practices by 2030, to 10 million acres. And we also added a nature component around protect and restore. We do those things with farmers around the world. So how do we support them as they adopt those practices?

That’s a big increase. The reason behind it was we’ve learned a lot. We think we know what works well, what doesn’t. We’ve built teams, relationships, again, trust. So as we looked at it, we said, Okay, this is one where we feel both we can increase the goal, but then also broaden it to be more explicit around nature. Because we know that agricultural land both impacts and is impacted by biodiversity, water and nature.

You’ve mentioned several forces that influence your strategy, including policymakers and consumers. Does PepsiCo also take into account what competitors are doing on sustainability?

We try and be aware of all the various influences. And we take input from anybody.

Our strategies are the ones that are right for our business and for our goals and objectives. In most cases, we want to be one of the leaders in most goals. But again, it’s very difficult to get too far ahead of how fast the system is going to change.

We’ve talked about food packaging, considering Pepsi owns brands such as Lay’s, as well as beverage bottles and cans, which is what much of Pepsi’s packaging sustainability strategy centers on. How do you balance attention to the different business lines’ sustainability?

They’re both critical. They’re both central to our goals and what we’re doing.

Beverage packaging is rigid for the most part. It’s frequently a PET bottle or an aluminum can. Those materials and those recycling systems, if they exist — and again, in many places there’s little or no enabling policy and infrastructure — we’ve doubled the amount of recycled content that we’ve used in our North American business since 2020.

Most of our food is in flexible film, and that’s something the industry, NGOs, material suppliers, everyone knows is a much more complicated end-to-end system that needs to change all the way from collection to processing the materials and to the materials that work for our systems to provide food safety, to provide freshness, to provide quality. That whole ecosystem is much less developed than the one for our bottles and cans. But we’re spending a lot of time and effort on both of them.