Pepsico, Inc. · NASDAQ:PEP
Pepsico — ESG Presentation (June 2023)
74 slides from Pepsico's sustainability presentation, June 2023
Slide 1: PepsiCo Positive Ag Supplier Playbook
PepsiCo Positive Ag Supplier Playbook Version: June 2023
Slide 2: Table of Contents
Table of Contents ❑ Page 03 – 13: Introduction, Goals and Definitions ❑ Page 14 – 17: Step 1. Establish your goals ❑ Page 18 – 28: Step 2. Prepare an action plan ❑ Page 29 – 33: Step 3. Determine how to measure progress ❑ Page 34 – 35: Step 4. Activate your plan ❑ Page 36 – 39: Step 5. Monitor progr
Slide 3: Introduction
Introduction Welcome to the PepsiCo Positive Ag Supplier Playbook. We invite you to join us on this journey and are excited to work with you to implement regenerative farming in our shared supply chain. Determine Establish Your Prepare an how to Activate Your Monitor Goals Action Plan measure Plan p
Slide 4: Introduction – Understanding PepsiCo's Positive Agriculture Goals
Introduction – Understanding PepsiCo’s Positive Agriculture Goals PepsiCo’s impact-driven Positive Agriculture initiative is founded on three major goals – sustainable sourcing, regenerative agriculture, and improved livelihoods. We need all our suppliers working with us to achieve these goals. This
Slide 5: Introduction – Five dimensions of Regenerative Agriculture
Introduction – Five dimensions of Regenerative Agriculture RegenAg encourages best practices for farming and grazing that mitigate climate change by rebuilding soil organic matter and restoring degraded soil biodiversity—resulting in carbon drawdown and improvements to the water cycle and soil quali
Slide 6: PepsiCo's 2022 Key Ingredients
PepsiCo’s 2022 Key Ingredients 100% sustainably sourced While all sourced ingredients contribute to our Climate goals, PepsiCo will focus key ingredients on key ingredients to achieve Sustainably- Sourced and RegenAg goals by 2030. by 2030 7 million acres of land farmed Grower Sourced Supplier Sourc
Slide 7: Introduction – What PepsiCo Needs from Suppliers?
Introduction – What PepsiCo Needs from Suppliers? We need your help in achieving scaling of regenerative acres while impacting more than 250,000 livelihoods in our agricultural supply chain. No matter where you are in your Regen Ag journey, here’s what we need from you: What we need from you 1 2 3 T
Slide 8: Introduction – What is Regenerative Agriculture?
Introduction – What is Regenerative Agriculture? PepsiCo's new commitment to Positive Agriculture is a commitment to promote Regenerative Agriculture and Farmer Livelihoods to address long-term challenges and risks to planet, people, and PepsiCo. But what is Regenerative Agriculture? Regen Ag looks
Slide 9: Understanding the difference between Regen Ag and Sustainable Sourcing
Introduction – Understanding the difference between Regen Ag and Sustainable Sourcing You may already be helping PepsiCo in our 100% sustainably sourced initiative. We thank you for helping us achieve that goal! This Playbook will be primarily focused on the Regenerative Agriculture goal. But what’s
Slide 10: Rotation and edge of field and landscape table, accounting for acres
Rotation and edge of field and landscape table, accounting for acres Eligible for Eligible for Minimum Level of validation/ Regen Ag Acre climate reduction climate removal verification required* target target Impacts measured on production Self-assessment or 2nd party area producing ingredients Peps
Slide 11: Introduction – Creating Value through Regenerative Agriculture
Introduction – Creating Value through Regenerative Agriculture Regenerative farming only works when it makes economic sense and creates value in the short, medium, or long term across the entire agricultural supply chain. perspective perspective Where is the value in Regen Ag? Are there economic ben
Slide 12: Introduction – Creating Value through Regenerative Agriculture
Introduction – Creating Value through Regenerative Agriculture Implementing RegenAg practices creates value across the entire supply chain: Cost Control Other considerations • Increase Yield & Farm Income • You may not see improvements in the short term as benefits • Improve Quality will take time t
Slide 13: How can suppliers transition to Regenerative Agriculture?
How can suppliers transition to Regenerative Agriculture? The next slides will explain each of the steps and action points below in more detail. Establish Prepare an Determine Activate Monitor your goals action plan how to your plan progress measure Step 1 • Select pilot • Set your • Implement • Rev
Slide 14: How to Use This Document
How to Use This Document 1 Blue Banner pages are core Playbook slides. These contain basic guidance about In the yellow boxes, we highlight specifically implementing RegenAg. What we need from you, to make our request as clear as possible. 2 Green Banner pages in the middle of the document are our Q
Slide 15: Step 1: Establish your goals
Step 1: Establish your goals Which farm or supply shed should you start with? Establish your own Regen Ag goals Find the appropiate impact areas Establish your What do we goals need from you? • Select pilot farmer group Step 1 • Determine impact areas Register your project. Tell us: • Your impact ar
Slide 16: Select a pilot farmer group
Step 1: Establish your goals Goal Plan Measure Activate Report Select a pilot farmer group You may source from multiple supply sheds, and they may not all have the same set of needs or circumstances. Use this quick start guide to think about where to begin. Please note, this list is not exhaustive o
Slide 17: Determine Impact Areas
Step 1: Establish your goals Goal Plan Measure Activate Report Determine Impact Areas As you establish your own regenerative farming goals, consider both your customers’ needs and the context of your own business. Different impact areas may be appropriate depending on your crop, geography, or custom
Slide 18: Determine Impact Areas
Step 1: Establish your goals Goal Plan Measure Activate Report Determine Impact Areas To select at least two impact areas, focus on the issues that farmers in your supply chain face: Preferred Optional Carbon Watershed Improved Emissions & Soil Health Biodiversity OR OR OR Health livelihoods Sequest
Slide 19: Step 2: Prepare an action plan
Step 2: Prepare an action plan Choose your RegenAg practices ESA (Economic, Social, Agronomic) incentives Set your certification strategy Identify the resources, capabilities, and expertise needed Prepare an What do we need action plan from you? • Set your Regen Ag strategy Step 2 Register your proj
Slide 20: Set Your Strategy
Step 2: Prepare an action plan Goal Plan Measure Activate Report Set Your Strategy Now that you have identified which impact areas you will focus on and with which pilot group, it’s time to set your strategy. Choose your regenerative practices! The good news is, regenerative practices tend to positi
Slide 21: Choosing regenerative practices
Step 2: Prepare an action plan Goal Plan Measure Activate Report Choosing regenerative practices You may already feel comfortable to identify which regenerative practices will work best in your supply chain. You can use the RegenAg Practice Bank to support you if required. P A G E 2 1
Slide 22: Choosing your regenerative practices – A real life example in the US Midwest
Step 2: Prepare an action plan Goal Plan Measure Activate Report Choosing your regenerative practices – A real life example in the US Midwest In 2018, PepsiCo met with experts in the US farming system including farmers, suppliers, and peers, to understand what barriers to Regen Ag the region faced,
Slide 23: Set Your Strategy
Step 2: Prepare an action plan Goal Plan Measure Activate Report Set Your Strategy Create a strategy to engage farmers and empower them to implement regenerative farming practices. This will likely require a multi-pronged approach that includes economic, social, and agronomic tactics. Considerations
Slide 24: Economic incentives of Regen Ag
Step 2: Prepare an action plan Goal Plan Measure Activate Report Economic incentives of Regen AgE S A Regenerative agriculture must make economic sense for farmers, or they may be hesitant (or simply unable) to make the financial investment to implement these practices. Clarifying the economic value
Slide 25: Social incentives of Regen Ag
Step 2: Prepare an action plan Goal Plan Measure Activate Report Social incentives of Regen Ag E S A Each farming community is unique. Understanding the culture and social atmosphere of farmers in your supply chain is a key component in motivating them to implement regenerative agriculture and conne
Slide 26: Agronomic incentives of Regen Ag
Step 2: Prepare an action plan Goal Plan Measure Activate Report Agronomic incentives of Regen Ag E S A Empower farmers to implement regenerative farming by providing access to training on the practices they need to employ and the benefits they can expect to achieve. Recommendations Pitfalls • Under
Slide 27: Certification Strategy
Step 2: Prepare an action plan Goal Plan Measure Activate Report Certification Strategy Achieving a certification as part of your strategy can help you identify the critical issues farmers are facing and work towards your Regen Ag goals. Considerations: • When getting to know growers in your supply
Slide 28: Identify capabilities and resources needed
Step 2: Prepare an action plan Goal Plan Measure Activate Report Identify capabilities and resources needed Identify what resources, capabilities, and expertise you need to achieve your goals. Then, determine whether you have those items internally or need to source them externally. Considerations:
Slide 29: Identify capabilities and resources needed
Step 2: Prepare an action plan Goal Plan Measure Activate Report Identify capabilities and resources needed Your strategy comes alive when you identify the capabilities and resources needed to activate your program. As you identify the capabilities and resources you need, consider the following: 1 2
Slide 30: Step 3: Determine how to measure progress
Step 3: Determine how to measure progress Track and measure your progress Choose the right tool for your goals and your team Choose KPIs that allow consistent measurement Measure What do we Progress need from you? • Set KPI´s • Select Tools Step 3 • ‘engaged / regenerative Register your acres’ proje
Slide 31: Select Tools to Measure progress
Step 3: Measure Goal Plan Measure Activate Report Select Tools to Measure progress Establish clear and consistent processes to track and measure your progress against a timeline. Choose the right tool for your goals and your team. Considerations: What we need from you • Review the available tools th
Slide 32: Determine your Key Performance Indicators (KPIs)
Step 3: Measure Goal Plan Measure Activate Report Determine your Key Performance Indicators (KPIs) KPIs will help you track progress toward your impact areas and measure the outcomes of your new farming techniques. Use available tools (discussed on the previous page) to choose KPIs that allow for co
Slide 33: PepsiCo's Primary KPI for Regen Ag
Step 3: Measure Goal Plan Measure Activate Report PepsiCo´s Primary KPI for Regen Ag Note: Regen Acres is the goal and engaged is not necessary as a precursor. Workstreams that are mature may directly work on regenerative agriculture ie: impact results rather than counting practices. Once a farmer i
Slide 34: Approved Certifications for Engaged Acres
Step 3: Measure Goal Plan Measure Activate Report Approved Certifications for “Engaged Acres” PepsiCo recognizes several certifications that meet the “Engaged” acres requirement, and some additional certifications that may be recognized based on certain conditions. Impact measurement is needed to re
Slide 35: Step 4: Activate your plan
Step 4: Activate your plan Get pilot farmers started on their RegenAg journey Obtain feedback Be aware of any barriers Activate your What do we Plan need from you? • Implement your project or scale up Step 4 Register your project. Tell us: • Your Regen Ag plan P A G E 3 5
Slide 36: Activate your plan
Step 4: Activate your plan Goal Plan Measure Activate Report Activate your plan and get pilot farmers started on their Regen Ag journey! Be flexible and comprehensive to feedback. Remember to learn from your pilot experience so that you can continuously improve on future programs. Considerations: pe
Slide 37: Step 5: Monitor progress
Step 5: Monitor progress Register your RegenAg program Scale program to other farms Learn and iterate on your previous program Monitor What do we Progress need from you? • Review, refine, report Step 5 Report your progress annually P A G E 3 7
Slide 38: Reporting Tool
Step 5: Monitor progress Goal Plan Measure Activate Report Reporting Tool Be recognized for your success by sharing your news with both farmers and PepsiCo! Continue improving your programs based on farmer feedback to progress to the next milestone in your Regen Ag journey. Considerations: What we n
Slide 39: Scale program to other farms
Step 5: Monitor progress Goal Plan Measure Activate Report Scale program to other farms After finding success with a pilot location(s), determine a plan of action to begin rolling out your regenerative agriculture program(s) to more locations and/or developing additional programs while keeping in mi
Slide 40: Learning from and growing your RegenAg programs
Step 5: Monitor progress Goal Plan Measure Activate Report Learning from and growing your RegenAg programs Learn from your pilot programs and determine your plan of action to transform the remaining farming operations within your supply chain. Gap Assessment Expanded Farmer Pool Reflect on your prog
Slide 41: Quick Start Guides Workbook
Quick Start Guides Workbook TIP: The templates in this section are not designed for every blank space to be filled in. Use these pages to brainstorm as you see fit. P A G E 4 1
Slide 42: Quick Start Guide #1 – Get Started
Quick Start Guide #1 – Get Started OR OR OR OR OR Guiding questions Strong Opportunity to High-risk Relevant industry Farms already or multi- certified under • Do you have visibility into the supply relationships with make the greatest environmental *Others stakeholder Social Studies sheds that you
Slide 43: Quick Start Guide #2 – Set Your Priorities
Quick Start Guide #2 – Set Your Priorities The below guide is an opportunity to understand where you should prioritize your RegenAg efforts. If you’re unsure which impact areas are best, consider using a tool to determine your impact areas or discussing your options with your PepsiCo procurement tea
Slide 44: Quick Start Guide #3 – Set Your Strategy
Quick Start Guide #3 – Set Your Strategy Now that you have learned how to focus on your priorities, let’s apply that knowledge to set your strategy. Please follow the below guide to determine what strategy segment best fits the focus area goals you would like to achieve. Please select RegenAg practi
Slide 45: Quick Start Guide #3 – Set Your Strategy
Quick Start Guide #3 – Set Your Strategy Based on the RegenAg practices you chose for each impact area on the previous page, write down the varying strategy initiatives defined in the economic, social, and agronomic pages that you and your team will be using. Please select strategy initiatives and s
Slide 46: Quick Start Guide #4 – Identify Capabilities & Resources
Quick Start Guide #4 – Identify Capabilities & Resources Your strategy comes alive when you identify the capabilities and resources needed to activate your program. 1 2 3 Input: Defined Strategy Determine what type of specific Understand to what extent Describe what specific resources / Initiative &
Slide 47: Quick Start Guide #5 – Iterate & Approach
Quick Start Guide #5 – Iterate & Approach Learn from your pilot programs and determine your plan of action to transform the remaining farming operations within your supply chain. Gap Assessment Prioritized Focus Areas Guiding Question Response Guiding Question Response What practices/topics were not
Slide 48: Quick Start Guide #6 – Target & Roadmap
Quick Start Guide #6 – Target & Roadmap Learn from your pilot programs and determine your plan of action to transform the remaining farming operations within your supply chain. Expanded Farmer Pool 100% RegenAg Guiding Question Response Guiding Question Response Which farmers would be best to implem
Slide 49: Appendix
Appendix 1. Establish Your Goals 1.1 Additional Guidance for RegenAg Priority Setting 2. Prepare an Action Plan 2.1 Watershed Health 2.2 Biodiversity 2.3 External Funding and Grants 2.4 Partner Mapping: Who Can Help Us Succeed? 2.5 Regenerative Practices Bank 2.6 Regen Ag Practice Definitions 3. Det
Slide 50: Appendix 1.1 Additional Guidance for RegenAg Priority Setting
Appendix 1.1 Additional Guidance for RegenAg Priority Setting perspective Aim to positively impact these impact areas: PepsiCo asks suppliers to select 2 or more impact • Soil Health – building a healthier and more fertile soil areas to work on report and progress back to to support a productive and
Slide 51: Appendix 2.1 Watershed Health
Appendix 2.1 Watershed Health Watershed health examples: Water Challenge Description Severe Water Challenges Moderate Water Challenges No Water Challenges Quality of surface and groundwater in the Water bodies are not meeting their Growing concerns about the safety of No concerns about water quality
Slide 52: Appendix 2.2 Biodiversity
Appendix 2.2 Biodiversity Potential Local Requirements Biodiversity Assessment Best practice: assess the current biodiversity and identify priority actions to Country level agricultural policies are increasingly introducing biodiversity preserve / improve biodiversity on the farm conservation requir
Slide 53: Appendix 2.3 External Funding and Grants
Appendix 2.3 External Funding and Grants External funding can come from many sources. It’s important to have a clear sense of what the money will be used for and what return you are trying to achieve when applying for funding. Grants/Loans/Project Funding Sites Grants and loans typically have define
Slide 54: Appendix 2.4 Partner Mapping: Who Can Help Us Succeed?
Appendix 2.4 Partner Mapping: Who Can Help Us Succeed? Once you have identified your desired strategy and have determined whether you could benefit from a partnership, start looking for organizations, projects, and alliances you could work with to help you meet your goals. Co- Research Interview Sel
Slide 55: Appendix 2.5 Regenerative Practices Bank
Appendix 2.5 Regenerative Practices Bank Learn more about the RegenAg practices listed below by reading the RegenAg Practice Bank. Soil Cover • Cover crops (incl. nutrient-fixing cover Integrated • Application of livestock manure directly and/or post crops) Livestock composting • Maintain roots left
Slide 56: Appendix 2.6 RegenAg Practice Definitions
Appendix 2.6 RegenAg Practice Definitions Practice Concept Close-growing non-commodity crop that provides a surface cover of main crops during fallow periods. It provides soil protection, seeding protection, and soil improvement during this periods. After termination, Cover crop residues from cover
Slide 57: Appendix 3.1 Difference Between Engaged and Regenerative Acres
Appendix 3.1 Difference Between Engaged and Regenerative Acres Engaged Acres: Progress toward our Goal Our Goal: land approximately equal to PepsiCo’s entire agricultural footprint • We will count acres as engaged in regenerative agriculture when two or more locally appropriate • We will count acres
Slide 58: Appendix 3.1 Difference Between Engaged and Regenerative Acres
Appendix 3.1 Difference Between Engaged and Regenerative Acres To understand the difference between “Engaged” and “Regenerative” acres, think about where you are on your RegenAg journey. You may find that your starting point is closer to the desired state than you think. Regenerative Acres When the
Slide 59: Appendix 3.2 Regenerative Acres Measurement
Appendix 3.2 Regenerative Acres Measurement REGENERATIVE ACRES 1. Building Soil Measured improvement in indicators of soil health, including metrics / tools such as: Health and Regenerative Acres Fertility • Measured improvement in soil organic matter, soil carbon macro and micro-nutrients If two or
Slide 60: Appendix 3.2 Regenerative Acres Measurement
Appendix 3.2 Regenerative Acres Measurement REGENERATIVE ACRES Regenerative Acres 3. Protecting and Measured improvement in indicators of enhanced biodiversity, including metrics / tools such as:1 enhancing If two or more of the following biodiversity • High Conservation Value Assessment environment
Slide 61: Appendix 3.2 Regenerative Acres Measurement
Appendix 3.2 Regenerative Acres Measurement REGENERATIVE ACRES Regenerative Acres 5. Improving See Livelihoods Measurement Framework for complete details on metrics and data collection farmer methodology requirements If two or more of the following livelihoods environmental KPIs (to right) are Econo
Slide 62: Appendix 3.3 Tracking Tools
Appendix 3.3 Tracking Tools PepsiCo accepts data collected using the tools below to track the progress toward your selected goals. These tools include widely accepted KPIs and measurement techniques that will help PepsiCo gather accurate information from all suppliers. Building soil Sequestering car
Slide 63: Appendix 3.4 Selecting Your Tracking Tool(s)
Appendix 3.4 Selecting Your Tracking Tool(s) Use the tool matrix combined with your impact areas/resource capabilities to determine which tool(s) is/are best for your farmers. This is a living, non-exhaustive list that requires a two-way dialogue to keep the tools up-to-date with the ever-changing m
Slide 64: Appendix 3.5 Sampling Guidance for on-farm GHG Measurement
Appendix 3.5 Sampling Guidance for on-farm GHG Measurement This guidance has been developed to enable PepsiCo partners and suppliers to report on-farm greenhouse gas emissions reductions and sequestration to PepsiCo. The guidance may be updated as science-based industry norms and guidance become wid
Slide 65: Appendix 3.6 Livelihoods Framework
Appendix 3.6 Livelihoods Framework We encourage all programs to consider implementing an objective to improve livelihoods, leveraging our Livelihoods Measurement Framework to demonstrate improvement and contribute to our 2030 goal to improve livelihoods of more than 250,000 people in our agricultura
Slide 66: Appendix 3.6 Livelihoods Draft Framework
Appendix 3.6 Livelihoods Draft Framework (1) Profitability (Income) KEY CONCEPTS Relative Poverty Level Productivity (Yield) • The framework is a guide; it is not required to track all indicators in the framework Economic Soil Health • Indicators are classified into “Primary” and “Secondary” based o
Slide 67: Appendix 3.7 How to Demonstrate Improved Livelihoods
Appendix 3.7 How to Demonstrate Improved Livelihoods Measure progress against at least one Livelihood Improvement Metric from list below based on the relevancy to your farmers, crops, and region. Please reach out to your Procurement contact for more details. Profitability Number of producers with im
Slide 68: Appendix 3.8 Regenerative Agriculture Benefits
Appendix 3.8 Regenerative Agriculture Benefits Studies in the US (1) have found compelling evidence of improved financials and overall efficiencies from regenerative agriculture practices. Suppliers and growers should weigh both the potential risks and benefits when deciding which regenerative pract
Slide 69: Appendix 4.1 Case Study: US Row Crop
Region Crop Primary Tools Goals Appendix 4.1 Case Study: US Row Crop USA Row Crops Soil Health Carbon Cool Farm Tool & Field To Market Commodity Scaling The US Row Crop case study represents corn (the largest commodity), wheat, soy and other After the launch of the pilot among 90 farmers and tremend
Slide 70: Appendix 4.2 Case Study: Mexico Cane Sugar
Region Crop Primary Tools Goals Appendix 4.2 Case Study: Mexico Cane Sugar America Latin Cane Sugar Livelihoods Carbon Bonsucro Calculator Commodity Scaling This case study represents cane sugar in Mexico and the mills' owned plantations The smallholder certification program plans to scale smallhold
Slide 71: Appendix 4.3 Case Study: Mexico Wheat
Region Crop Primary Tools Goals Appendix 4.3 Case Study: Mexico Wheat Latin America Wheat Watershed Soil Health Cool Farm Tool Commodity cultural stakeholders in the region to increase familiarity with the project and build trust The Mexico Wheat case study represents wheat in central Mexico, reachi
Slide 72: Appendix 4.4 Case Study: Indonesian Palm
Region Crop Primary Tools Goals Appendix 4.4 Case Study: Indonesian Palm APAC Palm Oil Biodiversity Livelihoods Implementer’s proprietary tool Commodity projects under the wider strategy document. The local government of Aceh Tamiang This case study represents palm for palm oil production in Indones
Slide 73: Appendix 4.5 Case Study: Australia Maize
Region Crop Primary Tools Goals Appendix 4.5 Case Study: Australia Maize APAC Maize Soil Health Carbon Cool Farm Tool Commodity Scaling This case study represents maize (corn) grown in Australia. The program has expanded the number of farmers involved in the year 1 region and scaled into a second re
Slide 74: Appendix 4.6 Case Study: India Potato Irrigation
Appendix 4.6 Case Study: India Potato Region Crop Primary Goals Tools Data AMESA Potato Watershed comparison Irrigation Carbon against control Commodity (compared to flood), and (3) the up-front investment cost is a challenge in some areas This case study represents potatoes in India and covers 4ha