Going 100 Percent Renewable in 2020, PepsiCo Pushes Ahead on Climate Action Plan

PepsiCo recently announced plans to power its direct U.S. operations with 100 percent renewable energy by the end of this year. That means mainstream products like Gatorade, Lay’s, Bubly, Pepsi and more will soon be powered with wind and solar energy. The company’s U.S. operations account for almost half of its total global electricity use.

“PepsiCo is pursuing 100 percent renewable electricity in the U.S. because the severe threat that climate change poses to the world demands faster and bolder action from all of us,” said Ramon Laguarta, chairman and CEO of PepsiCo.

PepsiCo building on past efforts

PepsiCo’s announcement builds on its past efforts, including the recent installment of solar panels at its global headquarters in Purchase, New York.

There are solar power installments at PepsiCo facilities across the U.S., with one example in Modesto, located in California’s Central Valley. In 2008, PepsiCo installed a solar energy system on the roof of that Frito-Lay plant. The same year, the company installed 54,000 square feet of solar concentrators on five acres of the same facility. Since that project, the Frito-Lay plant has become a keystone Near-Zero Emission Project for the state of California, which includes zero-emissions vehicles and forklifts, as well as new on-site energy storage systems.

PepsiCo’s efforts to install renewable electricity are not limited to the U.S. Nine countries in the company’s European direct operations meet 100 percent of their electricity needs from renewables. In 2016, the company’s Mexico Foods business started a power purchase agreement to source wind energy. By 2018, 76 percent of the PepsiCo Mexico Foods' electricity needs were met through wind energy.

And Mexico is not the company’s only Latin American operations to use renewable energy. Another facility in San Pedro Sula, Honduras, uses a 3-megawatt solar rooftop display to offset 20 percent of its power use. It was the largest rooftop photovoltaic system in Latin America until 2015.

PepsiCo’s efforts to meet its renewable energy goals in the U.S. will mirror what it has already accomplished globally. The company will use power purchase agreements and virtual power purchase agreements, which finance the development of renewable energy projects, as well as renewable energy certificates (RECs). The company’s portfolio will have more renewable energy certificates in 2020, and by 2025 there will be more power purchase agreements and virtual power purchase agreements.

Focusing on renewables will help PepsiCo meet its emissions reduction goal

PepsiCo’s plans to power its U.S. operations with renewable energy will help it meet its goal to reduce greenhouse gas emissions by 20 percent across the value chain by 2030. Its shift to renewables will reduce greenhouse gas emissions from direct operations in the U.S. by 20 percent. Given that electricity generation in the U.S. accounts for 28 percent of greenhouse gas emissions, renewable energy is a smart focus.

PepsiCo seeks a more sustainable food system

PepsiCo says it's looking to help build a more sustainable food system, and renewable energy is a part of that plan. The company’s chief sustainability officer, Simon Lowden, said: “As an industry leader, we have a responsibility to help spur the use of renewable energy in the U.S., while encouraging the kind of systemic change that can build a more sustainable food system.”

Other aspects of building a more sustainable food system include what it terms a “next generation” agriculture strategy. One aspect of that strategy is the Sustainable Farming Program Continuous Improvement Process, described as “a cyclical process geared towards assessing and then addressing sustainability opportunities at the farm level within PepsiCo’s agricultural supply chain.” It requires traceability. Each supplier must be able to the farms it sourced from.

PepsiCo is doing better than its biggest rival to reduce emissions

The company’s rival, Coca-Cola, proclaims it is “committed to making changes in our operations to reduce our climate impact.” Yet the company seems to not be doing as well as PepsiCo is to reduce its emissions, as it admits on its website that it is “off-track” and its greenhouse gas emissions are 10 to 15 percent higher than its 2004 baseline. The beverage giant attributes the growth in emissions to volume growth outpacing emission ratio improvements and insourcing of external manufacturing processes.

Last week marked a busy week for climate action announcements by various industry leaders. Visa achieved its 100 percent renewable power goal, while Microsoft announced it would strive to become “carbon negative” by 2030.

Image credit: PepsiCo