Challenge: Building greater understanding
As a global food and beverage brand operating in 200 countries, PepsiCo understands that greenhouse gas emissions lie not only within its own operations but are also embedded in products throughout its global supply chain. A high proportion of these supply chain greenhouse gas emissions come from PepsiCo’s agricultural suppliers. They are therefore a critical supplier audience to engage with as part of the company’s efforts to tackle climate change.
Solution: A collaborative approach
Having access to high quality information from within the supply chain is an important step in managing climate change impact. PepsiCo already reported greenhouse gas emissions and other climate change information from across its operations to CDP. To further increase knowledge of its supply chain, the company became a member of the CDP Supply Chain Program.
In 2009 PepsiCo approached a number of agricultural suppliers from both the UK and continental Europe and asked that they report to them, through the CDP process, on their greenhouse gas emissions and climate change strategies.
Selecting which agricultural suppliers to begin to engage with on the issue of climate change was the first stage of the process. This selection was based on a representative mixture of capability; there were a wide range of suppliers of different company sizes chosen, all with differing levels of understanding on the issue of sustainability and carbon emissions. Suppliers ranged from family farms with no dedicated sustainability expertise to agricultural businesses with technical headcounts that were allocated to the task.
Mark Pettigrew, Agricultural Sustainability Manager at PepsiCo, said: “We needed to further our knowledge of how suppliers were addressing climate change. Involvement with the CDP Supply Chain Program means we are able to build a better understanding of our corporate carbon footprint and the level of climate change risk within our supply chain.”
Results: Sharing best practice and growing awareness
A key element of the CDP process is the opportunity to share learning and best practice on the measuring and reporting of climate change. PepsiCo took a candid approach in assisting suppliers; sharing information about their own learning curve and helping them to build connections. The CDP Supply Chain process ignited a discussion that energised all suppliers; they contributed with their own views and ideas and began to seriously analyse the impact of climate change on their business, often for the first time.
PepsiCo encouraged suppliers to be open in their responses and reflect the reality of their own ability to track carbon emissions and the risks and opportunities from climate change. The majority reacted positively to the experience - it has put many on a journey of greater awareness, giving them the opportunity to step back and consider the future, how risks and opportunities such as regulation may affect their business and what impact their company is having on climate change.
When visiting suppliers and analysing the CDP responses PepsiCo was surprised to learn that some, such as agricultural business Lantmannen, had a well developed sustainability program. PepsiCo is now able to apply many of the learning’s garnered from Lantmannen’s response to CDP to some of their other less sophisticated suppliers. It is this process of shared learning that is so critical in achieving success in tackling climate change. Learning best practice in environmental management techniques will have considerable associated time saving and cost benefits to PepsiCo suppliers as it enables them to advance more quickly through the early stages of development.
As well as these opportunities for shared learning, the CDP process allowed PepsiCo to view responses from a varity of agricultural suppliers, gathering its growers into a common agenda towards greater awareness, understanding and ultimately preparedness in tackling the issue of climate change.