PepsiCo Inc. (NASDAQ:PEP) today announced that it has priced the company’s first ever Green Bond. The net proceeds from the US$1 billion Green Bond offering will fund a series of key initiatives to advance PepsiCo’s sustainability agenda. The company also announced that it has named PepsiCo leader Simon Lowden as its first Chief Sustainability Officer. In this new role, effective immediately, Lowden will be responsible for leading PepsiCo’s Sustainability Office, including the Global Sustainable Plastics team and Global Sustainable Operations team.
“PepsiCo is deeply committed to using our scale for good and advancing the purpose behind our sustainability agenda: to help build a more sustainable food system,” said Ramon Laguarta, PepsiCo Chairman and CEO. “Issuing a bond focused on environmental sustainability reflects our deep commitment to the priorities laid out in our recent Sustainability Report and represents another step in our plan to become a faster, stronger, better company. As Chief Sustainability Officer, Simon will play a critical role in this effort, and I am thrilled he has agreed to take on such an important responsibility.”
In September, PepsiCo released its 2018 Sustainability Report, which outlined six priority areas where the company believes it can make the best contribution – agriculture, water, packaging, products, climate and people – along with eight ambitious and measurable goals. The following eligible categories for the use of the Green Bonds net proceeds are aligned with these priorities and the U.N. Sustainable Development Goals (SDGs):
- Sustainable Plastics and Packaging: PepsiCo has a new target to reduce 35% of virgin plastic content across its beverage portfolio by 2025. Green Bond proceeds will help reach this target by funding projects that purchase compostable, biodegradable and/or recyclable material for use in product packaging, and by investing in the development of packaging that includes bio-based PET bottles and compostable and biodegradable snacks flex films. (SDG 9 – Industry, Innovation and Infrastructure, and SDG 12 – Responsible Consumption and Production)
- Decarbonization of Operations and Supply Chain: PepsiCo has set a goal of reducing absolute greenhouse gas emissions across its value chain by 20% by 2030, from a 2015 baseline. Green Bond proceeds will advance this goal by funding projects that improve energy efficiency, utilize cleaner transportation that replaces fossil fuel-powered cars with electric vehicles, and train farmers on ways to improve soil health. (SDG 7 – Affordable and Clean Energy, and SDG 11 Sustainable Cities and Communities)
- Water Sustainability: By 2025, in high water-risk areas, PepsiCo aims to replenish 100% of the water it consumes in its manufacturing operations and improve its operational water-use efficiency. Green Bond proceeds will support this goal by funding projects focused on water recycling and reuse, alternative crop rotation / tree planting, and providing smallholder farmers with access to drip irrigation and other water-saving technologies. (SDG 6 – Clean Water and Sanitation, SDG 12 – Responsible Consumption and Production, and SDG 15 – Life on Land)
“I am proud PepsiCo has issued its first Green Bond to address global challenges like carbon emissions, access to clean water, and plastic waste, and that the company continues to be a leader in tackling critical sustainability issues,” said Lowden. “This offering reflects our commitment to Winning with Purpose and being part of global solutions by further integrating sustainability into our business and our brands. I look forward to working with our many stakeholders around the world—including communities, consumers, customers, governments and NGOs—to advance this vital agenda.”
Lowden brings a wealth of critical experience and passion to his new position. In addition to leading PepsiCo’s Plastics Council and spearheading the company’s Global Sustainable Plastics agenda for the past year, he has held numerous leadership positions across both Foods and Beverages, in North America and globally, throughout his 23-year career with PepsiCo. He most recently served as President of the Global Foods Group, where he oversaw a period of impressive growth. Before leading the Global Foods Group, Lowden had roles as Chief Marketing Officer (CMO) of North America Beverages and CMO of PepsiCo International.
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $64 billion in net revenue in 2018, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana. PepsiCo’s product portfolio includes a wide range of enjoyable foods and beverages, including 22 brands that generate more than $1 billion each in estimated annual retail sales.
Guiding PepsiCo is our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose. “Winning with Purpose” reflects our ambition to win sustainably in the marketplace and embed purpose into all aspects of the business. For more information, visit www.pepsico.com.
This release contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “strategy,” “target” and “will” or similar statements or variations of such terms and other similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such statements, including changes in demand for PepsiCo’s products, as a result of changes in consumer preferences or otherwise; changes in laws related to the use or disposal of plastics or other packaging of PepsiCo’s products; changes in, or failure to comply with, applicable laws and regulations; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’s products; imposition of labeling or warning requirements on PepsiCo’s products; PepsiCo’s ability to compete effectively; political conditions, civil unrest or other developments and risks in the markets where PepsiCo’s products are made, manufactured, distributed or sold; the ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption; increased costs, disruption of supply or shortages of raw materials and other supplies; business disruptions; damage to PepsiCo’s reputation or brand image; loss of, or a significant reduction in sales to, any key customer; disruption to the retail landscape, including rapid growth in hard discounters and the e-commerce channel; climate change or water scarcity, or legal, regulatory or market measures to address climate change or water scarcity; and other factors that may adversely affect the price of PepsiCo’s publicly traded securities and financial performance. For additional information on these and other factors that could cause PepsiCo’s actual results to materially differ from those set forth herein, please see PepsiCo’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.