Sustainability Report

Corporate Profile
PepsiCo Inc. is an American multinational food and beverage corporation headquartered
in Purchase, New York, nited States, with interests in the manufacturing, marketing and
distribution of grain!based snack foods, beverages, and other products" Pepsi#o was
formed in $%&' with the merger of the Pepsi!#ola #ompany and (rito!)ay, *nc" Pepsi#o
has since e+panded from its namesake product Pepsi to a broader range of food and
beverage brands, the largest of which includes an acquisition of ,ropicana in $%%- and a
merger with .uaker /ats in 011$2which added the 3atorade brand to its portfolio"
As of 4anuary 0&, 01$0, 00 of Pepsi#o5s brands generated retail sales of more than
6$ billion apiece,
789
and the company5s products were distributed across more than 011
countries, resulting in annual net revenues of 68:": billion" ;ased on net revenue,
Pepsi#o is the second largest food and beverage business in the world" <ithin North
America, Pepsi#o is ranked =by net revenue> as the largest food and beverage business"
*ndra ?rishnamurthy Nooyi has been the chief e+ecutive of Pepsi#o since 011&, and the
company employed appro+imately 0@8,111 people worldwide as of 01$:" ,he company5s
beverage distribution and bottling is conducted by Pepsi#o as well as by licensed bottlers
in certain regions
Indexes
In recognition of our continued financial performance as a leading sustainability-
driven company, PepsiCo has
been named for the 4th time to the Dow Jones ustainability !orld Index "DJI
!orld#, and for the $th time to
the Dow Jones ustainability %orth &merica Index "DJI %orth &merica# in '()(*
+eport ,verview
-his report highlights PepsiCo .reater China/s business profile and sustainable
business practices as of the
end of '()(* 0irst, we introduce the status and business performance of PepsiCo
and PepsiCo .reater China,
then we examine our company/s uni1ue commitment to sustainable growth,
which we call 2Performance with
Purpose2* !e express that commitment across these four areas3
4
5uman ustainability 6 we encourage people to live healthier by offering a
portfolio of both en7oyable and
wholesome foods and beverages*
4
8nvironmental ustainability 6 we ta9e steps to be a good citi:en of the world,
protecting the 8arth/s natural
resources through innovation and more efficient use of land, energy, water and
pac9aging in our operations*
4
-alent ustainability 6 we invest in our associates to help them succeed and
develop the s9ills needed to
drive company growth, and create employment opportunities*
4
PepsiCo .reater China/s philanthropic giving 6 we give bac9 to the communities
we serve in China
5uman ustainability
-o the people of the world***
It/s a promise to encourage people to live healthier by offering a portfolio of both
en7oyable and wholesome foods and beverages*
Products3
Provide more food and beverage choices made with wholesome ingredients that contribute
to healthier eating and drin9ing*
4
Increase the amount of whole grains, fruits, vegetables, nuts, seeds and low-fat dairy in our
global product portfolio*
4
+educe the average amount of sodium per serving in 9ey global food brands by '$ percent
by '()$, from the baseline level of
'((;*
4
+educe the average amount of saturated fat per serving in 9ey global food brands by )$
percent by '('(, from the baseline level
of '((;*
4
+educe the average amount of added sugar per serving in 9ey global beverage brands by
'$ percent by '('(, from the baseline
level of '((;*
<ar9etplace3
8ncourage people to ma9e informed choices and live healthier*
4
Display calorie count and 9ey nutrients on our food and beverage pac9aging by '()'*
4
&dvertise to children under )' only products that meet our global science-based nutrition
standards*
4
8liminate the direct sale of full-sugar soft drin9s in primary and secondary schools around
the globe by '()'*
4
Increase the range of foods and beverages that offer solutions for managing calories, li9e
portion si:es*
Community3
&ctively wor9 with global and local partners to help address global nutrition challenges*
4
Invest in our business and research and development to expand our offerings of more
affordable, nutritionally relevant products
for underserved and lower-income communities*
4
8xpand PepsiCo 0oundation and PepsiCo corporate contribution initiatives to promote
healthier communities, including enhancing
diet and physical activity programs*
4
Integrate our policies and actions on human health, agriculture and the environment to ma9e
sure that they support each other*
#ontinued Product *nnovation
.lobally, our innovation is reflected in our portfolio of new products that
provide more nutrients and functional benefits, such as our =ua9er ,ats
product line, -ropicana 7uices, .atorade sports drin9s, >ipton -eas, :ero-
calorie soft drin9s, seeds, nuts and fruit snac9s*
PepsiCo is committed to selling only products we are proud of in China*
-o better serve the unmet demand of our growing consumer base,
PepsiCo established an +?D Center in hanghai in '(($* -oday,
PepsiCo is building a new, world-class +?D Center and pilot plant in
hanghai to test and innovate new exciting product possibilities not only
for China but also the whole &sian mar9et*
In July '((@, PepsiCo .reater China launched -ropicana .uo Ain 0en-a
range of new non-carbonated drin9s and brought the world/s leading
7uice brand 2-ropicana2 to Chinese consumers for the first time*
PepsiCo .reater China also successfully launched Cao Aen >e, a non-
carbonated beverage line inspired by traditional Chinese herbs, flavored
with ingredients li9e red dates and chrysanthemum* -ropicana Pulp acs
"Bian .uo >i#, a fruit 7uice drin9, was unveiled in the China mar9et in
'((C, followed by -ropicana )((D Pure Juice, a not-from-concentrate
"%0C# fresh fruit 7uice locali:ed for China in early '()(* PepsiCo/s +?D
team is also exploring the use of stevia, a natural plant-based sweetener,
to reduce the sugar content in our beverages without sacrificing taste*
In '()(, PepsiCo .reater China foods introduced a range of delicious
and wholesome =ua9er congees, with whole grain oats and local
ingredients li9e red dates, wolfberry and white fungus* Ender our 0rito-
>ay snac9 line, we launched >ay/s Potato Chips in picy <ala flavor,
as well as 5ot and our 0ish oup flavor for both >ay/s Potato Chips
and >ay/s tax in '()(F both flavors far exceeded expectation in their
popularity* Eni1ue innovations such as Iced >emon -ea and >ittle
-omato have also proved to have wide mar9et appeal in China*
:" (ood Safety
PepsiCo is dedicated to producing the safe, high-1uality and great-
tasting beverages and foods in every part of the world* Developing and
maintaining robust food safety programs is how we assure safety for
every pac9age, every day in every mar9et* PepsiCo has detailed internal
programs and procedures for food safety*
-o ma9e sure that all of our products are of the highest 1uality and meet
safety standards, we use only ingredients, processes, and pac9aging that
are proven safe by scientific evidence and administrative inspections*
0or PepsiCo, consumers/ health and safety always come first*
8ver since our entry into China, PepsiCo has won wide recognition from
the industry and Chinese consumers for our consistent compliance
with global standards in 1uality control* In eptember '((G, PepsiCo
Investment "China# >imited won the title of 20ood afety <odel
8nterprise2 at the ixth China 0ood afety &nnual Conference
sponsored by the China 0ood Industry &ssociation* In June '()(,
PepsiCo .reater China received the 2-rustworthy Arand for Consumers
&ward2 at the %ational 0ood afety 0orum organi:ed by xinhuanet*com
8" Promotion of a Aealthy )ifestyle
ports and music are part of a healthy lifestyle which is advocated by
PepsiCo* Ay encouraging people in China and around the world to
actively participate in sports and music contests, PepsiCo intends to
highlight the elements of youth and vigor in PepsiCo brands and to
attract the public interest and engagement* -hese efforts included a
heavy investment in supporting China/s sports causes, such as being the
title sponsor to Chinese occer >eague and the organi:er of five-people
football matches nationwide, with an aim to enrich the lives of Chinese
people and improve their health conditions*
In '((C, PepsiCo .reater China launched the 2Aattle of the Aands2 H a
national music contest covering do:ens of cities in China, and set up a
platform for young people to pursue their music dreams, and to promote
the lifestyle featuring youth, health and optimism*
In July '()(, PepsiCo .reater China 0oods supported the China
Cholesterol 8ducation Program "CC8P# with the launch of a =ua9er I(-
Day Cholesterol Challenge Program* -he program invited consumers
with elevated blood cholesterol levels to participate in a I(-day
Cholesterol challenge* -he program aimed to raise public awareness of
the ris9s of high blood cholesterol and highlighted the importance of a
healthy diet that includes oats and is low in saturated fat and cholesterol,
along with regular exercise, to reduce cholesterol naturally
Pepsi#o 3reater #hina ;everages /perating #ompany5s Bnvironmental Protection
Practices
PepsiCo .reater China/s bottling plants all prioriti:e clean production
and environmental protection, and have incorporated environmental
sustainability into all their operations, from the building of new facilities
to production processes to pac9aging reduction* -o meet PepsiCo/s
rigorous targets for reducing our water and energy use, PepsiCo .reater
China is committed to new plant construction guided by the E .reen
Auilding/s >88D standard ">eadership in 8nergy and 8nvironmental
Design#, uses environment-friendly truc9s, for9lifts and boilers, and
promotes the use of green coolers* PepsiCo .reater China has also
reduced pac9aging, lightened the weight of cans, and recycled labels*
-han9s to these and other measures, over the past five years,
PepsiCo bottling plants in .reater China have saved water and energy
respectively by 4(D, amounting to )$*; million tons of water and over
;(( million 9wh of energy saved* PepsiCo .reater China also lessened
its carbon footprint by cutting the use of plastic by I,;(( tons*
-he green plant in Chong1ing,
which was unveiled in June '((C, is a
milestone of PepsiCo/s green 7ourney in China*
Its office has received
>88D .old certification and the plant was certified ilver status*
It is the
first international PepsiCo site outside of the E to receive the >88D
certification* -he plant has more than I$ water-and energy-saving
designs, and utili:es the world/s most advanced technologies, including
more than '(( environmental managementJ trac9 points that monitor the
water and energy use of every piece of e1uipment in real time* -han9s
to such efforts to practice water, energy and material conservation, the
plant can save )G percent water and '' percent energy compared to the
old plant, and can reduce carbon emissions by I,)(( tons and conserve
G' million liters of water each year*
<oreover, the
8nvironment ustainability >earning Center
in the plant is
also instrumental in raising the awareness of environmental protection
among the younger generation by means of video demonstration, field
visits and interactive games, etc*
In &ugust '()(, PepsiCo .reater China made another brea9through
in green building with its
new %anchang beverage plant
being certified
with the >88D .old status* It is the first plant to receive the
>88D %C
"%ew Construction# .old certification
in the beverage industry in China,
according to the published information on the E .reen Auilding Council
"E.AC# website and has raised the bar of sustainable development in
China/s beverage industry
+educing ,ur !ater 0ootprint
PepsiCo .reater China practices environmental sustainability by actively
applying clean and renewable energy, adopting water and energy-
saving solutions supported by the facilities in the production process in
the bottling plants, and properly handling wastewater, C,
'
emissions
and solid waste*
,ne of the highlights is an initiative to promote effluent recycling under
the theme 2&dvocate effluent recycling to promote environmental
protection with the community2* In handong Province, Jinan Pepsi,
supported by the local 8nvironmental Protection Aureau and Public
0acility <anagement Aureau, uses the plant/s graywater for landscaping
in the 5igh--ech Par9, which not only raises the effluent reuse rate
to $(D but also benefits the community* In haanxi Province, Bi/an
Pepsi responded positively to the local government/s call to provide
recycled wastewater for road cleansing and community landscaping,
and the pro7ect is regarded as a win-win cooperative model between the
government and the enterprise*
In '()(, several bottling plants in PepsiCo .reater China received the
recognitions and award money from local governments for their excellent
performance in sustainable water utili:ation* 0or example, .uang:hou
>uogang plant received the Conservation pecial 0und of +<A '4(,(((
from the Development and +eform Aureau of .uang:hou 8conomic
and -echnological Development Kone for its activeness in promoting
water conservationF Jinan Pepsi plant was awarded +<A '((,((( by the
authority of Jinan 5i-tech District for providing ;(( tons of recycled water
per day for landscaping in the communityF hen:hen Pepsi plant was titled
2!ater-saving <odel 8nterprise2 by .uangdong Provincial Construction
Department and received +<A );(,((( as pri:e money* ,ther plants
such as %an7ing Pepsi plant, Chong1ing Pepsi plant, 5ang:hou Pepsi
plant all received ac9nowledgement and supporting funds from the local
governments* In '()(, PepsiCo .reater China/s bottling plants received
a total amount of more than +<A ) million from the governments for their
water-saving excellences*
<oreover, PepsiCo .reater China has started a 2Positive !ater
Aalance2 pilot program, which is focused on the water input and output
in the beverage bottling plant and PepsiCo/s potato farm in Khan7iang,
.uangdong Province, in order to monitor and observe PepsiCo/s
sustainability performance in terms of water usage*
.reen Cooler Pro7ects3
!e have been dedicated to developing environment-friendly coolers3
4
In '((G, we developed the first locally-made green cooler with natural
refrigerant "+'C(# and placed over '(( units for field test in the middle
of '((G*
4
In '((C, we wor9ed with cooler suppliers in China to locali:e 5C
compressors, and enriched green coolers from one model to four in
'()(
PepsiCo .reater China ustainable 0arming
!ith seven farms in China, PepsiCo is now one of the largest
agriculture-related enterprises in China, investing more than +<A
'(( million in local agricultural development, including potato farming
pro7ects* -his investment, supported by PepsiCo/s proven expertise in
crop plantation, generates a win-win solution for local farmers and the
company itself*
,ver the past )' years, more than )(,((( farmers have benefited from
PepsiCo/s investment in China/s agricultural sector* !e have helped
improve the living standards of local farmers who grow 1uality potatoes,
by increasing their income with long-term, price-protected contracts*
PepsiCo also coaches local farmers with advanced technologies and
9nowledge to boost productivities* Currently, the yield of our potato
farms in China has increased to 4$ tons per hectare, living up to the
global standard*
,ur agro investment also goes to many other areas, including irrigation
technologies that significantly reduce water consumption in potato
cultivation* PepsiCo has replaced flood irrigation with drip irrigation and
pivot irrigation, reducing water use by $(D in maximum* Diesel has
been replaced by electricity, reducing C,
'
emissions by 4,);$ tons in
'((C, with a '((; baseline*
-he demonstrative farm in Inner <ongolia, is an exciting achievement
of PepsiCo .reater China, where we introduced several cutting-edge
technologies to transform desert into high-yield potato farmland*
In June '((;, Chinese Premier !en Jiabao visited the farm in Inner
<ongolia and gave high recognition to PepsiCo/s win-win-win solution
which benefits the company, the local farmers and the environment*
,n the food production side, PepsiCo Aei7ing 0oods Plant received
2Aei7ing !ater-saving <odel2 &ward from Aei7ing <unicipal !ater &ffairs
Aureau and Aei7ing <unicipal .overnment in January '()), coupled
with the award money of +<A '$,((( from Aei7ing !ater Conservation
,ffice
5+ .uidelines
4
!e are committed to continuously empowering employees, fulfilling our responsibilities, and winning trust to
achieve talent sustainability*
4
,ur pursuit of employee development and corporate growth inspires innovation and targets results*
4
8mpowering employees allows us to act and thin9 in effective ways to ensure management efficiency and
guarantee the company/s interests*
4
ense of responsibility and trust are t
he basis of a company/s healthy growth* !e strive to win people/s trust both on the level of an individual and
a
company*
4
,ur sense of responsibility guides our behaviors and the company governance* !e build up trust through
our unified commitment to acting
responsibly and ma9ing 7oint efforts for mutual prosperity*
&* Diversity and Inclusion
PepsiCo ta9es diversity and inclusion as a fundamental business
priority* !e believe, a successful pursuit of this priority grants us an
opportunity to drive our growth and create an advantageous edge*
-o attract and retain the most talented and able people, we must create
a diverse and inclusive culture where everyone feels they have e1ual
opportunities to succeed and grow, regardless of gender, race, ethnicity,
religion, or different abilities*
PepsiCo employees are all engaged in inclusion training sessions* ,ur
5arvey C* +ussell Inclusion &ward was introduced in '((I to recogni:e
outstanding achievements to support PepsiCo/s efforts on diversity and
inclusion*
PepsiCo is recogni:ed as one of the most suitable wor9places for
women and minorities* ,ver the past three years, the proportion of
female executives of PepsiCo worldwide has increased by ;(D*
PepsiCo C8,, Indra L* %ooyi, is a lady, and President of PepsiCo
.reater China 0oods ,perating Company is a female, too* -he
percentage of PepsiCo executives in China who are women reached
IG*C percent, as of December '()(*
A* 5ealth and afety
,ur Code of Conduct includes a commitment to providing a safe and
healthy wor9 environment* It is our goal to design, construct, maintain
and operate our facilities in a manner to protect our people and
resources
<anagement of health and safety within PepsiCo system operates
on three different levels3 site level, regionalJbusiness unit level and
division level* Division health and safety professionals provide strategic
guidance, propose and develop PepsiCo-wide policies and practices,
and facilitate the communication and practices and 9nowledge sharing
of health and safety across our operations* +egionalJbusiness units and
sites handle all managerial and operational aspects of health and safety*
-o support them to fulfill these responsibilities, PepsiCo has a team
of dedicated health and safety professionals around the world* >ost-
time in7ury rates are trac9ed across PepsiCo with a uniform web-based
reporting tool
-rainings
8mployee training is year-round at PepsiCo with training covering
a large number of areas* &ssociates are regularly updated of the
business information through forums, town halls, daily e-newsletters,
web information, videos and other forms of communications* In '()(,
each employee of PepsiCo .reater China received 4(-hour training on
average, covering corporate culture, values, career path planning, 7ob
s9ills and leadership*
")# ,n-board
%ew associates are introduced to the company and receive information
on a variety of topics, including the company, history, career information
and Compensation ? Aenefit information*
"'# Job -raining
&ssociates receive specific 7ob trainings as re1uired, and attend
professional conferences to enhance 7ob s9ills*
"I# pecialty -raining
PepsiCo offers associates opportunities to improve their s9ills through
a variety of training opportunities, including an educational wee9
during which associates can select courses in anything from preparing
presentations to 9eeping a wor9 and life balance*
"4# Career <anagement
PepsiCo has a very robust program to help associates manage
their careers* 8lements include a guide for career growth tailored to
PepsiCo, as well as guides for specific functions* ,ur own year-long
career trac9ing process includes ob7ective setting, performance and
development reviews, development action plans, mid-year reviews and
I;( degree evaluations, with trainings and materials in place to provide
due support* 8xecutive leadership training focuses on helping highly
potential managers to excel and to gain a broader perspective of our
business*
"$# Diversity and Inclusion -raining
PepsiCo fulfills the commitment to fostering a diverse and inclusive
wor9place with a variety of trainings* &ssociates are re1uired to ta9e
step-by-step trainings which are specifically developed for PepsiCo*
";# Malues and Code of Conduct -raining
PepsiCo has provided interactive trainings revolving the company
values and Code of Conduct to associates worldwide* In '((C, PepsiCo
.reater China provided web-based training on our &nti-Aribery Policy
to ),I($ employees* !e also provided web-based exual 5arassment
and -rade pending Compliance courses and monitored them through
<ater #ellars for CothersD Safe Erinking <ater Access
In '(((, the China !omen/s Development 0oundation launched a
national program to raise public awareness and address a national
crisis3 the lac9 of safe drin9ing water access for hundreds of millions of
people in drought-stric9en and impoverished rural areas of central and
western China* -he program, called !ater Cellars for <others, focused
on the construction of Nwater cellars/, or cisterns, used in con7unction with
rainwater harvesting and basic water treatment 6 a simple but effective
way to bring water relief in areas where water infrastructure simply could
not reach* 0rom a simple call to action, !ater Cellars for <others today
has become one of the most highly recogni:ed %., programs in China,
bringing safe, clean drin9ing water access to more than )*@ million
people to date* PepsiCo has been a 9ey supporter of the !ater Cellars
for <others from early on H in '((), we became the first 0ortune $((
company to partner with the program, and have continued to give steady
support as it has grown in scale and impact over the last ten years* !e
remain the single largest multi-national corporate donor to date*
Ay the end of '()(, contributions from the PepsiCo 0oundation,
PepsiCo .reater China and our employees amounting to
+<A )G*@
million
have built more than ),$(( water cellars, funded construction of
more than I( centrali:ed small-scale water supply pro7ects, and trained
over )(,((( women in the countryside to maintain the water cellars*
,ver $;,((( people in '4 counties and 'G villages in seven provinces,
including ichuan, .ansu, .ui:hou, .uangxi, 5ebei, Inner <ongolia and
haanxi have benefited directly from our contributions* In the last five
years, as social consciousness and government initiatives for improving
rural livelihoods have gained momentum, the !ater Cellars for <others
program wor9ed with poverty alleviation experts, public health policy
officials, and input from the PepsiCo 0oundation to expand the core
program as they found that water access is the 9ey that unloc9s better
1uality of life* Ender the 2) O $ Pro7ect2, five extensions were added
around the water cellar 6 a solar-powered coo9er, a sanitary toilet,
animal husbandry, cash crop cultivation, and small-scale gardening*
&ccess to water alone can significantly improve people/s health, living
standards, economic stability, and chance for a better life*
In '()(, PepsiCo also leveraged its Pepsi brand and star power to
raise awareness of the safe drin9ing water access issue among our
consumers and customers, especially young people, with our
2&ctivate
Pour -hirst2
summer advertising campaign for Pepsi-Cola* 0rom &ugust
to %ovember '()(, an estimated )$ million people visited the campaign
webpage, generating '*) million visits to the official website of the !ater
Cellars for <others pro7ect* -he campaign video was viewed II@ million
times, and print and ma7or online media topped ),I(( reports*
&s China has undergone unprecedented social and economic change,
more than )(( million rural residents have migrated from the countryside
to the cities in search of wor9* -his has created the social challenge of
education for their children, as facilities are often inade1uate for their
needs* In '((G, PepsiCo .reater China Aeverages embar9ed on a
program with the +ed Cross ociety of China to help improve migrant
wor9er children schools by providing material aid such as scholarships,
boo9 donations, sports facilities, computers and other resources for
students and teachers use in the classroom*
Ay the end of '()(, 2& Aetter -omorrow2 has helped )',((( students
in )' schools in Aei7ing, Jinan, Chong1ing, %anchang, Changchun,
hanghai, .uang:hou, hen:hen, -ian7in, Bi/an, %an7ing and 5eyuan,
with a total donation of +<A )*$ million* &s many as more than I, (((
students have received 2PepsiCo Philanthropic cholarships2