Approach

We believe strong governance is the foundation for delivering on our pep+ (PepsiCo Positive) agenda. At PepsiCo, our sustainability approach is integrated into — not separate from — our business. Our governance reflects this approach, with an integrated structure that combines Board and senior leadership oversight with the subject-matter and localized expertise that informs our strategy and how we execute it.

Board of Directors

The full Board considers sustainability issues to be an integral part of its business strategy oversight. Throughout the year, the Board and the relevant committees receive updates from and discuss with management sustainability, human capital management (including diversity, equity and inclusion) and public policy matters, including the company’s key programs, related goals and progress toward achieving these goals.

To assist the Board in its oversight of our sustainability agenda and progress, the Board established a Public Policy and Sustainability Committee (the Committee) in 2017. In 2020, it amended the Committee’s charter and changed its name to Sustainability, Diversity and Public Policy Committee to reflect the Committee’s ongoing oversight over diversity, equity and inclusion matters. The Committee assists the Board in providing more focused oversight of key sustainability, diversity, equity and inclusion and public policy matters. It is comprised entirely of independent directors and reflects a mix of public policy, risk, international and science-related skills, qualifications and experiences. In addition, the Committee reviews PepsiCo’s sustainability programs and goals and monitors our progress toward achieving such goals.

Senior leadership

Embedding sustainability within our business requires the commitment of our senior leadership, who drive the necessary mindset throughout their respective areas of oversight. Our Chairman & CEO, his direct reports and top functional leaders have direct oversight of the sustainability agenda, strategic decisions and performance management and receive updates regularly. This ensures that sustainability is a key accountability factor for every member of our senior leadership team. 

Strategy and progress against our sustainability goals are reviewed during bi-monthly meetings of the Sustainability Committee — an Executive Committee sub-committee comprised of members of our senior leadership management team — and also reviewed as part of the expanded Executive Committee agenda. This provides opportunities for our senior leadership to align on major strategic issues relating to sustainability and keep sustainability in focus among competing priorities. In between these meetings, senior leadership team members remain actively engaged in executing our sustainability goals.

Our executive officers have certain annual strategic objectives that are aligned with the achievement of our long-term sustainability agenda, generally tailored to each executive’s role and scope of responsibilities, including packaging, water, climate and social sustainability matters. Performance against these objectives is evaluated for each executive officer, in conjunction with individual contributions to broader strategic business imperatives, impacting the payout of the annual incentive award.

Global Sustainability Office

PepsiCo's Global Sustainability Office (GSO) is charged with coordinating and informing the company’s sustainability agenda across our value chain. It is led by the company’s Chief Sustainability Officer (CSO), who reports directly to the CEO and works closely with leaders from across the business to drive continued progress against our sustainability agenda and embed sustainability into our long-term strategic planning. 

The GSO is also responsible for collecting, managing and cross-functionally reporting sustainability data. Data integrity is vital to maintaining trust with our stakeholders, informs our goal-setting process, helps us measure progress and is used to inform investment decisions. For more on our dedicated Data Governance team and how we seek to ensure accuracy and consistency of our data while driving accountability among our teams, see ESG data governance.  We offer a suite of sustainability reporting publications, tailored to different stakeholder interests and preferences. See About our reporting for further detail.

Sector sustainability offices

In addition to the GSO, each sector within our business has its own CSO and sustainability team. These teams lead the execution of our pep+ strategy for their sector. Sector sustainability offices also respond to sustainability issues unique to their sector, address regional and local challenges and identify ways to interact with their specific stakeholders.

Soliciting feedback

We have created feedback mechanisms in order to capture the perspectives of our own workforce to help inform our decisions and activities. Furthermore, we continually engage with external stakeholders such as shareholders, consumers, customers, suppliers, communities, employees, local governments, NGOs and other stakeholders in order to hear feedback from and partner with them.

Progress

Through pep+, we are taking important steps to accelerate our sustainability journey. To support our sustainability agenda, we’re continuously investing in our ESG data capabilities to bolster our ability to deliver more timely and granular data to inform internal decision-making. Our agenda will further integrate sustainability into the plans, operations and core strategies of our businesses. To this end, we have appointed a Sustainability Leadership team that includes CSOs who work to champion sustainability in their respective sectors and across the business. Sector sustainability teams work closely with our GSO to ensure we harness our scale and have strong levels of coordination across the company and our businesses. Additionally, we continue to strengthen business engagement with and accountability for our pep+ strategy by hosting frequent education and immersion sessions with top leaders across key functions.

Since the launch of pep+ in 2021, we have held quarterly internal Sustainability Town Halls to engage and update employees on our sustainability agenda, and to showcase our pep+ progress. In addition, quarterly immersion sessions help to inform global leadership about key sustainability topics. We also engage value chain partners in forums such as global bottler forums and supplier summits, in which sustainability and pep+ were on the agenda in 2023.

What's next?

We have an important opportunity to advance our pep+ agenda in the years ahead. With our sustainability leadership team now in place around the world, we plan to further embed sustainability into the strategies, daily operating activities and decision making of all our businesses.