PREPARED FOR THE FOURTH ANNUAL

SMEAL MBA CASE COMPETITION

RISE
LEADING PEPSICO TO A
SUSTAINABLE FUTURE
AGENDA
• PepsiCo RISE
• Reduction
• Marketing
• Implementation
• Conclusion
Reducing GHG emissions through the implementation of sustainability
programs and the engagement of our community.

R• Reduction – More than operations

I• Implementation – What we can do today
S• Sustainability – Developing plans for
E tomorrow
• Engagement – Winning our key stakeholders

weRISE GlobalRISE
(internal programs) (external programs)

weRISE Recognition Switch to Organic Fertilizers

RISE Annual Conference Increase Recycling Rates
Global Internal Launch Introduce Eco-Friendly Bottles
RISE Certification Convert to HFC-Free Refrigeration

R I S E 3
Implementing the weRISE campaign and inspiring PepsiCo staff to
support “Performance with a Purpose” GHG emission reduction goal

• Global Internal Launch

• Email blast to all staff from the CEO, Indra Nooyi
• Webcast presentation from the CSO, Dr. Mehmood Khan
• Webinars on PepsiCo weRISE initiatives

RISE Sustainability Certification

•Develop a “Train the Trainer” program on sustainability efforts and leadership skills
•Engage the local community about going green through employee initiatives

RISE Annual Conference

•Focus on our global sustainability efforts
•Qualify by presenting potential sustainability initiatives to their managers
•Invite select employees to the RISE conference
•Implement feasible high impact ideas

weRISE Recognition
•Locations that meet or exceed green benchmarks receive recognition and share best practices
•Annual top performers qualify for rewards from corporate headquarters

R I S E 4
Through four targeted actions, PepsiCo will meet its 2030 GHG emission
reduction benchmarks

PepsiCo Greenhouse Gas Emissions: 2015 Benchmark

20% 80%

Proposed Efforts to Meet 2030 Reduction Goal

18.5% 18.5% 29.5% 33.5%

Increase Introduce Convert to Switch to Organic

ACTIO
Recycling Rate Eco-Friendly HFC-Free Fertilizers for
N
by 20% Bottles Refrigeration Farms
ACTO External Supplier External Supplier
R (Consumers) (Bottlers) (Vendor) (Farmers)

TYPE Scope 3 Scope 3 Scope 3 Scope 3

COST $20M $290M $3,200M $110M

COST Sensitivity analysis demonstrate that these costs will be offset by 1.1% additional
OFFSET revenue growth in each of the next five years.

R I S E 5
AGENDA
• PepsiCo RISE
• Reduction
• Marketing
• Implementation
• Conclusion
PepsiCo builds upon past endeavors across their supply chain to realize
reductions in GHG emissions

Switch to Organic Fertilizers for Tropicana

Progress toward 2030 GHG Emissions Goal Cost: $110M
CURREN
13.6B Bottles of Juice Annually (35% emissions from fertilizers)
T
CHANGE Shift to Organic Fertilizers (e.g. Yara) Long-term:
Incentivize
OUTCO use of organ
20% Reduction in CO2e per Bottle ic fertilizer
ME for all Pepsi
Co farmers.
33.5% Closer to 2030 Goal

Increase Recycling Rates

Progress toward 2030 GHG Emissions Goal Cost: $14.9M
CURREN
30% of PepsiCo Bottles are Recycled
T
CHANGE Enact Marketing and Investments to Recycle 50% of PepsiCo Bottles
OUTCO
ME
2.5M Metric Tonnes CO2e Decrease

18.5% Closer to 2030 Goal

R I S E 7
PepsiCo commits to reducing plastic and implementing HFC-free refrigeration to further decrease
GHG emissions

Introduce Eco-Friendly Bottles

Progress toward 2030 GHG Emissions Goal Cost: $290M
CURREN
32.5M Metric Tons CO2e Baseline GHG Emissions
T
CHANGE Eco-Friendly Bottles Represent 40% of Supply Chain by 2030
OUTCO Long-term: A
2.3M Metric Tons CO2e Decrease do
100% compo pt
ME
stable
18.5% Closer to 2030 Goal packaging ac
ross
PepsiCo bra
nds.

Convert to HFC-Free Refrigeration

Progress toward 2030 GHG Emission Goal Cost: $3,200M
CURREN
5.7M Metric Tons CO2e Baseline GHG Emissions
T
CHANGE Converting all PepsiCo Refrigerators to HFC-Free Technology
OUTCO
ME
3.8M Metric Tons CO2e Decrease

29.5% Closer to 2030 Goal

R I S E 8
AGENDA
• PepsiCo RISE
• Reduction
• Marketing
• Implementation
• Conclusion
Through a targeted marketing campaign, PepsiCo can expand upon its
reduction of scope 3 emissions

Proposal: Marketing Campaign - Global Multi-Pronged Marketing Approach

RISE • Add information on carbon equivalents on
• Challenge consumers to RISE for climate all bottled products
action • Affix advertisements on all Pepsi
• Encourage recycling through a community- refrigerators noting climate impact of
based moral imperative recycling bottles
• Demonstrate direct impact of recycling in • Rebrand Pepsi Logo with “Global RISE” for
understandable terms Pepsi, Diet Pepsi, etc.

Carbon Equivalent Info RISE Refrigerator Sticker Global Pepsi RISE Logo

Recycling this bottle is like planting

three trees, just without the dirt.
RISE up and recycle.

R I S E 10
In My Back Yard campaign and investment program brings GlobalRISE
into local communities

IN MY BACK
YARD
PepsiCo cares about your community.
We want to inspire you to RISE up and take care of your backyard.
Show us your recycling power and enter into our community investment program.
In My Back Yard incentivizes recycling and sustainability campaigns in
communities across the country

PepsiCo has a strong emphasis on strategic

community investment:
• Provided $2.6 million in planet-focused grants in 2016
• Divert funds to a new program, “In My Back Yard”

In My Back Yard
• Communities compete on recycling benchmarks
• Communities with largest reductions receive funding
IN MY BACK for improvement projects
YARDcommunities to RISE to
Encouraging • PepsiCo regional team members vote on winning
environmental challenges and projects
improve their surroundings.
Community projects could include:
25 communities across the U.S. with
the biggest increase in recycling will Community New Green Rain Water
receive funding for a project of their Garden Playground Capture System
choice.

Community Community
STEM Classes Improvement

R I S E 12
AGENDA
• PepsiCo RISE
• Reduction
• Marketing
• Implementation
• Conclusion
In completing the RISE campaign, PepsiCo may face risks stemming
from assumptions in projections
RISKS
GHG reduction relies on internal
mobilization in the RISE Campaign
GHG reduction forecasts are tied to
assumed 2% growth in bottle sales year-
over-year and are sensitive to changes
GHG reduction based on weighted
averaged and scaled per bottle, which may
not be realized
GHG reduction from recycling relies on
individual action from PepsiCo consumers
MITIGATION
Involve senior management and
incorporate individual employees in the
process; enact incentive schemes
Growth number based on analysts’
forecasts; model can be adjusted to provide
a more accurate number
Prior to launch, build additional accuracy
into the model with more detailed
data
Incentive programs for individuals to
recycle; launch marketing campaign to
capitalize on social imperatives
R I S E 14
 PepsiCo’s RISE Campaign will launch in a phased approach beginning in
2018 to meet GHG emission reduction goals by 2030
Internal
Launch of
RISE Fifth Annual RISE Meet 2030 GHG
Campaign Conference Emission
Complete Reduction Goals
Begin transition to
Half way to IMBY Grant
Sourcing HFC-Free
Eco-Friendly Round 2
Eco-Friendly Refrigeration
Bottle Goal Launched
Bottles

2017 2019 2021 2023 2025 2027 2029 2031

Public
Marketing IMBY Grant 75% of
Campaign Round 1 Recycling
Begins Launched Goal Met
10% Tropicana 20% Tropicana
Value Chain Value Chain
Begin Transition produced with produced with
to HFC-Free Organic Organic
Refrigeration Fertilizer Fertilizer

R I S E 15
AGENDA
• PepsiCo RISE
• Reduction
• Marketing
• Implementation
• Conclusion
Through the RISE Program, PepsiCo will meet its 2030 GHG Emission
Reduction Goals

ENGAGEMENT MODELS

IN MY BACK
14M
YARD Metric
REDUCTION PROCESSES

Increase
Tons
CO2e
Change To
Organic Recycling Rate
Fertilizer By 20%

Introduce Eco- HFC-Free

Friendly Bottles Refrigeration

R I S E 17