eric battino supplier sustainability manager global …...pepsico, an energy star partner since...
TRANSCRIPT
Eric BattinoSupplier Sustainability Manager
Global OperationsBurns & McDonnell Sustainability Summit 2012
Today’s Topics…..
PepsiCo’s Sustainability and Supplier Outreach Program
What comes to
mind when you think
about PepsiCo?
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We’re More Than Just Pepsi Cola
Global Presence19 - Billion Dollar Brands$60+ Billion in Revenue300,000 Employees
Global Distribution100,000 Sales RoutesBusinesses in Virtually
EveryCountry in the WorldLargest Markets: USA,Russia, Mexico
High VisibilityWaterEnergy and GHGLand Fill
PepsiCo’s Billion Dollar Brands
Sustainable Businessility is good
vHarvard, November 2011
Performance of companies withHigh and Low cultures of Sustainability
Why are we here?
More specifically, we pursue environmental sustainability for reasons closely linked to the business
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1 Social license to operate & grow
Secure our supply chain
Stakeholder expectations
Consumer demand
5 Productivity unlocks through efficiency
“Business cannot succeed in a society that fails.”Bjorn Stigson, President WBCSD
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Contributed more than $40 million to people in need
Bringing safe water to 3MM people
Provided 57,000+ hours of education to farmers
Improving farmer yield and fighting malnutrition
Social LicenseTo Operate &
Grow
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Our supply chain depends on a healthy environment; agriculture represents major opportunities for resilience
Secure OurSupply Chain
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Water Availability
Stakeholders are raising the bar in terms of what they expect from companies
• Environmental risks increasingly included in companies’ 10K filings
Material Risk Customer Risk
2009: Released first Corporate Sustainability Report
2009: Launched Sustainability Index and Sustainability Consortium
• FLNA: 1% point loss at WMT equals $32MM
• PEP: 5% point loss at Costco equals $11MM
Regulatory/NGO Risk
• Increasing costs to comply with regulation
• PepsiCo’s reputation tarnished in court of public opinion
Environmental risks are increasingly seen
as material to businesses
StakeholderExpectations
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Consumer opinions are becoming more clearand consistentConsumers feel better about our
Brands when we protectthe environment
Environment drives PEP favorabilityOur
environmental performance
gives us credibility to talk about
other areas, like nutrition
9,000 PepsiCo consumers across nine countries
ConsumerDemand
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Environmental sustainability unleashes significant productivity opportunities across the business
Bio Mass / Gas High MPG Fleet Beverage Packaging
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Recyclable Seasoning Bags
Membrane Bioreactors
Heat Recovery Power Partnerships Green Coolers
Productivity
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Environmental Sustainability Focus
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Driving Sustainability from the Top Down
At PepsiCo, Performance with Purpose means delivering sustainable growth by investing in a healthier future for people and our planet.
“Performance with Purpose is at the foundation of every aspect of our business. We integrate a commitment to human, environmental and talent sustainability into all of our operations. Doing so creates a blueprint for PepsiCo to develop, manufacture and sell our products in a sustainable way, which gives us a competitive advantage in markets all over the world and drives long-term growth.”
-Indra Nooyi
PepsiCo History of Environmental Sustainability
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Tropicana Pure Premium orange juice became the first consumer brand in NA to certify its carbon footprint
1999 2002
2004 2006 2001
2005
PepsiCo formalizes sustainabilityinitiative
Environmental Task Force formed to share best practices
10% PET recycled content in plastic bottles in the US
Sustainability Visiondefined
Awarded LEED Gold Level Certification for Frito-Lay distribution center
Admitted to Dow Jones Sustainability World Index
2007
Walkers was the first major food brand in the world to display a carbon footprint reduction logo on its packs
2009
PepsiCo, an Energy Star partner since 2007, was awarded the Energy Star Sustained Excellence Award
2009
2008
PepsiCo India achieves positive water balance
Test-marketed our first-ever 100% compostable snack bagfor SunChips
2009
LEED certificationof five buildings, including our first platinum certification, and China’s firstgold-certifiedfood plant
2009
2010
2011
PEP displaces Unilever as F&B Supersector Leader for DJSI; KO falls off list
PepsiCo issues first ever Water Report, “Good for Business; Good for Society” at World Water Week in Stockholm
As we have throughout our history, we will achieve our future goals by combining tools, technology, innovation and people
People
TechnologyTools - ReCon
Innovation
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Environmental Goals
Land &Packaging
10% Recycled PETUS Recycling rates > 50% Avoid 1B Pounds to LandfillEliminate all Solid Waste to Landfill
ClimateChange
Electric Efficiency by 20% / UnitFuel Efficiency by 25% / UnitGHG Intensity Goal 25%/UnitAbsolute GHG Reduction Goal
CommunitySustainable Agriculture PracticesFunding / Technical Support FarmersEnvironmental EducationAlign Health, Ag and Environment
Water20% Water Efficiency+ Water BalanceAccess for 3MM People
FLNA Financial Performance
Water
Electric
Fuel
25%
33%45%
Motor Fuel
>$80MM>$80MM
15%
PepsiCo’s Supplier Sustainability Outreach Program
Supplier Sustainability Outreach
Supplier Sustainability Outreach Program
Outreach Program Fundamentals
A balanced approach to resource conservation (teams, processes and technology) will drive business results with:
1. Senior leadership commitment
2. Long and short term goals tied to:• AOP – translating energy, water and waste into
business results • PDR objectives – leader accountability and alignment
3. Integration into established business processes• Business reviews/scorecards• Continuous improvement operations driven programs
(CI, LSS, etc.)
• Regular assessments leveraging resource conservation tools
4. Professional development program for building and maintaining leader/team capability
Building capability - training, resources and tools
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Single point of contact with dedicated RC expert
Access to PepsiCo expertise
Access to proven partners
Training and opportunity assessment tools
On-site support
Invitation to PepsiCo Global Sustainability Summits
Energy Star Partnership and Resources
“It amazes me that, in such a short time and by a group of people who haven’t been in our plant before, you were able to provide such detailed and comprehensive savings ideas.”-Bob Shearer, After ReCon Report-Out Shearer’s Brewster Plant
Program Performance
• Grew from 12 contract manufacturing locations to almost 50 companies with over a hundred impacted sites.
• 2008-2011– Energy: ~10% reduction (use/unit of production)– Water: ~15% reduction (use/unit of production)
• 2010-2011– Waste: ~40% reduction waste-to-landfill (absolute)
• 2008 – 2011 – Building Capability
• 23 Training Events: over 500 suppliers trained in the US
• 30 Technical 1 Hour Webcasts: over 1,500 attendees (suppliers and PepsiCo RC Champions)
• ~130 site visits – presenting the program to leadership teams, working with site leaders and their teams to establish sustainability programs, sharing best practices
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Leadership in Sustainability
Partner Leadership in sustainability throughout our supply chain
– Shearer’s Foods• Only LEED Platinum Food Mfg. site in
the world
– John B. Sanfilippo and Son• 2010 ENERGY STAR Partner of the
Year
Broader Impact
• EPA ENERGY STAR– The outreach program on boarded over 100 new ENERGY
STAR Partners which helped PepsiCo secure the national Partner of the Year Sustained Excellence award in 2008, 2009, 2010, 2011 and 2012.
– Oak State and Schulze and Burch were key leaders in the development of a baking industry energy use benchmarking tool by the EPA
– Kroger and Land O Lakes have been key leaders in the development of the EPA ENERGY STAR Dairy focus group and energy bench marking tool.
• Outreach program recognition by industry includes:– July 2011 article in Baking and Snack magazine – PepsiCo keynote speaker at the first sustainability conferences
• B&CMA (Biscuit and Cracker Manufacturer’s Association) • Peanut and Tree Nut Processors Association.
– American Association of Candy Technicians presented the outreach program and the business value of resource conservation programs in industry.
Lessons Learned
“Embracers seize the advantage”
– “Embracers” understand the business benefits of operating sustainably within the context of local/global communities and aggressively execute an effective program that addresses:
Energy Conservation
Water Conservation
Eliminating Waste-to-landfill