PepsiCo has issued a ten-year “green bond” valued at US$1.25bn, which will go towards a range of sustainability projects governed by the drinks giant’s Pep+ climate programme.
As part of its 2030 climate pledge, PepsiCo is attempting to reduce greenhouse gas emissions by 40%, compared to a 2015 set baseline. Investment from the green bond will fund sustainable energy generation at PepsiCo facilities and the rollout of electric vehicles.
A key goal for the company is to make at least 50% of its packaging from recycled plastic content by 2030. Part of the funding from the green bond will be earmarked for strengthening recycling infrastructure and rates in key markets.
However, global circumstances may be having an adverse impact on its goals in local markets, as this month PepsiCo decided to roll back its policy to only use 100% recycled rPET on RTD products in the UK, blaming supply chain issues for the policy regression.
PepsiCo released its first green bond in 2019, issuing a 30-year US$1bn senior note offering.
Roughly US$858m of the funding from the first bond has gone towards sustainable, water, plastic and packaging projects, as well as work on the decarbonisation of the group’s supply chain. The company is also looking at upgrading its cooling equipment and vending machines.
PepsiCo will use the latest bond funding to invest in regenerative agriculture across its supply chain, where it sources roughly 25 crops from 30 countries. This farming practice takes an eco-scientific approach to crops and is being researched by many in the beverage industry, such as Diageo who is examining barley growth in Ireland for its Guinness production.
“While tackling the climate crisis requires a collaborative effort, it is clear that the private sector must play a leadership role,” said PepsiCo CSO Jim Andrew. “Our new green bond will be pivotal to channeling investment into the critical areas required to build a more sustainable and resilient food system.”
The company launched its Pep+ strategic business policy in 2021, with the stated goal of creating “a circular and inclusive value chain”. The platform is in line with the United Nations’ Sustainable Development Goals, which were adopted in 2015.