Striving for Positive Water Impact

Lessons from a Partnership Approach in Five Watersheds

Phoenix, Arizona, United States

Boxford, Suff olk, United Kingdom

Zhanjiang, Guangdong Province, China

Sangareddy, Andhra Pradesh, India

Mexico City, Federal District, Mexico

b “ The Nature Conservancy is drawn to this partnership with PepsiCo because we want to work with companies that can help us bend the trajectory of our common water future toward a more positive outcome by promoting widespread adoption of sustainable water practices.” Executive Summary

Availability of water is an inherently local phenomenon, defi ned by the supply, demand and quality of water within a watershed. Ecological and social impacts associated with unsustainable water use are similarly local by nature. PepsiCo is proactively working to protect the watersheds in which it operates, to help ensure that the company will continue to have the water it needs to support its operations and supply chain. PepsiCo was one of the fi rst companies of its size to formally and publicly acknowledge water as a human right, thereby accepting the responsibility to help ensure that all watershed stakeholders have enough clean water to meet their basic human needs.

Addressing Water-Related Risk By carefully examining the water balance The information and experience gained As the issue of water-related risk continues in each watershed, and by thinking and through these pilots will provide a framework to grow in signifi cance, companies and acting proactively to avoid or minimize water for developing a tool for identifying, design- stakeholders need a more detailed under- risks in those watersheds, we believe that ing and evaluating watershed remediation standing about how this risk manifests itself PepsiCo can make a substantial contribution strategies that are relevant to the specifi c and can be addressed in different water- toward sustainable water use in the places challenges that individual sites face. The sheds. Pilot studies, like those described in the company works. We hope that our experi- fi rst component of this method is a water- this report, help to inform the development ences can inform other corporations facing shed “diagnostic” that relies on a number of of a strategy around corporate water risk similar challenges. focused questions to help a site determine management and illustrate what “sustain- whether it is at risk of water stress, evaluate able water use” might look like. In collaboration both organizations achieved the level of risk, and identify the need for more than either partner could indepen- watershed restoration actions. The next com- PepsiCo and The Nature Conservancy Partner dently. PepsiCo’s global presence and broad ponent allows sites to use their local situation to Better Understand Water Risk spectrum of sites provide a wide and diverse as a guide to potential action. This typically PepsiCo and The Nature Conservancy have platform for testing and implementing The takes the form of a decision tree that results partnered to launch fi ve Positive Water Nature Conservancy’s approach to watershed in identifi cation of potential actions for Impact pilot projects focused on understand- protection and freshwater conservation. each situation. ing the watershed conditions and restoration Achieving Positive Water Impact in a given opportunities for a group of diverse manufac- watershed means that PepsiCo will make Given the importance of watershed manage- turing plants in different parts of the world. more and better water available to the envi- ment to PepsiCo, all of the company’s The foundation of this understanding came ronment and the communities within business sectors are contributing to this through identifying the areas that PepsiCo that watershed. global initiative with The Nature Conservancy. infl uences through its use of water and the The pilot phase of the project included impacts and risks of that use. Our research What We Learn Will Be Broadly Applicable direct funding, and both PepsiCo corporate helped identify optimal sub-watersheds for Throughout the pilot process, we found that and business unit staff have provided restoration, potential activities for improv- collecting information and making decisions additional in-kind support. ing water conditions, and the estimated was a highly iterative process. The impor- benefi ts and costs associated with these tance of knowing a site’s water source was At the time of publication, specifi c initiatives activities. Engagement by local business units illustrated early on; the question of stress and funding levels for Phase Two of has been critical to this initiative. depends more on the location of its water Positive Water Impact were being explored supply than the location of a facility. and assessed.

1 Partnership

When we look closely at local watersheds and communities, many opportunities for better water What Does management become apparent. “Sustainable At the same time, a suffi cient supply of safe Water Use” water is essential for businesses to oper- ate, and they have considerable power and Look Like? opportunity to infl uence the water situation, now and in the future. About 20 percent of global water consumption goes into generat- ing products—primarily agricultural—for From The Nature Conservancy international trade.2 Much of the remain- From the global level, the water future is ing 80 percent of water consumption also looking rather bleak. Virtually all reports and appears to be connected to commercial forecasts suggest that the global water crisis markets. For instance, nearly two-thirds of will only get worse. Global water use doubled all water use in the U.S. is for “indirect” between 1951 and 2002.1 Today, nearly purposes, meaning that it is used to produce 3 billion people are living in river basins with ingredients for commercial products.6 The “severe” water scarcity during at least part food and beverage industry accounts for of the year.2 For a substantial portion of the 30 percent of that indirect water use in the global population, the availability of water for United States. and communities, many opportunities for drinking, bathing, growing food and generat- better water management become apparent. ing electricity seems to become less certain These water facts help to explain why The Together, we hope to create some rays of every year. Nature Conservancy is partnering with hope that can inspire and mobilize others. PepsiCo to develop new approaches that The vast majority of the water we consume— address global water challenges. As one of more than 90 percent—goes to agriculture.2 the world’s largest food and beverage 1 Petra Döll, Kristine Fiedler, and Jing Zhang, “Global- This agricultural production is essential companies, PepsiCo has considerable scale analysis of river fl ow alterations due to water withdrawals and reservoirs,” Earth System Science, to feeding our global population and support- infl uence over water use in many countries. no. 13 (2009): 2413–32. ing our economies. However, today the But numbers tell only part of our story. 2 Mesfi n Mekonnen and Arjen Y. Hoekstra, National Water lack of food security and access to safe drink- Footprint Accounts: The Green, Blue and Grey Water Footprint of Production and Consumption, report, vol. 1, ing water affects more than 800 million The Nature Conservancy is drawn to this series 50 (Delft, the Netherlands: UNESCO-IHE Institute people in the world. This situation could partnership with PepsiCo because we want to for Water Education, 2011). worsen considerably as agricultural demands work with companies that can help us bend 3 David Molden, ed., Water for Food, Water for Life: Comprehensive Assessment of Water Management increase in the next 50 years. Without the trajectory of our common water future in Agriculture (London: Earthscan and Colombo: further improvements in water productivity or toward a more positive outcome by promot- International Water Management Institute, 2007), p. 645. major shifts in production patterns, the ing widespread adoption of sustainable 4 UN World Water Assessment Programme, Water in amount of water consumed by agriculture water practices. As discussed in this report, a Changing World: the United Nations World Water could increase by 70 – 90 percent by 2050.3 PepsiCo is committed to ensuring a Positive Development Report 3, vol. 2 (London: Earthscan, 2009), p. 318. Water Impact, meaning that the company 5 Millennium Ecosystem Assessment, Ecosystems and Our water challenges are not restricted to will “make more and better water available Human Well-Being: Synthesis Report (Washington, DC: agricultural water use. More than 80 percent to the environment and the communities Island Press, 2005), p. 160. of the sewage from cities and factories in where we and our suppliers operate.” We’ve 6 Michael Blackhurst, Chris Hendrickson, and Jordi Sels i Vidal, “Direct and Indirect Water Withdrawal developing countries is discharged into rivers started looking closely at fi ve pilot loca tions, for U.S. Industrial Sectors,” Environmental Science and lakes without any treatment.4 where we believe that we can make the water Technology 44, no. 6 (February 8, 2010), 2126–30. future better. The human species is not alone in feeling the impacts of water shortages or pollu- In contrast to the bleak appearance of the tion. Populations of freshwater species have global water situation, we’re fi nding that declined by 50 percent since 1970,5 includ- when we look closely at local watersheds ing many fi sh species that feed people.

2 From PepsiCo We are working hard to reach our goals At PepsiCo, water is fundamental to our by minimizing the impact our business ability to operate effi ciently and vital to the has on the environment and collaborat- communities we serve. Water stewardship ing with industry peers, governments, is a central part of “Performance with academia, nongovernmental organizations Purpose”—our mission to deliver sustainable Why It (NGOs) and communities. As our jour- growth by investing in a healthier future Matters ney evolved to become more holistic and for people and our planet. comprehensive, we sought out partners of global renown who could share the value As part of this commitment, we unveiled of the collaboration—one such partner is a set of global goals in early 2010 organized Doubled The Nature Conservancy. around a straightforward premise: We Global water use doubled will respect the human right to water through between 1951 and 2002. Our business units are very active in world-class effi ciency in our operations, addressing water challenges. For example, in preserving water resources and enabling 2009 PepsiCo India achieved a “positive access to safe water. Specifi cally, we water balance”—giving back more water have committed to: 3 billion to the community than our facilities Nearly 3 billion people live with consumed, which was verifi ed externally by • Improving our water use effi ciency by severe water scarcity. Deloitte LLP. In 2010, the balance became 20 percent per unit of production by 2015; more positive as the volume of water saved and returned exceeded the volume con- • Striving for “positive water balance” in our sumed by a greater margin. operations in water-distressed areas; and 50% Freshwater species declined by Positive Water Impact, as this report describes, • Providing access to safe water to 3 million 50 percent since 1970, is a natural evolution of positive water bal- including many fi sh species people in developing countries by the end that feed people. ance. Its focus is local, at the watershed of 2015. level. It recognizes that beyond simply having enough water, people need to have water In doing this, we made a strategic decision to that’s clean and safe to use. This connection implement protective policies and proce- 800 million between quantity and quality echoes the dures, rather than apply mitigating measures Today the lack of food security suffi ciency and safety pillars of the human reactively.7 We now face the challenge of and access to safe drinking water right to water, and is directly linked to water affects more than 800 million integrating these principles into our business sources and their protection—topics people in the world. at every level. An important step toward in which The Nature Conservancy’s leader- this integration is building awareness among ship is globally recognized. By working diverse stakeholders. together, we are able to leverage our comple- mentary strengths. The Nature Conservancy’s PepsiCo has made great strides on our water Achieving Positive expertise in freshwater conservation and stewardship journey over the past decade. We Water Impact at PepsiCo its scientifi c rigor enhance and strengthen have developed water treatment, chemistry means that we will PepsiCo’s water stewardship initiatives. The and eco-effi ciency expertise within our facili- variety of sites within PepsiCo provides a ties around the world, serving consumers make more and better natural platform for testing and implement- in more countries than the United Nations water available to the ing The Nature Conservancy’s approach. has members. Together, we exemplify collaboration directed environment and the at solving important problems. communities where we and our suppliers operate. 7 PepsiCo, Water Stewardship: Good for Business, Good for Society, report (Purchase, NY: PepsiCo., 2010), http://www.pepsico.com/Download/PepsiCo_Water_ Report_FNL.pdf.

3 Challenges This type of risk can lead to value judgments being made against the company, and it may also trigger regulatory responses from governments that make it more diffi cult or costly to operate. The availability of water varies greatly from place to place as it gathers in local watersheds. At least one in fi ve of the global companies using the largest amounts of water is already experiencing damage to its business from As we enter the second decade of the drought and other shortages, fl ooding 21st century, the global dialogue around and rising prices.8 Just this year, the World water is showing signs of both maturation Economic Forum ranked water security and anxiety for the future. Ten years among the top 10 global risks to businesses.9 ago, there were ominous pronouncements Analysts are also estimating that more than forecasting that this century’s wars would 20 percent of GDP is already at risk due to be fought over water, yet this decade’s water stress.10 discourse has turned toward the economic consequences of water scarcity, or more This atmosphere of heightened sensitivity to precisely, business risk. water-related business risk has given rise to numerous consultants, analysts and advisors Business risk around water can manifest claiming unique qualifi cations and capa- itself in a variety of forms, but it generally bilities for ascertaining water risks. New tools falls into two primary categories: physical are becoming available for quantifying and risk and reputational risk. Physical risk is prioritizing a company’s water risks across centered on the question of whether or not a its operations and supply chains. Numerous company can expect to have suffi cient conferences and sector-specifi c roundtables supplies of clean water in the future to have also assembled to provide forums for support its business. This area of risk can be companies with similar business interests infl uenced by increasing competition for and risks to share water concerns and ideas. water resources, mounting water scarcity, drought, climate change, water-source However, there is still a great need for contamination, infrastructure failure, poorly real-world experience in effectively managing What Are managed water entitlement systems and water-related business risk. Pilot studies other factors. Each of these stresses can conducted in the factory and fi eld are the Major lead to increasing fi nancial costs for a urgently needed to inform the evolution of company, such as higher energy costs thinking and strategy around corporate Water required to deliver or treat water supplies, water risk management and to illustrate what and higher insurance and credit costs. In sustainable water use looks like. Challenges more extreme cases, water supplies can be disrupted, or a company may be forced to The water partnership formed between PepsiCo of the close facilities or relocate. Reputational risk and The Nature Conservancy is designed as can occur if a company’s water use comes a fi rst step to fi ll this need. We intend to learn 21st Century? into confl ict with other water users and the by doing. We are taking our initial bearings diverse values that stakeholders hold with from some basic realities of water, beginning respect to water. Reputational risk can also with a focus on watersheds. Unlike the result when surrounding stakeholders take uniformity of carbon dioxide in the global a negative view of a company’s operations. atmosphere, the availability of water varies

4 greatly from place to place as it gathers in In this report, we also outline the broader local watersheds. Use of that water must commitment that PepsiCo has made to have respect the limits of availability in each a Positive Water Impact in the local water- watershed to protect this important resource. sheds in which it operates. As a business The differences in water availability by accountable to its fi nancial stakeholders, watershed explain why ecological and social Why It PepsiCo is looking for ways to ensure that impacts associated with unsustainable Matters it will continue to have access to suffi cient water use are of a highly localized nature— quantities of clean water to sustain its it is very diffi cult to predict where such business operations and supply chain while impacts may arise without understanding avoiding physical risk wherever possible. the water balance of local watersheds. 1 in 5 The company also embraces its responsibility 1 in 5 of the largest to help ensure that all watershed stakeholders business water users is already have enough clean water to meet their basic experiencing signifi cant PepsiCo embraces its human needs, with the understanding that water-related impacts. responsibility to help everyone holds a right to water. Importantly, ensure that all watershed the company is also committed to working with all water users to ensure enough clean stakeholders have water fl owing through natural ecosystems 10 to sustain their ecological health and the eco- enough clean water to The top 10 global risks to business include system services upon which we all depend. meet their basic human water security. needs, with the under- By carefully examining the water balance in each watershed, and by thinking and acting standing that everyone proactively to avoid or minimize water risks in holds a right to water. 20% those watersheds, we believe that PepsiCo More than 20 percent can make a substantial contribution toward of GDP is already at risk ensuring sustainable water use in the places For that reason, we are focusing on the local due to water stress. watersheds and aquifers that supply PepsiCo the company works. We hope that our facilities and farms as our geographic units experiences can inform other corporations of risk analysis. A watershed frames the facing similar challenges. water “bank account.” By carefully auditing the right enabling conditions for rapid the withdrawals and deposits being made learning. The company currently has fi ve pilot from the watershed account, we can better watershed studies under way in which it 8 Environmental Resources Management Limited, CDP Water Disclosure 2010 Global Report (Carbon Disclosure understand where imbalances may exist is examining water budgets, assessing the Project, 2010), pp. 1–52. that could put strain on watershed stakehold- sustainability of water use and designing 9 Charles Emmerson, Global Risks 2011: An initiative of ers. Within that watershed account, we watershed conservation activities that can the Risk Response Network, report, ed. Nancy Tranchet, 6th ed. (Geneva: World Economic Forum, 2011), know that water withdrawals and pollution improve water availability and/or quality. This pp. 1–60. must be managed in ways that optimally report discusses some of our early fi ndings 10 Claudia Ringler, “Sustaining Growth via Water yield benefi ts for all stakeholders, with from the following pilot sites: Productivity: 2030/2050 Scenarios” (lecture, International Food Policy Research Institute, Center for attention to long-term economic, social and Development Research [ZEF], Bonn, April 19, 2011). environmental sustainability. All watershed Phoenix, Arizona, United States stakeholders are accountable to one another; we all share risk when water is not managed Boxford, Suffolk, United Kingdom equitably and sustainably. Zhanjiang, Guangdong Province, China PepsiCo has begun to identify geographies where water risks appear to be moderate or Sangareddy, Andhra Pradesh, India high, and locations at which specifi c facilities and associated watersheds appear to have Mexico City, Federal District, Mexico

5 Principles

The vast majority of the water we consume—more than 90 percent—goes to agriculture.

Our Guiding Principles

The Nature Conservancy and PepsiCo have agreed upon the following guiding principles for this study:

Our fi rst and most important It’s All focus is on water-stressed or Local water-scarce locations, but we aspire to integrate Positive Water Impact Consideration of local context ensures that a site’s strategy will effectively principles throughout PepsiCo’s business. address its specifi c water-related Doing this demands a robust method business risks or impacts. for identifying, evaluating and designing watershed remediation strategies that are relevant to the specifi c challenges faced It is important to devise Water is complicated, and by individual sites. This method, which Cost a strategy or solution that understanding a site’s water will ultimately be used across the PepsiCo Benefi t makes local sense and is The situation requires insight spectrum, must be applicable to small also affordable and timely. Known into environmental, physical, Unknowns and large facilities, located in rural and urban The Nature Conservancy’s political, economic, com- settings, and operating in developed and experience in watershed remediation pro- munity and regulatory developing economies. Consideration of local vides insight into the time and resources conditions. Often some of this information context ensures that a site’s strategy will required to “make a difference.” In the is unavailable or inconsistent. By initially effectively address its specifi c water-related “Promise of PepsiCo” commitments, PepsiCo focusing on a small number of sites, we have business risks or impacts. These could has pledged to “strive for positive water bal- been able to identify the most effi cient way include scarcity, fl ooding, community access ance in our operations in water-distressed to collect information and understand which or declining quality, among others. The areas.”11 In order to attach metrics to this information is essential. diversity of challenges guarantees that a pledge, we need to understand the costs and generic solution would fi t only a fraction benefi ts associated with potential actions.

of sites. 11 PepsiCo Inc., 2010 PepsiCo Annual Report (PepsiCo, March 2011), http://www.pepsico.com/annual10/.

6 Lessons • Some cases where it is clear that total water use must be offset to attain Positive PepsiCo supports the basic elements of Water Impact. For example, if a site’s the WHO/U.N. joint declaration on the human treated wastewater is discharged directly right to water and commits to the following: to salt water, then the discharged water is unavailable for further local use or support Safety of the ecosystem. In this instance, the What Have Ensure that our operations preserve total water use must be our baseline for the quality of the water resources in the Positive Water Impact. We Learned communities in which we do business. • Some cases where it is clear that net Suffi ciency So Far? consumption must be offset to attain Our operating objective is to ensure that Positive Water Impact. For example, if a our use of water will not diminish the site’s treated wastewater is discharged availability of community water resources directly adjacent to the point of with- to the individuals or the communities Active participation by local business units drawal and if the quality of the withdrawn in the areas in which we operate. is absolutely necessary, and each of our water and discharge are similar, then the pilot locations has provided feedback and Acceptability net consumption would be our baseline. suggestions throughout the process. This We will involve communities in plans • Some cases where a more refi ned decision started with identifying pilot locations and has to develop water resources, and assure process is required. For example, if a continued as the local teams have provided transparency of any risks or challenges to site’s treated wastewater is discharged to information on business conditions, commu- the local governments and community the same watershed from which water was nity relationships and regulatory trends. members in an ongoing manner. withdrawn, but at a location signifi cantly Physical Accessibility downstream from the withdrawal, then a Nonlinear Process We will ensure that our operations will not site-specifi c evaluation is needed to The pilot process for each site was originally adversely impact physical accessibility of determine an appropriate baseline. expected to progress stepwise from identify- community members to community water ing area of infl uence, understanding impacts resources and will address community Positive Water Impact calculations can be and risks, identifying optimal watersheds concerns in a cooperative manner. based on net consumption, provided that the for restoration activities, identifying and wastewater discharged by PepsiCo is returned designing effective interventions, and fi nally Affordability to a location near the point of withdrawal, with estimating benefi ts and costs associated We will appropriately advocate to appli- appropriate timing, and of suffi cient quality with those activities. The process often pro- cable government bodies that safe water to maintain the desired environmental gressed in a less straightforward manner. In supplies should be available in a fair and conditions. If these conditions are not met, some cases, information collected during one equitable manner to members of the the calculations are based on total use. stage led to reevaluation of an earlier stage community. Such water should be safe and then to a different path than expected. and of consistent and adequate supply and A second question relates to how existing affordable within local practices. restoration activities are considered when cal- Water Source culating the Positive Water Impact target. The The importance—and relative rarity—of target could be based on “consumption minus knowing the source of a location’s water existing restoration activities,” with Positive became clear when we learned that one the focus of individual business units. In some Water Impact calculations considering only region indicated by multiple scarcity studies areas, PepsiCo has been very active in local new restoration activities. Conversely, the to be stressed12, 13 has historically obtained environmental and conservation projects, target could be based solely on consumption, water via interbasin transfer from an area that and leveraging these existing relationships including all existing restoration activities, does not appear to be threatened by water and efforts can provide opportunities and when calculating the Positive Water Impact stress. This experience highlighted the need partnerships unique to a specifi c location. target. The former approach is used here, for a “diagnostic” that will help a site such that existing restoration activities are determine whether it is facing physical, Calculation Basis subtracted from consumption prior to per- economic, regulatory or other water stress. With respect to the basis for calculating forming Positive Water Impact calculations. Positive Water Impact, a key question Local Business Focus is whether the basis is 1) total PepsiCo water The importance of tailoring a project to local use, or 2) net consumption—total use 12 “Global Water Tool 2010,” World Business Council for Sustainable Development (WBCSD), Global Water Tool, conditions—water availability, community minus quantity discharged. accessed July 2011, http://www.wbcsd.org/templates/ needs and regulatory climate—was a driving TemplateWBCSD5/layout.asp?type=p. force behind the Positive Water Impact initiative. No single answer applies in all cases, as 13 Stephan Pfi ster, Annette Koehler, and Stefanie Hellweg, “Assessing the Environmental Impacts of Freshwater Less obvious was the need to account for there are: Consumption in LCA,” Environmental Science and Technology 43, no. 11 (June 1, 2009): 4098–4104. 7 Highlights

Water Mitigation Eff orts Under Review

Positive Water Impact Process

The pilot process often progressed in a nonlinear manner, but these were Phoenix, the steps we covered for each location: United States Irrigation system Select Pilot Sites improvement and upgrades

Municipal groundwater mitigation Identify “Area of Infl uence”

Understand Impacts and Risks Mexico City, Mexico

Rainfall retention in mountains Identify Optimal Watersheds

for Restoration Restoration of Tláhuac-Xico Lake

Wastewater re-use Identify Restoration Activities

Calculate Benefi t Associated with Each Restoration Activity

Estimate Costs Associated with Each Restoration Activity

8 Boxford, England

Wastewater re-use Zhanjiang, China

Wastewater re-use

Rainwater harvesting Sangareddy, at facility India Rainwater harvesting from surrounding rural areas Rainwater harvesting at facility

Rehabilitation of defunct water infrastructure in local villages

Improved irrigation practices

9 Watershed History and Trends Restoration Activities Evaluated Water is provided to the Tolleson and Phoenix Three potential restoration activities were Phoenix, facilities by the Salt River Project, with 80 to identifi ed for restoring water fl ow in the Arizona, 90 percent sourced from surface water in Verde: 1) the purchase of water rights for the Verde, Salt and Gila River basins and the conservation purposes, 2) municipal ground- U.S. Pilot remaining 10 to 20 percent from local water mitigation, and 3) irrigation system groundwater. The Verde River was selected as improvements. With respect to irrigation There are three PepsiCo facilities located in the Phoenix, Arizona area, the focus of PepsiCo’s Positive Water Impact system upgrades, staff from The Nature including two bottling plants in work in this pilot site area for several reasons. Conservancy have been working collab- Tolleson and Phoenix and a Frito-Lay Thirty to forty percent of Salt River Project oratively with irrigation ditch companies to plant in Casa Grande. water originates from the Verde system and a develop a strategy for improving diversion high level of competition for Verde water exists among upstream water users. There is great potential for restoration and water effi ciency projects in the Verde basin and the river is recognized and valued by the local community as an important economic, environmental, cultural and recreational asset worth protecting.

The majority of land in the upper Verde Mitigation Efforts Under Review watershed is publicly owned, but the majority • Irrigation system improvement of the lands overlying the aquifer in the upper and upgrades Verde Valley are privately owned or desig- • Municipal groundwater mitigation nated as Arizona State Trust Lands. This leaves the aquifer open to threats of dewater- ing from urban and suburban development. The cities of Camp Verde, Cottonwood and Water Use in PepsiCo Facilities Clarkdale in the lower Verde Valley utilize The PepsiCo facilities in the Phoenix area regional and alluvial groundwater as public There is great potential receive water from a mix of groundwater and water supplies and ditch companies use surface water sources, with Casa Grande surface water for irrigation. for restoration and water relying primarily on groundwater and Phoenix effi ciency projects in the and Tolleson bottling plants relying on surface Key sources of stress to the river include water. The average annual water use at each surface water diversions, groundwater Verde basin and the river facility varies, from 506,110 cubic meters at pumping, invasion of non-native species and is recognized and valued the Casa Grande plant to 589,390 cubic climate change. Seven large diversions by the local community as meters at the Phoenix bottling plant, to take surface water from the Verde River for 1,516,440 cubic meters at the Tolleson irrigation of crop lands and lawns and to an important economic, facility, based on the last four years of water supply recreational water features. Existing environmental, cultural use data. PepsiCo decided to focus restora- diversion structures are primitive and do tion actions on surface water for this pilot not allow for control of the amount of water and recreational asset site. Therefore, the Positive Water Impact that is diverted. Most of the ditches drain worth protecting. goal for this round of assessments is limited excess water all the way to the terminus of to the Phoenix and Tolleson bottling plants, the ditch before spilling it back into the structures and the effi ciency of water delivery which together use an average of 2,105,830 river. This represents many miles of unneces- systems. These improvements will enable a cubic meters of water annually. sarily diverted water and causes evaporative more effective, effi cient and fl exible water losses that should be avoided to the extent management system in the Verde Valley possible. Crop irrigation and other surface and contribute to improved river fl ows. This water uses deplete the natural fl ow through interaction has shown that each ditch in the the Verde Valley by more than 1.7 cubic Verde Valley requires unique consideration, meters per second. because each ditch operates differently and

10 is infl uenced by variables that are specifi c enough to ensure that purchased water to the existing water delivery system. For remains in the stream, and cannot be claimed this reason, calculation of irrigation ben- by other users. The Nature Conservancy Boxford, efi ts that could be widely extrapolated as has recently completed two purchases Suff olk, UK a pilot was not considered feasible for the of senior water rights, restoring 3,947 and Verde. As a result, our more detailed assess- 260,264 cubic meters of water per year Pilot ment of restoration alternatives focused on to the Verde. The Nature Conservancy has PepsiCo operates a juicing and purchasing of water rights and municipal subsequently identifi ed several priority prop- bottling plant at Copella Hill Farm, groundwater mitigation. erties associated with senior water rights for located in Boxford, Suffolk, UK. acquisition that present additional oppor- Purchase of Senior Water Rights for tunities for PepsiCo to protect and restore Conservation Purposes river fl ows. Restoration activities in the Verde are con- strained by the presence of state and federal Municipal Groundwater laws that dictate how water use is allocated. Mitigation/Water Banking Water users are granted “water rights” that Many municipalities in Arizona use ground- dictate the amount of water they can use water as their water supply, and discharge and how the water can be used. Water law their wastewater to otherwise dry channels in the western United States is based upon where the water provides no benefi cial a system where preferential, or senior, water use. Some municipalities are now considering rights are given to the fi rst entity to remove construction of groundwater recharge facili- Mitigation Efforts Under Review water from a stream for benefi cial use (e.g., ties that will facilitate the infi ltration of their • Wastewater re-use agriculture). The entity with the oldest claim wastewater to recharge local groundwater. has the right to continue using that same This approach to groundwater mitigation quantity of water indefi nitely, as long as that can be used to contribute to stream fl ow much water is naturally available and the restoration in the Verde via the concept of water is applied to the same benefi cial use. water banking. State law in Arizona com- Water Use in PepsiCo Facilities Water users can use the water for their own plicates the purchase of water rights for The Boxford plant used approximately benefi cial purposes, provided that water is con servation purposes by specifi cally attach- 80,000 cubic meters of freshwater per year still available to support the uses of those ing the water right to the specifi c plot of in 2009 and 2010. The plant treats its with senior water rights. Water rights are land where the water is to be used, as well own wastewater on-site and discharges the commonly overallocated, such that those as to the nature of the use. Purchased water treated wastewater into a lagoon, where a who possess more recent water rights may rights can be severed from the original plot portion of the water is used for agricultural not have access to water in a given year if of land and used for instream benefi cial irrigation purposes and the majority of the the total quantity of water available is less purposes, but must be transferred either to remainder is sprayed on the fi elds surround- than what is claimed by more senior rights. the State of Arizona or a political subdivi- ing the site. A small amount of water is This legal system can greatly confound sion (such as a municipality). Municipalities believed to be lost via evaporation from the restoration of river fl ows, as any water can receive state water credits through pond, while another 6,760 cubic meters per that is returned to the stream via restora- groundwater mitigation; these credits allow year are evaporated through cooling water. tion activities is subject to use by those municipalities to have instream benefi cial with water rights that would not have been uses via the purchase of water rights trans- Watershed History and Trends otherwise satisfi ed. ferred to them. This water banking system This facility currently receives roughly is still under development, but shows promise 75 percent of its water from a municipal However, a legal mechanism does exist that as a means for restoring water in a system water supplier, with the remainder coming can provide protection of any “saved” or controlled by complicated laws. from an on-site, 72-meter-deep borehole. unused water, thereby allowing it to remain in The source of the municipal water is split the river. The specifi c activity under consid- In addition to the pilot, PepsiCo is conduct- roughly evenly between surface water and eration in the Verde is the purchase of water ing other activities to contribute to Positive groundwater. The surface water is primarily rights presently being used for irrigation, Water Impact. For example, the Casa Grande taken from among 18 storage reservoirs and transfer of these rights to an instream Frito-Lay plant has improved its water use that are fi lled by pumping water from local benefi cial use of supporting aquatic life. The effi ciency by 24 percent from 2006 to 2010 rivers during periods of suffi ciently high fl ow. water rights to be purchased must be senior by investing in improvements at the plant. • The municipal water supplier receives its groundwater from wells located throughout the region. Overabstraction of groundwater

11 is a serious concern, and the region in which wastewater, which will require additional the facility is located is the driest in the treatment of wastewater quality. The re-use country. Local rainfall is roughly one half of alternatives under consideration are: 1) more Zhanjiang, the national average, with rainfall narrowly widespread irrigation use to include soft Guangdong exceeding evaporation. Historical changes fruits, 2) direct re-use of the effl uent within in groundwater levels show wide variability the plant not as ingredient water but for Province, across the aquifer, with some wells show- primary washing of apples followed by China Pilot ing no historical decrease in water level utility use, and 3) discharge of the wastewa- and others showing a localized decrease of ter directly to the River Box, the local surface PepsiCo operates a bottling plant in tens of meters. In addition to concern about water body. Zhanjiang, on the eastern coast of the existing overabstraction, government agen- Leizhou Peninsula. This facility is located on an inlet to the South China Sea. cies forecast a signifi cant future increase in The alternatives of increased irrigation and water demand due to an up to 20 percent direct use will both result in decreases in the increase in the population served by the amount of water that needs to be abstracted water supplier by 2035.

Restoration Activities Evaluated Because the facility receives water from a regional surface and groundwater supply as well as a local groundwater aquifer, potentially viable restoration alternatives to be considered are those that: 1) facilitate groundwater recharge to the aquifer local to Mitigation Efforts Under Review the facility, 2) restore fl ows upstream in • Wastewater re-use the municipal water supply watershed, or • Rainwater harvesting at facility 3) reduce abstraction of water from either of • Rainwater harvesting from these areas. As part of this project, The surrounding rural areas Nature Conservancy initially identifi ed a wide range of potential restoration activities for the Boxford facility. Initial preference was given to restoration alternatives that had Water Use in PepsiCo Facilities already been identifi ed at the facility by The annual water use for this PepsiCo facility PepsiCo and their water supplier. PepsiCo is in 2010 was 118,259 cubic meters, with currently considering numerous water re-use 46,069 cubic meters per year leaving the projects, as described below. Wastewater The region in which facility as wastewater. The wastewater is sent re-use will directly support Positive Water the facility is located to the municipal wastewater network and Impact to the extent that it will reduce existing is the driest in the ultimately discharged into the South China Sea. water use. The Boxford plant previously Since the wastewater provides no freshwater evaluated capturing rainwater for direct use country. Local rainfall benefi t, the Positive Water Impact target for in the plant, which would also reduce existing is roughly one half of this facility corresponds to the total water water use, but determined that the small use of 118,259 cubic meters per year minus volume of water available limited the value the national average, the 2,435 cubic meters per year currently of this approach. Other potential restoration with rainfall narrowly being applied for benefi cial re-use, or alternatives were considered but determined 115,824 cubic meters per year. to be poorly suited for the Boxford site. exceeding evaporation. Watershed History and Trends Wastewater Re-Use and will directly contribute to Positive Water Water for this facility is provided from the The Boxford facility currently applies a portion Impact. Additional study will be needed to Xiashan Lindong water plant of the Zhanjiang of their wastewater to agricultural irrigation determine the extent to which direct discharge water company. The utility draws its use. The salinity of the wastewater is currently of the wastewater to the River Box will water from two local wells at 200-meter too high to allow for wider agriculture contribute to Positive Water Impact, because depth. Groundwater abstraction in the irrigation use, as certain local agricultural the river is not the original source of the water metropolitan area began in the 1950s and products (e.g., soft fruits) require water with that is used by the plant. • excessive groundwater withdrawal has been lower levels of dissolved sodium. Plans are identifi ed as a problem in recent decades. being considered for increased re-use of the Water levels at monitoring wells near the city dropped by as much as 30 meters

12 between 1966 and 2004, with a signifi cantly Rainwater Harvesting harvested water can be channelized to a higher rate of decrease since the 1980s.14 The second restoration activity under sunken pond and a recharging pit. Historical consideration was rainfall harvesting to sup- precipitation data, combined with informa- Restoration Activities Evaluated port aquifer recharge. Two types of rainfall tion on the size of the facility, were used in A tiered procedure was used to identify harvesting were considered: 1) harvesting of estimating that 2,550 cubic meters of water potential watershed restoration activities for rainfall directly from the PepsiCo facility and per year can be captured on-site. consideration in this pilot project. The fi rst tier 2) harvesting of rainfall from rural areas. of this procedure was to identify the subset Harvesting of rainfall from rural areas was of all restoration activities that were poten- considered as an additional restoration option tially applicable at Zhanjiang. Since the plant because the total amount of water restored receives its water solely from groundwater, from wastewater re-use and rainfall harvest- potentially viable restoration alternatives to ing from the facility will not be suffi cient to be considered are those that either reduce meet the Positive Water Impact goal for this groundwater abstraction or facilitate ground- site. A rainfall-runoff model based upon the water recharge. Proposals included water Runoff Curve Number method as imple- re-use, municipal water conservation, rain- mented in the Soil & Water Assessment Tool15 water harvesting, and improved irrigation was applied to estimate the amount of runoff practices. The Zhanjiang plant is currently that could be captured via rainwater harvest- providing re-use of some of its treated waste- ing from rural lands. This model requires water on-site for irrigation purposes, and is inputs describing climate, land cover, soil considering expanding this re-use to other type and topography. Daily meteorologi- nearby areas. Benefi cial re-use of wastewater cal data was obtained for Zhanjiang for the therefore qualifi es as a prime candidate for period 2001 to 2010, and local PepsiCo staff consideration. Municipal water conserva- provided soil characteristics. The model tion was not considered in detail because of was applied to determine the amount of the current public perception that water is The fi rst restoration water that could be recharged to the aquifer, inexpensive and plentiful, which would serve beyond what currently infi ltrates under exist- as a serious deterrent to its acceptance. alternative to be quanti- ing conditions. Model results indicate that Improved irrigation practices were not con- fi ed consists of benefi cial 6,000 cubic meters of water per year can be sidered because drip irrigation has already restored per hectare of land devoted to rain- been widely implemented in the area, so that re-use of wastewater fall harvesting. Approximately 20 hectares of further improvements would be expected to effl uent. The plant has rural land would need to be devoted to rainfall provide little additional benefi t. In response to harvesting to restore a quantity of water the above factors, PepsiCo selected benefi cial already implemented this equivalent to the 118,259 cubic meters per re-use and rainwater harvesting as the restora- activity on-site, by using year of water currently used by the facility. tion alternatives to be considered in this pilot. treated wastewater to Other PepsiCo Activities Benefi cial Re-Use of Wastewater Effl uent irrigate lands surrounding PepsiCo is working with the local govern- The fi rst restoration alternative to be the facility. ment to develop a program that would quantifi ed consists of benefi cial re-use of allow their wastewater effl uent to be used wastewater effl uent. The plant has already for irrigation elsewhere in the community, Harvesting of rainfall directly from the implemented this activity on-site, by using thereby reducing the current groundwater PepsiCo facility will provide a relatively low- treated wastewater to irrigate lands surround- extraction. The benefi ts of expanded appli- cost option for returning water to the local ing the facility. A total of 2,435 cubic meters cation of re-use have not been quantifi ed as aquifer. Because the natural vegetation and per year of wastewater is being used on-site part of this project. infi ltration capacity of these areas have • at the plant facility. This re-use directly been disturbed on the plant site, rainwa- offsets irrigation water that would otherwise ter harvesting can help to restore some of be taken from the municipal water supply. It 14 the aquifer recharge function of the site. Zhou Xun et al., “Evolution of the Groundwater provides a restoration benefi t of 2,435 cubic Environment under a Long-term Exploitation in the Harvesting of rainwater from the facility roof Coastal Area near Zhanjiang, China,” Environmental meters per year. This amount of re-use fully Geology 51, no. 5 (January 2007): 847–56. requires remodeling of the roof drainage satisfi es all irrigation needs at the facility, 15 network, including realignment of the collec- Susan L. Neitsch et al., Soil and Water Assessment such that on-site use of treated wastewater Tool Theoretical Documentation: Version 2005, report tion gutters, reconnection of gutter spouts (Temple: U.S. Department of Agriculture—Agricultural, cannot be increased to provide a greater 2005), pp. 1–476. (outlets) to selected downpipes through a amount of restoration. As discussed below, network of horizontal conduits, and installing other benefi cial uses of this waste water are collection chambers fi tted with fi lters at now being investigated. the receiving end of the downpipes. The 13 within its premises; however, these wells are directly on the roof of constructed area, presently not used because the ground water and 2) harvesting of surface runoff in the Sangareddy, quality is insuffi cient to meet plant needs. open areas of the plant grounds. Andhra Groundwater is still being used to support agriculture in the area, but water levels have Harvesting of rainwater from the facility roof Pradesh, been declining steeply over time. Urbanization requires remodeling of the roof drainage India Pilot and industrial growth have led to the progres- network. This would include realignment sive decline of groundwater levels. Nearly a of the collection gutters, reconnection of The bottling plant of Aradhana decade ago, the groundwater level was 30 – 40 gutter spouts (outlets) to selected downpipes Foods & Juices Private Limited, a meters below the land surface, while today it through a network of horizontal conduits, PepsiCo India unit, is located in the is around 70 – 80 meters below the surface. installing collection chambers fi tted with village of Pothireddypalli, near the Based on these observations, the ground- fi lters at the receiving end of the downpipes. township of Sangareddy in the Medak water level has been declining at a rate of The harvested water can be channelized District of south central India. 4 meters per year. Historical fl ow records for to a sunken pond and a recharging pit. the Manjeera River are not available. Historical precipitation data, combined with information on the size of the facility, were Restoration Activities Evaluated used to estimate that 15,290 cubic meters As part of this project, we initially identifi ed per year can be captured on-site. a wide range of potential watershed restora- tion activities for the Sangareddy facility. Harvesting of rainfall can also be conducted Because the plant historically obtained its on the open lands of the plant site, via water from the depleted local aquifer, and capturing runoff in down-slope ponds and now receives water from the Manjeera River, allowing it to infi ltrate into the groundwater. potential restoration alternatives to be con- Since the natural vegetation and infi ltration Mitigation Efforts Under Review sidered are those that either: 1) facilitate capacity of these areas have been disturbed • Rainwater harvesting at facility groundwater recharge to the aquifer local on the plant site, rainwater harvesting can • Rehabilitation of defunct water to the facility, or 2) restore fl ows upstream in help to restore some of the aquifer recharge infrastructure in local villages the Manjeera River watershed. Initial prefer- function of the site. PepsiCo had previously • Improved irrigation practices ence was given to restoration alternatives that estimated the area of open land potentially had already been identifi ed at the facility by usable for surface runoff harvesting. This PepsiCo India in support of its achievement of amount of land, coupled with local precipita- positive water balance. Alternatives included tion data and runoff coeffi cient, was used in Water Use in PepsiCo Facilities rainwater harvesting from the PepsiCo facility estimating that 17,613 cubic meters per year The current water intake for this plant is premises and rehabilitation of defunct water could potentially be harvested from captur - 420,000 cubic meters per year for all infrastructure in local villages. The total ing surface runoff in open areas of the plant purposes. The plant discharges quantity of water potentially restored by these and returning it to the aquifer. 160,000 cubic meters of treated wastewater activities was found to be only a fraction of per year, all of which is applied on plant PepsiCo’s water use, so additional restoration Rehabilitation of Existing Water grounds. This wastewater application is activities would be required to meet the site’s Infrastructure neither creating a benefi cial use nor Positive Water Impact target. The restoration PepsiCo had evaluated opportunities for offsetting the use of another water source. alternative of improved irrigation practices the management of surface water resources The Positive Water Impact target for this was selected due to the capability to restore in the surrounding villages that can be facility corresponds to the total water use of large quantities of water. rehabilitated to increase their water harvesting 420,000 cubic meters per year. It is noted potential, and provide recharge to the locally that expansion of the plant is being Rainwater Harvesting depressed aquifer. Five ponds have been considered, which is likely to increase the Rainwater harvesting is highly applicable identifi ed in the local area, where heavy silt- Positive Water Impact target to an estimated for this site, as it is a practical strategy ing has reduced the water storage capacity 730,000 cubic meters per year in the future. for replenishing the local aquifer that has and the associated groundwater recharge. become depleted through historical and con- The revamping of these fi ve water bodies Watershed History and Trends tinuing use. The short-term intense rainfall through deepening and de-silting can restore This facility currently receives its water from received in this area is a popular choice it to its original capacity and provide surface the Manjeera River. The reservoir formed for harvesting due to effi ciency and magni- water in the local community. PepsiCo has by the dam is the primary source of water tude. Two types of rainwater harvesting estimated the water savings that could supply in the surrounding villages. PepsiCo were considered by PepsiCo to support aqui- result from the revamping of existing water historically drew water from three bore wells fer recharge: 1) harvesting of rainwater falling infrastructures. As per the estimates, the

14 irrigation methods, such as waterlogging and salinity, are also minimal under drip irrigation.16, 17 As a result of water savings, Mexico City, drip irrigation also helps to save a consider- Federal District, able amount of the electrical energy used for lifting water from wells. Water savings associ- Mexico Pilot ated with a change to drip irrigation occur PepsiCo has six food facilities located only when comparing irrigation methods in the Federal District of Mexico City for the same amount of irrigated area and and a beverage facility nearby in crop production. Drip irrigation provides the Mexico State. capability to grow crops on land not otherwise suited for agriculture; if the switch to drip irrigation results in signifi cant expansion of cultivated lands, the amount of water restored will diminish rapidly.

The water savings associated with switching to drip irrigation were estimated from the The short-term intense difference in water consumption reported rainfall received in between drip irrigation methods and fl ood irrigation methods, and calculated to be this area enhances the Mitigation Efforts Under Review 554 millimeters of water per hectare per • Rainfall retention in mountains desirability of rainwater year. Using the appropriate conversion coef- • Restoration of Tláhuac-Xico Lake harvesting both in fi cients, this results in the water savings • Wastewater re-use of 5,540 cubic meters of water per year for terms of effi ciency and every hectare of cotton cultivation con- magnitude. verted to drip irrigation from fl ood irrigation. Approximately 76 hectares of land currently using fl ood irrigation would need to be PepsiCo and The Nature Conservancy revamping would enhance the water recharge converted to drip irrigation to provide water evaluated several local watersheds that potential of the existing water infrastructures savings equivalent to PepsiCo’s current con- provide water to these facilities and selected by a total of 24,100 cubic meters per year. sumption of 420,000 cubic meters per year. the Xochimilco-Tláhuac watershed as the pilot site. The watershed selection criteria Irrigation Management PepsiCo is contributing to Positive Water included the percent of water supply derived Implementation of all of the restoration Impact in other ways beyond those discussed from the watershed, existing stakeholders activities previously identifi ed by PepsiCo and above. The Sangareddy facility is currently working in the watershed, value of the described above would restore 57,000 cubic implementing advanced wastewater watershed to local residents, security, cur- meters per year, which is a fraction of the treatment, including reverse osmosis, to rent land protection status of the watershed, total water use of 420,000 cubic meters per allow a portion of the wastewater it currently and value of and level of threat to biodiversity year. Local villages are actively involved discharges to be used in plant utilities. This in the watershed. Due to the complex- in agricultural practices and improvements in process will reduce the amount of municipal ity of water stewardship in Mexico, The agricultural water use effi ciency, such as water that will need to be supplied to that Nature Conservancy hosted a meeting with irrigation management, which can produce facility and further contribute to our goals. • federal agencies, local agencies, universities considerable water savings. and NGOs as part of the pilot site selec- tion process and during development of restoration activities. The case study results of fl ood and drip 16 Narayanamoorthy, A., Effi ciency of Irrigation: A Case of irrigation methods in a nearby district show Drip Irrigation, Occasional paper—45 (Mumbai: National Bank for Agriculture & Rural Development, Department Water Use in PepsiCo Facilities that water use effi ciency of cotton cultivated of Economic Analysis & Research, 2005), pp. 1–128. PepsiCo’s water use in the basin currently under drip irrigation methods is signifi cantly 17 Narayanamoorthy, A., “Economics of Drip Irrigation in higher when compared with those under fl ood Cotton: Synthesis of Four Case Studies” (paper, 7th averages 500,000 cubic meters per year IWMI-Tata Annual Partners’ Meet, ICRISAT Campus, (an average over 2009 and 2010). This irrigation methods. In addition, environmen- Hyderabad, April 2–4, 2008). tal problems generally associated with fl ood compares to an overall allocated water use in the basin of 4,650 million cubic meters per year. The food facilities are served by the municipal water system, while the beverage

15 facility draws water from on-site groundwater implementation of these activities, the Restoration of Tláhuac-Xico Lake wells. The Mexico City wastewater system is River Basin Commission is hoping to receive The second restoration activity under con- complicated, with several different waste- more federal funding allocated to execution sideration consists of increasing the storage water treatment plants serving the municipal of this ambitious program. The team selected capacity of Tláhuac-Xico Lake, which was a area, so it is not known where the wastewater two of these restoration activities, rainfall freshwater lake until it was drained in the that the PepsiCo facilities send to the retention and restoration of Tláhuac-Xico late 19th century. The goal of the deepen- utility for treatment is ultimately discharged. Lake, for consideration in this project, and ing is twofold: 1) provide increased capacity For this reason, all of the water that the a third potential restoration activity corre- to capture stormwater and reduce fl ood- facilities use is counted toward PepsiCo’s sponding to re-use of PepsiCo wastewater as ing, and 2) provide a sustainable supply of Positive Water Impact goal for this pilot site. a source for industrial cooling water. potable water and reduce the reliance on ground water abstraction. Work required to Watershed History and Trends Retain Rainfall at Higher Elevations accomplish these objectives includes dredg- During the last 50 years, Mexico City and The fi rst restoration alternative consists of ing, development of infrastructure (levees, neighboring municipalities have seen a rapid retaining rainfall in the upper and middle canals) and construction of a water treat- population growth rate. More than 21 million sub-basins of the watershed, through the ment plant that can produce potable water people living in the urban area depend upon use of retention structures and reforestation/ from the lake. the hydrological region “Cuenca del Valle de riparian restoration. Deforestation of the México” for their water supply. Water needs mountains has left the sub-basin vulner- These projects are designed to provide a have increased 30-fold from 1870 to 2007. able to impacts of extreme climate events, future potable water supply of 37.8 million The water for the city has historically been as rainfall is being increasingly converted cubic meters per year. This restoration supplied by groundwater, supplemented in to stormwater runoff instead of infi ltrating benefi t is 75 times greater than PepsiCo’s more recent decades with water from outside into the soils. Urban zones in the lower current water use in the basin, such that the basin that is piped to the city from the basin suffer from increased fl ooding due to PepsiCo would need to provide cost sharing Lerma and Cutzumala basins. Despite stormwater runoff, while the springs disap- for only a small fraction of this project to the importation of water from surface water pear and the area is plagued by fi res and achieve Positive Water Impact. sources, aquifer depletion is still a major loss of moisture and soils. To avoid fl ood- concern. As far back as 1952, hydrologists ing, this stormwater is exported from the Re-Use of Effl uent as Industrial have estimated that the extraction rate basin via pumping. By retaining water in the Cooling Water exceeded the infi ltration rate of the aquifer. upper areas of the watershed, this restora- The third restoration activity evaluated CONAGUA, the federal agency responsible tion alternative can help prevent fl oods and consists of providing PepsiCo’s treated for water management, currently estimates sedimentation, restore forest ecosystems, wastewater to other industrial facilities, in that allocated water uses exceed the and in some cases, restore springs. The order to offset the use of potable water. sustainable supply by more than 30 percent. Commission’s water plan proposes 78 activi- Theoretically, all wastewater generated by ties that will retain all of the runoff generated PepsiCo facilities could be supplied as Restoration Activities Evaluated in normal and extreme storms. The initial re-use, given appropriate conditions. The As part of this project, The Nature Conser- focus will be on construction of stormwater key conditions needed include suffi cient vancy initially identifi ed a wide range of retention structures capable of capturing effl uent quality to meet cooling water potential watershed restoration activities for rainfall peaks and promoting infi ltration. requirements, and industries requiring Mexico City, including agricultural land prac- Upon completion of these civil protec- cooling water supplies located suffi ciently tice changes, stormwater management, land tion measures, work will then be focused near a PepsiCo facility to make construction use alterations, hydraulic/hydrologic water on soil management and forest restoration, of pipelines economically feasible. body alterations, wastewater treatment, required in order to prevent sedimentation water re-use, rainwater harvesting and aquifer and to restore ecosystems. These activities PepsiCo is conducting other activities to recharge. Selection of potential restoration are being coordinated by numerous govern- contribute to Positive Water Impact beyond activities gave high priority to restoration mental and private agencies. the alternatives discussed above. The alternatives that are already being consid- Sabritas Vallejo facility is currently imple- ered at a local level. The Amecameca River These projects are designed to retain 40 mil- menting advanced wastewater treatment, Basin Commission, with the participation of lion cubic meters of water per year in the including reverse osmosis, to allow the major- 25 stakeholder groups, developed a water watershed that would otherwise be lost to ity of the wastewater they currently discharge plan containing objectives directly related to stormwater runoff. This restoration benefi t to be directly re-used in the plant. This specifi c restoration activities. The stakeholders is 80 times greater than PepsiCo’s current process will greatly reduce the amount of included municipalities, civic organizations, water use in the basin, such that PepsiCo municipal water needed to supply that facil- state environment and agriculture agencies, would need to provide cost sharing for only ity, thereby allowing more water to remain the national water authority, and the secre- a small fraction of this project to achieve in the aquifer and surface water bodies that tariat of environment and natural resources. Positive Water Impact. supply these facilities. • Since funding is usually the roadblock for

16 Design: Addison www.addison.com watersheds. Each watershed is impacted by solutions inherently are unique to individual and problems water-related the that is work of during this phase emphasis important An operates. PepsiCo in where the watersheds of all ofthe users other water risks the to butalso address risks, scarcity water notjustintendedare to reduce PepsiCo’s actions These this stress. actions to address of andto develop aportfolio stress of water risk at areas identify to PepsiCo allow will This system. approach the PepsiCo across refi to inform will we applied used be the methodology as learned lessons The and opportunities. with uniquechallenges water resources, the application ofthis atpilot approach sites allowed oftheThis project usto phase test Next? We Doing Are What Conclusion nement future for application both within the PepsiCo system and in and system within PepsiCo the both future this of methodology, applications that integrated be into can lessons provides At time, theall same this users. water work the ofboth environment the needs meet and to improve the availability ofclean to water apply can in and others the watershed resulted in asuite ofactions that PepsiCo ofthesustainability use ment ofwater individual For each twofold. site, the assess- ultimateThe value ofthis is ofwork phase inuse the watershed. solutions to ensurethe sustainability ofwater in each catchment andto develop practical situation the water truly understand to taken be to needs effort that so setting, hydrologic in aparticular a unique users ofwater set and the costs and benefi to reduce the impacts and risks of water use were developed, use risks and impacts determined. Finally, restoration activities optimal watersheds were selected for assessment, and water and the limits of the study area. Within this area of infl indicating the spatial extent of possible water use impacts At each of these locations, the area of infl water scarcity as indicated through abroad global assessment. risk. It began with selecting the pilot sites based on areas of practical path forward for corporations wishing to address this methodology applied at the fi andassess address this risk becomes more critical. The corporations around the world, the need for approaches that concernAs about water-related risk continues to grow for ts of these activities estimated. activities these of ts ve PepsiCo pilot sites offers a still being explored and assessed. and explored still being Phase Two ofPositive Water Impact were specifi publication, report’s this of time the At programs. andprospective existing partners with both to truesynergies provide leveraged be can initiative Impact Water Positive In addition, wecontinue to explore howthe the company operates. in all in which ofthe stress watersheds water of assessment for developing time aprocess Positive Water Impact, while atthe same pilot that sites atthese ties will help achieve PepsiCoactivi- isselect now operate. to able users water large where other watersheds c initiatives andfunding levels for uence was delineated, was uence uence, uence, About PepsiCo PepsiCo offers the world’s largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that generate more than $1 billion in annual retail sales each. Our main businesses—Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi Cola—also make hundreds of other enjoyable foods and beverages that are respected household names throughout the world. With net revenues of approximately $60 billion, PepsiCo’s people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo’s promise to provide a wide range of foods and beverages for local tastes; to fi nd innovative ways to minimize our impact on the environment, including by conserving energy and water usage, and reducing packaging volume; to provide a great workplace for our associates; and to respect, support and invest in the local communities where we operate. For more information, please visit www.pepsico.com.

About The Nature Conservancy The Nature Conservancy works to signifi cantly improve the health of globally important natural systems in ways that enhance the lives of people by making conservation a central part of solving critical challenges facing our world.

Technical assistance for this pilot project provided by LimnoTech.

Published in 2011