2014 GRI Report 043096 PEP RPT14 GRI V10 10/02/15 Page 1
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PepsiCo 2014 GRI Report 043096 PEP_RPT14_GRI_v10 10/02/15 page 1 Performance with Purpose 2014 GRI Report PepsiCo 2014 GRI Report 043096 PEP_RPT14_GRI_v10 10/02/15 page 2 Table of Contents 2 PepsiCo 2014 GRI Report Table of Contents CEO Letter 3 About PepsiCo 5 Performance with Purpose 6 Stakeholder Engagement 10 Material Aspects & Boundaries 17 Public Policy & Political Engagement 21 Human Sustainability 23 Innovating Healthier Options 28 Responsibly Marketing Our Products 36 Pepsico Quality and Food Safety 42 Environmental Sustainability 45 Water 53 Climate Change 58 Agriculture 64 Packaging and Waste 69 Talent Sustainability 74 Talent Attraction, Engagement & Growth 78 Diversity & Engagement 85 Workplace Safety 90 Human Rights 94 Global Citizenship 97 Corporate Governance, Risk Management and Compliance 102 GRI Index 116 Independent Verification Letters 125 PepsiCo 2014 GRI Report 043096 PEP_RPT14_GRI_v10 10/02/15 page 3 CEO Letter 3 PepsiCo 2014 GRI Report CEO Letter On the surface, profit is a word that to support with the profits we make, but rather a path to delivering is easily defined: to make money. profitability. Weaving sustainability into the very fabric of our organization is In reality, however, that definition is a way to help future-proof our business for the changing world around us. incomplete. In a world that is being radically reshaped by sweeping At PepsiCo, we focus on three pillars of sustainability: Human, Environmental forces of change — from technological and Talent. We are working to improve the nutritional profile of our products innovation and globalization to and offer a wider selection of nutritious foods and beverages in response resource scarcity, climate change to growing consumer demand. We are striving to reduce our impact on the and public health challenges — how environment and conserve natural resources, reducing our operating costs companies make money is just as in the process. And we are continuously investing to build a diverse and important as how much money engaging culture inside PepsiCo that allows us to attract the next generation they make. of talent we need to propel our company forward. Without question, profits are the These three pillars form the foundation of what we call Performance with engine that propels a corporation Purpose, and they help to drive our financial results. The report that follows forward. But the blind pursuit of describes the significant progress we made in each of these areas in 2014. profit at all costs is untenable. It is essential that we make money the right We are particularly proud to report that PepsiCo achieved four of our way. After all, if communities suffer as a result of a company’s actions, those environmental goals ahead of schedule. returns are not sustainable. It is clear that in the years and decades ahead, the private sector will be Today, a company’s profits are inextricably tied to the prosperity of its increasingly impacted by global environmental and social challenges that consumers, customers, employees, communities and society writ large. no single company, industry, government or nongovernmental organization More than ever before, profitability and sustainability are synonymous. (NGO) can address alone. Collaborative solutions, in which we all play our role, hold the key to meaningful and lasting progress. Corporations should embrace this new way of doing business. Profitable companies of the 21st century will be those that align the needs of their The strongest cross- sector partnerships flourish when each member business with the needs of the world around them. engages in constructive dialogue. This dialogue is, at times, lacking today. For example, the relationship between corporations and some NGOs can With this in mind, PepsiCo looked out across the food and beverage be purely adversarial. While NGOs should absolutely push hard for companies landscape nearly a decade ago and charted a new course. We recognized to change, they should also acknowledge when companies set thoughtful a simple truth: there is profit in purpose. Sustainability is not something goals and take serious steps to achieve them. We share many common PepsiCo 2014 GRI Report 043096 PEP_RPT14_GRI_v10 10/02/15 page 4 4 PepsiCo 2014 GRI Report CEO Letter objectives and must find more opportunities to join hands rather than simply In this report, you will see how we are achieving progress through sustainable pointing fingers. agricultural practices, innovative methods of water conservation, more nutritious product offerings and more diverse workplaces. These efforts don’t For our part, PepsiCo is fully committed to engaging partners who seek come at the expense of profit. Rather, they are examples of just some of the progress on our shared challenges. We are proud of the relationships we have work underway that we are confident will help fuel our profits for generations built with many highly respected organizations around the world. Moving to come. forward, we intend to expand and strengthen these partnerships. The NGO community brings in-depth experience and local knowledge that is critical Sincerely, to solving big problems, and we will continue seeking new opportunities to work together on topics most significant to our business and on which we can make a meaningful impact. Simply put, we need cooperation at all levels. As such, the private sector Indra K. Nooyi must step forward and offer its unique capabilities to develop new solutions, Chairman and CEO uncover new opportunities and, ultimately, build the viable, trusted companies of tomorrow. That is why PepsiCo is more committed to Performance with Purpose than ever before. It is how we will position our business for sustainable long-term growth and contribute to solving broader challenges that impact each and every one of us. I invite you to offer your comments on this report and PepsiCo’s Performance with Purpose journey via email at [email protected] PepsiCo 2014 GRI Report 043096 PEP_RPT14_GRI_v10 10/02/15 page 5 About PepsiCo 5 PepsiCo 2014 GRI Report About PepsiCo 2014 Financial Highlights PepsiCo is a leading global food and beverage company PepsiCo products are enjoyed by consumers in more than that generated more than $66 billion in net revenue in 2014, driven by a complementary portfolio that includes >$66.6B $70.5B Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. Net revenue Total assets PepsiCo’s product portfolio includes a wide range of countries200 and territories around enjoyable foods and beverages, including 22 brands that the world. generated more than $1 billion each in estimated annual $ B $ B retail sales in 2014 and more than 10 brands that each Approximate headcount, as of 12/27/2014 53.0 17.5 generate between $500 million and $1 billion in estimated Total liabilities Total equity PEPSI_S1_2PMS_NB_SM (FOR USE .25" TO 1.5") annual retail sales. PANTONE PANTONE 2945 185 271,000 $ B $ Current global divisions* 8.7 4.27 Share repurchases Diluted earnings and dividends per share • Frito-Lay North America • Quaker Foods North America PEPSI_S1_2PMS_NB_MEDIUM (FOR USE 1.5" TO 4") PANTONE PANTONE 2945 185 • North America Beverages PepsiCo is a publicly traded company. The New York Stock Exchange is $ B % the principal market for PepsiCo common stock, which is also listed on the • Latin America 23.8 25.1 Chicago Stock Exchange and SIX Swiss Exchange. • Europe Sub-Saharan Africa Long-term debt Annual tax rate • Asia, Middle East and North Africa Company’s headquarters Mix of 2014 net revenue Value chain are in Purchase, New York. Food 53% U.S. 51% Beverage 47% Outside U.S. 49% Sourcing & Manufacturing Marketing Distribution Customer, Agricultural & Packaging & Sales Consumer Use PEPSI_S1_2PMS_NB_LARGE (4" AND LARGER) Raw Materials & End of Life PANTONE PANTONE 2945 185 CYAN 100 CYAN 0 To convert the PEPSI logo to 4 - color process MAGENTA 69 MAGENTA 100 *Effective as of the company’s third quarter of 2015. please use these values; YELLOW 17 YELLOW 82 BLACK 3 BLACK 0 PepsiCo 2014 GRI Report 043096 PEP_RPT14_GRI_v10 10/02/15 page 6 Performance with Purpose 6 PepsiCo 2014 GRI Report Performance with Purpose Performance with Purpose G4-56 Performance with Purpose is our vision to deliver top-tier financial performance over the long term by integrating sustainability into our business strategy, leaving a positive imprint on society and the environment. We have established 10 strategic goals across our key impact areas — our products, the environment and our people — to bring our vision to life. HUMAN SUSTAINABILITY ENVIRONMENTAL SUSTAINABILITY TALENT SUSTAINABILITY We work to improve the nutritional profile of our We work to minimize our overall impact on the We work to build a culture of diversity and products and offer a wider selection of nutritious environment and to conserve natural resources engagement, and to ensure those in our supply foods and beverages, which we strive to market throughout our operations and our supply chain. chain are supported and treated with respect. and sell responsibly. Goals Goals Goals • Continue to refine our food and beverage • Help protect and conserve global water • Create a safe, healthy, diverse and inclusive choices to meet changing consumer needs by supplies, especially in water-stressed areas, and workplace that reflects the global communities reducing sodium, added sugars and saturated provide access to safe water in which we operate fats, and developing a broader portfolio of • Innovate our packaging to make it increasingly