Best ESG reporting (large cap) PepsiCo
Anna Palazij, PepsiCo
PepsiCo takes ESG reporting very seriously, and it shows: this is the second year in a row the company has won an award for its efforts. The degree to which PepsiCo takes this work seriously is evident in the range of reporting, the level of detail it contains, the extent of data verification and the continuous evolution of its approach and content.
The broad scope of reports and reporting in 2020 and the first half of 2021 includes an all-digital sustainability report and a first report on the use of proceeds from PepsiCo’s inaugural green bond – and its estimated impact.
The company also produces an ESG topics A-Z, a web-based resource designed to address in detail the broad range of sustainability-related topics that matter to the business and key stakeholders. In 2021 the company added four new pages to the A-Z related to its green bond, breast-milk substitutes, open innovation and sustainable product design. It also enhanced its reporting on data governance, talent, product safety and quality and stakeholder engagement.
In June 2021 the team refreshed PepsiCo’s web-based deep-dive sustainability resource to improve navigation by grouping almost 50 topics across the themes of agriculture and sourcing, environmental impact, product and nutrition, people, ethics and governance and sustainability management. It began using a more consistent structure highlighting why each issue matters and the company’s approach, progress, strategic engagement and next steps on each topic. The team also introduced new digital navigation tools designed to help visitors access topics more easily.
Data integrity and data governance are vital to maintaining trust between PepsiCo and our stakeholders
Investors are keen to see companies set down ESG-related goals and are pressing harder to see issuers disclose their progress toward those targets.
PepsiCo in 2021 released an update highlighting its progress against the company’s racial equality journey commitments over the previous 12 months. Anna Palazij, vice president for ESG reporting and strategic investments, says diversity, equity and inclusion is a business imperative and PepsiCo wants to track progress both within the firm and in the wider community.
The company also published workplace demographics tracking progress against PepsiCo’s gender parity and managerial representation goals, and published new climate and regenerative agriculture goals.
The breadth of this ESG reporting is impressive and, in the company’s 2020 sustainability report, CEO and chair Ramon Laguarta outlined an ambition to combine all of this disclosure into one report to further increase transparency and provide greater clarity for stakeholders.
Palazij says the aim is to complete this shift in 2022 and that the announcement shows ESG is at the core of the business.
Data integrity ‘Data integrity and data governance are vital to maintaining trust between PepsiCo and our stakeholders,’ the company states in its submission, adding that this past year its reporting has explained steps taken to improve the robustness of its disclosures.
These include aiming to set science-based targets, investment in digital means to streamline and automate data collection and collaboration, and making disclosures aligned with several ESG reporting frameworks such as GRI, TCFD and – for the first time last year – SASB. The company has included disclosures related to its two most closely aligned sectors under the SASB framework: processed foods and non-alcoholic beverages.
In seeking consistent, comparable and reliable disclosures, all public reporting must pass through multiple reviews, including by legal, corporate control, the sustainability office, subject matter experts and a disclosure committee. Certain sustainability metrics also gain external assurance and those metrics are indicated on PepsiCo’s performance metrics sheet.
Not only does the company take all these steps, but it also shows its working by describing how it calculates key sustainability performance metrics in a methodology download.
