Pepsico Inc. : Climate Change

1045 WordsOct 22, 20155 Pages
As climate change becomes a topic of interest for the corporate boardrooms of the modern world, there are signs of a growing awareness of the finiteness of the planet’s resources among today’s entrepreneurial minds. Few of these minds occupy administrative positions in PepsiCo’s chain of command, and the company follows suit with its strategic efforts at sustainability. Having already surpassed their 2006 target of 20 percent by the end of 2015, the company managed to reduce water use per unit by 23 percent by 2014 (PepsiCo Inc., 2015). Moreover, in improving water efficiency, the company decreased absolute water use by 1 billion liters (PepsiCo Inc., 2015). In addition, the company also surpassed their aim of sending 10 percent of…show more content…
Given as the capitalistic world is not all too convinced by altruism, these investments are unjustified to the entrepreneurial mind if they exist only to detract from the company’s profitability. However, analyzing the short-term and long-term consequences for the company’s operations and workforce, its consumers, and its shareholders, it can be argued that environmentally responsible decisions can contribute to its profitability. Starting with the micro-economic perspective, the sustainable initiatives by the company reduce the company’s operational costs in the short-term, and create a beneficial internal culture in the long-term. In 2014, PepsiCo realized immediate savings from its initiatives, as would be expected from a reduction of necessary inputs. By reducing the water use per unit of production, the company saved approximately $17 million in 2014 alone (PepsiCo Inc., 2015). Efficient use of energy sources provided an estimated cost saving of more than $83 million (PepsiCo Inc., 2015). Additionally, emission-reduction initiatives, reductions in packaging costs, and reduction in landfill waste saved $62 million, $48 million, and $3.5 million respectively (PepsiCo Inc., 2015). Now, by large these initiatives were implemented strategically, it was not simply a
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