PepsiCo reaping rewards of sustainable supply chain

PepsiCo is among those businesses benefiting from sustainable procurement, with the US beverage giant uncovering more than $60 million in energy savings opportunities.

The Carbon Disclosure Project 2011 Supply Chain Report, produced by management consulting firm A.T. Kearney, looked at climate change actions and performances of 57 leading global companies and 1,000 of their suppliers across a broad cross-section of industries.

It found that more than half of large businesses and 25 percent of their suppliers have seen cost savings as a result of carbon management activities and a return on investment from embedding sustainable practices into the procurement function.

PepsiCo experienced a 16 percent reduction in per-unit energy use across its beverage plants as a result of its carbon management strategy and proprietary energy assessment tool.

“With a robust strategy and proven benchmarks in place, PepsiCo set out to engage and educate suppliers about potential opportunities to innovate their own operations,” said Walter Todd, Vice-President of Operations, PepsiCo UK & Ireland.

“By providing suppliers access to the same energy assessment tools we use in our own operations, we’ve seen mutual return on investment,” he added.

Carbon Disclosure Project

The report looked at companies that are part of the Carbon Disclosure Project (CDP), an independent not-for-profit organisation holding the largest database of primary corporate climate change information in the world.

Firms in the report included Google Inc, Kraft Foods, Vodafone Group, Sony Corporation and IBM.

The project found that 79 percent of CDP Supply Chain member businesses now employ a formal climate change strategy, up from 63 percent in 2009.

“We’re seeing a shift among leading companies in the way they are implementing sustainable, quantifiable climate change policies and practices, said Frances Way, Program Director, CDP.

“What’s encouraging is that suppliers and large purchasing corporations alike are starting to realize the commercial benefits as a result of collaboration,” he added.