Why PepsiCo is Changing its Renewable Energy Strategy

Why PepsiCo is Changing its Renewable Energy Strategy

This month, the Environmental Protection Agency (EPA) will release its quarterly Green Power Purchasers list. After a long run as a top purchaser of Renewable Energy Certificates (RECs), PepsiCo will not be on the list.

With the evolution of our sustainability strategy, we are establishing new and even more aggressive environmental performance goals, and as a result, our investment priorities are changing.

After thorough review at the highest levels of our company, we have made the strategic decision to reduce our participation in the RECs market in order to focus on direct investments that will accelerate our use of alternative energy sources to power operations at the facility level throughout the PepsiCo network.

As part of this, we will be investing more than $30 million dollars in the next three years to develop new renewable energy projects in the U.S.

Some of the projects for this investment could include installation of a biomass boiler for a snack food facility; installation of solar photovoltaic and thermal generation in California beverage plants; development of bio-gas energy in Florida; and various photovoltaic projects at distribution centers or other facilities.

We made this decision as part of our process to constantly evaluate ways to reduce our environmental impact. Our strategy has advanced to a point where it makes the most sense to invest in alternative energy projects within our own operations. This decision emphasizes our commitment to reduce our environmental footprint through direct actions and investment in our own facilities and where possible, those of our suppliers.

Just a few weeks ago, these efforts were recognized by the EPA Energy Star Program. We were again honored as Partner of the Year with Sustained Excellence in large part for programs that extend energy savings beyond our own facilities to our supply chain.

We are proud that our investment in RECs has stimulated the development of renewable energy in the U.S. over the past few years, and motivated others to follow. PepsiCo took a substantial early position in the RECs market and we are pleased to see that it has developed strongly since. At the time, the options for investing directly into alternative and renewable energy were not as robust or economic as they are today. Now, we believe we can have a greater impact on carbon reduction by developing renewable and alternative energy solutions at a facility level.

Throughout our organization, we remain committed to evolving our use of renewable energy operations and will continue to make a concerted effort to replace our existing use of oil, gas and fossil fuels in manufacturing with renewable energy sources. RECs played a central role in our sustainability journey so far, and we are excited to embark on this next phase.

Rob Schasel is director of energy and resource conservation at PepsiCo.