CBI low-carbon business breakfasts: Andrew Smith, PepsiCo UK

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Presentation by Andrew Smith, head of corporate responsibility, PepsiCo UK, at the CBI's low-carbon business breakfast. London, 15 April, 2010.

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  • May be its me & my memory, however this sort of event seems to happen more frequentlyIts a picture of one our supplier potato fields earlier this year – after a flash flood
  • May be its me & my memory, however this sort of event seems to happen more frequentlyIts a picture of one our supplier potato fields earlier this year – after a flash flood
  • CBI low-carbon business breakfasts: Andrew Smith, PepsiCo UK

    1. 1. CBI low-carbon business breakfast Can low carbon business be We can get by profitable? with a little help from our friends Andrew Smith Head of Corporate Responsibility PepsiCo UK & Ireland andrew.i.smith@intl.pepsico.com (+44) 07912 971090
    2. 2. The brief from the CBI: “Supply chain carbon: measurement and reduction” “Can low carbon really be profitable?”
    3. 3. 3 CBI low-carbon business breakfast • PepsiCo (and why climate change matters to us…) • Supply chain footprint & reduction: • Measurement and Disclosure: carbon reduction label • Partnership: supplier engagement • Learnings • Can low carbon be profitable?
    4. 4. Who we are
    5. 5. Isn’t climate change falling off the agenda? The Guardian
    6. 6. Climate change will have profound impacts…
    7. 7. ...which have already begun… Walkers potato crops, 2009
    8. 8. …and impact the bottom line £950 / tonne, April 08 £360 / tonne , April 07
    9. 9. 9 A strategic response Continuous Improvement Transformational change Renewable Energy Water Waste Energy All energy used in PIUK manufacturing and distribution to be from renewable sources within 15 years + 80% Achieve zero landfill waste across our total supply chain within 10 years Achieve zero water intake at our Walkers Crisps manufacturing sites within 10 years - 20% - 45% - 20% 2008-11 targets Cupar Bio mass Waste oil Bio Skelmersdale wind diesel turbine Fossil free, largest factories zero water, zero landfill supply chain….
    10. 10. 10 Progress Energy All energy used in PIUK manufacturing and distribution to be from renewable sources within 15 years
    11. 11. 11 Progress All UK manufacturing sites now at zero landfill
    12. 12. 12 CARBON REDUCTION – SUPPLY CHAIN
    13. 13. 13 Measuring the footprint of Walkers Crisps 75g Of Carbon Per Packet Of Walkers Crisps Potato growing Processing Cooking Transport Disposal Sunflower growing Seasoning 30% 9% 2% 59% Of Footprint Packaging Outside Our Own Operations
    14. 14. 14 A commitment to reduce • Carbon Reduction Label - launched on Walkers in March 2007 • A transparent commitment to reduce • Our hopes: o galvanise our business and our suppliers / farmers o raise public awareness on carbon
    15. 15. 15 Engaging our suppliers
    16. 16. 16 Supplier feedback Gerald Rebitzer, Global Director Product Stewardship, Alcan Packaging: "Our collaboration with Walkers has been unprecedented. We’ve swapped information, expertise, and ideas with all the partners in the value chain. This value chain cooperation can be seen as a role model to implement life cycle thinking in practice – an essential element towards more sustainable products.”
    17. 17. 17 Reduction delivered
    18. 18. 18 Our footprint reduced by 7%, and we saved money • 7% reduction of footprint between 2007 and 2009 • Equal to 6g of CO2e per standard bag of Walkers • Overall saving of 4,800 tonnes of CO2e • Cost savings of £400,000 over two years 2007 - 2009 7% Reduction Breakdown 90 85 80 g.CO2.equiv 75 70 65 60 55 50 te ) l as er rt ty be ed po ga th ci -G La in ri O ns rru el ct 09 g tra as le Co in -E 20 eb ur to t (R ta ac g in Po uf 07 ur an 20 t ac M uf an M
    19. 19. Brand and consumer benefits 19 It [Carbon Reduction Companies will be more motivated Label] makes me to reduce their carbon emissions if more likely to buy they show the exact footprint on their products: pack: 60% 10% Disagree 50% Neither/don‟t know 47% 40% 41% 42% 44% 39% 30% Agree 20% 10% 15% 14% 13% 46% 8% 0% 2007 2009 Source: Populus 2007-2009
    20. 20. 20 The next stage: agriculture Walkers footprint: 44% Agriculture 30% Processing – cooking 15% Packaging supply chain 9% Transport 2% Packaging disposal
    21. 21. 21 On-farm research > action • ADAS -Sustainable Potato Project • KPIs, metrics and improvement plans developed around carbon, water, agrochemical and energy hotspots
    22. 22. 22 CAN LOW-CARBON BUSINESS BE PROFITABLE?
    23. 23. In reality, we can’t be high carbon and profitable… 23
    24. 24. Drivers for low carbon Next Government will have to introduce a range of tax rises and spending cuts Need to „plug the gap‟ Waste, pollution and environmental damage attractive targets Public Sector borrowing > £300 billion over next three years
    25. 25. Drivers for low carbon “We should reduce uncertainty over the future price of carbon. Taxation can help to provide a floor beneath which the price of carbon will not fall. The Climate Change Levy needs to be replaced by a Carbon Levy…a tax on carbon”
    26. 26. Learnings • Identify hotspots across the supply chain, and pursue them • Transparency can drive positive change Why are we finding it • Share your insights so much harder to plan for / report on adaptation than • Independent partners help manage and measure mitigation? • Realise your influence
    27. 27. CBI low-carbon business breakfast Can low carbon business be We can get by profitable? with a little help from our friends Andrew Smith Head of Corporate Responsibility PepsiCo UK & Ireland andrew.i.smith@intl.pepsico.com (+44) 07912 971090

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