cbi low-carbon business breakfasts: andrew smith, pepsico uk
DESCRIPTION
Presentation by Andrew Smith, head of corporate responsibility, PepsiCo UK, at the CBI's low-carbon business breakfast. London, 15 April, 2010.TRANSCRIPT
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We can get by
with a little
help from our
friends
CBI low-carbon business breakfast
Can low carbon business be
profitable?
Andrew Smith
Head of Corporate Responsibility
PepsiCo UK & Ireland
(+44) 07912 971090
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The brief from the CBI:
“Supply chain carbon: measurement and reduction”
“Can low carbon really be profitable?”
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3
•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?
CBI low-carbon business breakfast
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Who we are
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Isn’t climate change falling off the agenda?
The Guardian
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Climate change will have profound impacts…
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...which have already begun…
Walkers potato
crops, 2009
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…and impact the bottom line
£360 / tonne , April 07
£950 / tonne, April 08
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9
Continuous Improvement
2008-11 targets2008-11 targets
Renewable EnergyEnergy Water Waste
- 20%- 45%- 20%
+ 80%
A strategic response
Transformational change
Cupar Bio mass Waste oil Bio diesel Skelmersdale wind turbine
Achieve zero landfill waste
across our total supply
chain within 10 years
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
Achieve zero water intake at our
Walkers Crisps manufacturing sites
within 10 years
All energy used in PIUK manufacturing
and distribution to be from renewable
sources within 15 years
All energy used in PIUK manufacturing
and distribution to be from renewable
sources within 15 years
Fossil free, largest factories zero water,
zero landfill supply chain….
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10Progress
All energy used in PIUK manufacturing
and distribution to be from renewable
sources within 15 years
All energy used in PIUK manufacturing
and distribution to be from renewable
sources within 15 years
En
erg
yE
ne
rgy
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11Progress
All UK manufacturing sites now at zero landfill
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12
CARBON REDUCTION –
SUPPLY CHAIN
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13
59% Of Footprint
Outside Our Own Operations
Transport Disposal
30%
Processing
Cooking
9% 2%
Sunflower
growing
Potato
growing
Seasoning
Packaging
75g Of Carbon
Per Packet Of Walkers Crisps
Measuring the footprint of Walkers Crisps
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14A commitment to reduce
•Carbon Reduction Label - launched on Walkers in March 2007
•A transparent commitment to reduce
•Our hopes:
ogalvanise our business and our suppliers / farmers
oraise public awareness on carbon
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15
Engaging our suppliers
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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.”
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17
Reduction delivered
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18Our footprint reduced by 7%, and we saved money
2007 - 2009 7% Reduction Breakdown
50
55
60
65
70
75
80
85
90
2007
(Reba
selin
ed)
Potato
trans
port
Corruga
te
Man
ufactu
ring -
Gas
Man
ufactu
ring -
Electri
city
Other
2009
Lab
el
g.C
O2.
equ
iv
• 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
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19
Brand and consumer benefits
Source: Populus 2007-2009
2007 20090%
10%
20%
30%
40%
50%
60%
41%
47%42%
39%
8%
15% 14% 13%
It [Carbon Reduction
Label] makes me more
likely to buy their
products:
Companies will be more motivated to
reduce their carbon emissions if they
show the exact footprint on pack:
10%
46%
44%
Agree
Disagree
Neither/don’t know
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20
44% Agriculture
30% Processing – cooking
9% Transport
2% Packaging
disposal
15% Packaging supply chain
The next stage: agriculture
Walkers footprint:
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21
On-farm research > action
•ADAS -Sustainable Potato Project
•KPIs, metrics and improvement plans
developed around carbon, water,
agrochemical and energy hotspots
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22
CAN LOW-CARBON
BUSINESS BE PROFITABLE?
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23In reality, we can’t be high carbon and profitable…
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Drivers for low carbon
Next Government will have
to introduce a range of tax
rises and spending cuts
Public Sector borrowing >
£300 billion over next three
years
Need to ‘plug the gap’
Waste, pollution and
environmental damage
attractive targets
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“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”
Drivers for low carbon
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Learnings
•Identify hotspots across the supply chain, and pursue them
•Transparency can drive positive change
•Share your insights
•Independent partners help
•Realise your influence
Why are we finding it
so much harder to plan
for / report on
adaptation than
manage and measure
mitigation?
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We can get by
with a little
help from our
friends
CBI low-carbon business breakfast
Can low carbon business be
profitable?
Andrew Smith
Head of Corporate Responsibility
PepsiCo UK & Ireland
(+44) 07912 971090