PepsiCo prices $1bn green bond to assist with plastics phase-out

The green bond was led by Morgan Stanley

PepsiCo’s $1bn green bond will improve actions on sustainability across numerous areas. Notably, the green bond will assist the company’s new target to reduce the use of virgin plastic across its portfolio by 35% by 2025, which will eliminate around 2.5 million metric tonnes of the material from circulation.

The target, measured against a 2018 baseline, builds on existing goals to make 100% of PepsiCo’s packaging recyclable, compostable, or biodegradable; and increase its use of recycled content in plastics packaging to 25%, agreed as part of the firm’s commitment to the UK Plastics Pact.

The green bond was led by Morgan Stanley, which launched a dedicated plastics financing platform earlier this year. The Morgan Stanley Institute for Sustainable Investing’s Plastic Waste Resolution is aimed at engaging all stakeholders to develop and scale solutions that negate the impacts of plastics waste.

By 2030, Morgan Stanley is aiming to prevent, reduce and remove at least 50 million metric tons of plastic waste entering rivers, oceans, landscapes and landfills. 

“PepsiCo is deeply committed to using our scale for good and advancing the purpose behind our sustainability agenda: to help build a more sustainable food system,” PepsiCo’s chief executive Ramon Laguarta said.

“Issuing a bond focused on environmental sustainability reflects our deep commitment to the priorities laid out in our recent Sustainability Report and represents another step in our plan to become a faster, stronger, better company.”

EVs and water stewardship

The appeal of green bonds and sustainable finance is growing, with the world’s largest investor BlackRock claiming that green finance has gone mainstream. The firm’s latest global insights report reveals that around $760bn (£581bn) was invested in dedicated sustainable funds across the US and Europe last year, up from $453bn (£346) in 2013.

PepsiCo’s green bond will also be used to finance projects in the supply chain that utilises clean transport and replace old cars with electric vehicles (EVs). PepsiCo has a target to reduce absolute emissions across its value chain by 20% by 2030, from a 2015 baseline.

Funding will also be allocated in high water-risk areas, where PepsiCo aims to replenish 100% of the water it consumes in its manufacturing operations. Funding will be used to boost water efficiency measures, recycling and reuses as well as providing farmers with alternative crop rotation and access to drip irrigation.

The company has also announced president and chief marketing officer Simon Lowden as its first chief sustainability officer.

“I am proud PepsiCo has issued its first Green Bond to address global challenges like carbon emissions, access to clean water, and plastic waste, and that the company continues to be a leader in tackling critical sustainability issues,” Lowden said.

Green finance at edie’s Sustainability Leaders Forum

edie’s Sustainability Leaders Forum returns in 2020, as some of the biggest companies, individuals and organisations championing sustainability gather at the Business Design Centre on 4 & 5 February.

Green finance will be a key discussion point, with speakers including Green Finance Institute CEO Rhian Mari Thomas, M&G Investment’s head of responsible investment and ESG Anita McBain and Aviva Investors’ global head of governance Mirza Baig. 

Other keynote speakers at this flagship, multi-award-winning event features include Mary Robinson, former President of Ireland; Rebecca Marmot, Unilever CSO; Tom Szaky, TerraCycle CEO and Gilbert Ghostine, Firmenich CEO. For details and to register visit:https://event.edie.net/forum/

Matt Mace