PepsiCo

At a Glance

Industry

Consumer Packaged Goods

Project Types

Goals/Targets, Supply Chain, Sustainability and Energy Management Strategy

Year

2024

Location

Summary

Yaqub Adediji joined PepsiCo to help advance its ambitious climate goals as part of PepsiCo Positive (pep+), the company's strategic end-to-end business transformation. Yaqub evaluated existing and potentially new tactics aimed at motivating suppliers in developing decarbonization action plans as well as models and tools that can effectively build strategic partnerships, incentivize or disincentivize suppliers, and assess the costs of carbon reduction.

Goals

Yaqub was enlisted to support PepsiCo's ongoing decarbonization journey through the following: 1. Evaluate and analyze various options, both existing and potentially new tactics to motivate and engage suppliers along the company's pep+ journey, including development of credible decarbonization plans. 2. Create a Performance System Model (PSM) to recommend motivational tactics to engage and advance PepsiCo's suppliers in their decarbonization journey. The PSM needs to link to PepsiCo's existing Leader Ladder Framework, providing additional guidance for suppliers on education needs and helps to build strategic partnerships or incentivizes/disincentivizes supplier activities. 3. Identify potential financial scenarios based on the different factors and highlights the link to emissions reductions. 4. Estimate "cost" of carbon reduction spanning financial and environmental impacts.

Solutions

1. Identified key challenges for supplier decarbonization and developed tactics to better motivate and engage suppliers along the pep+ journey. 2. Conducted a comprehensive analysis of best practices from other companies, and recommended strategies that could be effectively tailored to meet PepsiCo's supplier engagement needs. 3. Developed an Excel-based tool that outlines key emissions contributors and provides recommendations on potential decarbonization levers that suppliers and PepsiCo can deploy to reach climate goals. 4. Designed a Performance System Model that links to PepsiCo's existing Leader Ladder which either shows where capability building is needed or fosters strategic partnerships or incentivizes/disincentivizes suppliers' activities based on their sustainability efforts 5. Created a financial model that estimates the impacts of carbon reduction when using a pay-for-performance approach, helping PepsiCo to further assess the financial impact of incentivizing or disincentivizing suppliers' actions.

Potential Impact

Yaqub's contributions have provided PepsiCo with key data points and a deeper knowledge of how to better support and engage suppliers on their decarbonization journey, aligning with the company's ambitious climate goals. By addressing key challenges and implementing tailored motivational tactics, PepsiCo can better guide and support suppliers toward creating more effective decarbonization action plans. Looking ahead, the Performance System will assist procurement and sustainability teams at PepsiCo to tailor motivational tactics that strengthen supplier sustainability efforts, in effect fostering greater accountability and driving impact. The cost model also allows PepsiCo to compare the financial implications of emission reduction investments. These efforts can help PepsiCo advance its emissions goals while strengthening its leadership in sustainability.

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