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PepsiCo Inc. will use 100% renewable electricity for its U.S. operations starting this year as part of its goal to slash 20% of its greenhouse-gas emissions by 2030.
A mix of on-site renewable electricity, virtual power-purchase agreements and renewable-energy certificates will enable the company to meet its goal, PepsiCo said Wednesday. As a result, it will eliminate an estimated half million metric tons of emissions a year.
PepsiCo’s PEP, +1.01% operations in nine European countries have already reached 100% renewable electricity. Competitor Coca-Cola Co. KO, +1.12% also sources 100% renewable electricity at some European sites.
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The food and beverage company made the move in the U.S., which accounts for nearly half of its global electricity consumption, to send a signal to the energy market and other U.S. companies, said Simon Lowden, chief sustainability officer at PepsiCo, in an interview.
“Climate change is one of the biggest challenges facing our food system,” he said. “When the U.S. moves and U.S. business moves, everyone stands up and takes notice.”
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Over the next 12 months, Lowden said PepsiCo’s brands, which include Lay’s, Gatorade and Doritos, will serve as “lighthouses for environmental and sustainable changes” and could label if they were made with renewable electricity.
“Some of the brands will be talking about it quite loudly,” he said. “That’s a work in process.”
PepsiCo’s move comes as prices for renewable electricity continue to fall. Globally, the average costs to generate electricity from solar photovoltaic and onshore wind both declined 13% year-on-year in 2018, according to the International Renewable Energy Agency.
Still, PepsiCo doesn’t have a “crystal ball” on how energy costs will change over time and some of the renewable-power agreements it will sign can last 14 years, said Roberta Barbieri, vice president for sustainability at PepsiCo, in an interview.
“Those projects take a while to come to fruition because you’re literally building wind farms,” she said.
Outside of renewable electricity, PepsiCo is improving the efficiency of its millions of vending machines worldwide and it expects this year to start receiving some of the 100 all-electric trucks it ordered from Tesla Inc. TSLA, -1.15% in 2017.
“We have programs in place across our entire carbon footprint,” Barbieri said.
Pepsi shares are up about 0.7% so far in 2020, up 27% over the past year. The Dow Jones Industrial Average DJIA, +0.60% is up 20% over the past year.
