Water

Water is critical to life, and essential to business. It is the primary ingredient in our company's beverages, and also necessary to produce most of our other products. As such, water quality and quantity are essential in our daily activities, and essential to the activities of our communities, consumers, and other partners. Our search for a clean and ample water supply brings us into the lives of many individuals around the globe. We recognize the impact of our business on each community in which we operate, and likewise the impact of our communities on our business. We are committed to supporting governments which preserve the Human Right to Water of individuals in the communities where our company operates, and advocating this right more broadly through our strategic approaches across the enterprise. The United Nations defines the Human Right to Water as all people's right to safe, sufficient, acceptable, physically accessible and affordable water for personal and domestic use. Therefore, PepsiCo agrees to the following steps to ensure that our business engagement across the globe, first and foremost, respects the Human Right to Water:

1. Safety: We will ensure that our operations preserve the quality of the water resources in the communities in which we do business;
2. Sufficiency: Our operating objective is to ensure that our use of water will not diminish the availability of community water resources to the individuals or the communities in the areas in which we operate;
3. Acceptability: We will involve communities in our plans to develop water resources, and will assure transparency of any risks or challenges to the local governments and community members in an on-going manner;
4. Physical Accessibility: We will assure that our operations will not adversely impact physical accessibility of community members to community water resources and will address community concerns in a cooperative manner;
5. Affordability: We will appropriately advocate to applicable government bodies that safe water supplies should be available in a fair and equitable manner to members of the community. Such water should be safe and of consistent and adequate supply and affordable within local practices.

We at PepsiCo respect the human rights recognized by the countries in which we operate, and will not take any action that would undermine a state's obligation to its citizens to protect and fulfill the Human Right to Water and, absent of a country's Human Right to Water Policy, we commit to operate within the principles of the Human Right to Water Policy as defined by the United Nations.

In 2007, we saved nearly 5 billion liters of water across our operations as compared to 2006. To make this possible, we've instituted a number of technological improvements in our global manufacturing operations that not only reduce our water use, but make more efficient use of the water.

In the last five years, our India team has reduced its manufacturing water use by more than 55 percent. In the last three years, we've saved more than 2.5 billion liters of water through water conservation efforts in manufacturing plants. We have similar projects underway in China, Thailand and Mexico.

In the UK, our total water use across all our operations was 1,564 million liters in 2007. Between 2001 and 2007, we reduced the water used to manufacture Walkers Crisps by 42 percent from 13l/kg of production to 7.6l/kg. The Walkers team developed engineering solutions to reduce equipment water use and created sources for recycled water.

Frito-Lay, the US snack division of PepsiCo, continued to improve its water efficiency by conserving approximately 300 million gallons (1 billion liters) of water in 2007 as compared to 2006; through its continued water conservation efforts known as the "Gallon per Pound Challenge," Frito-Lay won recognition from the Environmental Protection Agency as a Water Efficiency Leader in 2007. 

Even Pepsi-Cola bottlers in North America are doing their part. Pepsi Bottling Group has installed reverse osmosis recovery systems or incorporated high recovery designs into their new manufacturing lines that cumulatively save more than 280 million gallons of water annually as compared to traditional designs.

While using water responsibly throughout our business is a top priority, we also believe in our ability to address the broader problem of water scarcity. In India, for example, where agriculture accounts for over 80 percent of total fresh water consumption, PepsiCo is working with farmers to reduce water intensity in paddy cultivation by around 30 percent through direct seeding of paddy, a technique that avoids the traditional flood irrigation method currently practiced by paddy growers across the country. Paddy is India's largest grain crop, and consumes the bulk of fresh water used in Indian agriculture. In 2007, PepsiCo piloted this program on 100 acres, and this was scaled up to cover 1,000 acres in 2008. If only 6,000 acres of paddy cultivation were shifted to direct seeding this would offset all the water used in PepsiCo India's beverage plants.

PepsiCo Chairman and CEO, Indra Nooyi, showed her commitment to helping end the global water crisis by signing the United Nations CEO Water Mandate. The Mandate states a commitment to adhere to a holistic approach to water management in six areas:

• Direct Operations
• Supply Chain and Watershed Management
• Collective Action
• Public Policy
• Community Engagement
• Transparency

The PepsiCo Foundation's mission around the environment is to advance the knowledge and methods of water resource management that are sustainable and positively impact both quantity and quality of water supply. The Foundation has committed more than $16 million to organizations working to bring safe water to developing countries.

China Women's Development Foundation

The PepsiCo Foundation partnered with the China Women's Development Foundation (CWDF) to implement a research, development and intervention program designed to expand availability of safe drinking water for the people of Western and Central China. The grant is designed to build capacity using a watershed management solutions approach to expand CWDF's repertoire of rainwater harvesting techniques, and to ultimately help communities obtain water and teach them to improve the safety of this water through treatment.

The Earth Institute

In 2008, The Earth Institute at Columbia University, one of the world's premier institutions dedicated to global sustainable development, and the PepsiCo Foundation, entered into a $6 million three-year partnership. The program includes a series of high-impact, community-based activities and practical solutions across water, agriculture and climate. 

WaterPartners

The PepsiCo Foundation made a $4.1 million grant to WaterPartners to provide safe drinking water and sanitation to communities of the greatest need in India. This grant was the biggest single contribution to WaterPartner's WaterCredit Initiative, an innovative program that uses microfinance to increase access to safe water and improve sanitation for local communities in India.

Safe Water Network

Through a three-year partnership with Safe Water Network, the PepsiCo Foundation has pledged $3.5 million to implement safe water initiatives for village water systems in Ghana, India, and Bangladesh as well as rainwater harvesting systems in India. 

"The availability of fresh water is increasingly recognized as one of our planet's greatest challenges.  Around the world, societies are facing increased water stress, caused by climate change, population increases, the melting of glaciers, and depletion of groundwater. PepsiCo is taking this challenge very seriously and is providing global leadership in the search for solutions.  The Earth Institute and the PepsiCo Foundation are working together to address water challenges in India, China, Mali and Brazil. By harnessing good business practices with cutting-edge science in climate prediction, remote sensing, hydrology, and agronomy, our project together will help to develop new business models for sustainable water use. "

Jeffrey Sachs

Director, Earth Institute at Columbia University