Climate change is ‘elephant in the room’ for leaders, says PepsiCo exec

Lots of the world’s strongest leaders are simply as fearful about local weather change as you’re. 

The looming menace of worldwide warming was “the elephant within the room” at this 12 months’s World Financial Discussion board (WEF), Robert Azevedo, government vp and chief company affairs officer of PepsiCo, stated in an interview at Davos with Fortune Join government editor, Peter Vanaham. The theme of WEF this 12 months was “cooperation in a fractured world.”

Azevodo stated the problem was of specific significance and curiosity to him. “In every single place you go, everyone you speak to, local weather change is a part of the agenda,” he stated. “For us, it’s vital. We’re a meals firm, so greater temperatures around the globe means decrease yields for the crops. Each one diploma centigrade the Earth warms up, 10% of staple crops exit. It’s an pressing and necessary matter for survival of the enterprise now.” 

The quickly altering local weather has lengthy been on the minds of PepsiCo execs. “We’re at a crossroads,” Indra Nooyi, former chairman and CEO of PepsiCo, wrote for Fortune in 2020. “The time for platitudes and guarantees is over. We should create a greater planet for future generations, and enterprise should be on the vanguard.” 

Alongside its competitor, Coca-Cola, PepsiCo has been ranked because the world’s main plastic polluter for 4 consecutive years. In September 2021, PepsiCo pledged to halve its use of virgin plastic throughout its portfolio by 2030. And, by means of a brand new initiative known as PepsiCo Optimistic, it would incorporate half-recycled content material in all its plastic packaging and scale new enterprise fashions that require little or no single-use packaging. ThePepsiCo Basis, of which Azevedo serves as chairman of the board, has thrown its weight behind decreasing greenhouse gasoline emissions. 

“Addressing packaging waste is a worldwide challenge of paramount significance, and it’ll require systemic change,” Azevedo tells Fortune. As a result of there is no such thing as a single technique to obtain these ambitions, he added, the corporate is leaning on “a quantity” of methods aimed toward eliminating single-use plastics.

“In the end, our imaginative and prescient is to assist create a world the place packaging by no means turns into waste,” Azevedo stated. “It’s the suitable factor to do for the planet, and the good factor to do for our enterprise.”

Local weather takes the cake

Local weather change was a sizzling matter at Davos this 12 months. That is likely to be as a result of, every week previous to the convention, the Nationwide Oceanic and Atmospheric Administration launched a report confirming that excessive climate brought about over $165 billion in injury in 2022—a determine that probably stands to extend if nothing is finished.

Corporations are going through growing strain to make operations extra environmentally pleasant and socially acutely aware, whereas coping with critics who say ESG insurance policies don’t prioritize enterprise pursuits. 

The query of whether or not a recession will lead corporations to stroll again their ESG targets, or put them on maintain, “has been the dialogue all week,” George Oliver, CEO of Fortune 500 manufacturing firm Johnson Controls, instructed Fortune CEO Alan Murray. “[Will an economic slowdown] change the dedication that CEOs have made to decarbonization? It hasn’t but. I don’t even suppose it has modified the tempo…I believe there’s a recognition that point is vital, and there’s a lot to get finished.”

John Holland-Kaye, CEO of London’s Heathrow Airport, proposed that high-net price folks and firms with excessive internet worths ought to pay extra for airplane tickets to cowl everybody’s prices of sustainable jet gas. 

“We should be paying the premium for sustainable aviation fuels in order that we are able to get the price of it down in order that the mass market and creating international locations don’t need to pay for the power transition,” Holland-Kaye stated. “The rich folks on this room and rich nations needs to be funding the power transition in aviation to assist help creating international locations.

Past the ever-present local weather threat, quite a few pressing points had been on Azevedo’s thoughts at Davos, he instructed Vanham: fiscal financial insurance policies, inflation, unemployment, provide chain upsets, and political tensions within the U.S., China, and Russia, particularly as they’re associated to grease and commodity costs. 

However local weather change stays firstly, each for Azevedo, PepsiCo, and nearly all of WEF attendees; this 12 months, they arrived to an unseasonably temperate Davos. As Murray reported in his CEO Each day publication, “There wasn’t a CEO to be present in Davos who wasn’t absolutely embracing the enterprise effort to try to attain internet zero [emissions] by 2050.”

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