Saving our planet is the leading ‘elephant in the room’ the world’s top execs are discussing, PepsiCo chief says

The looming threat of global warming was “the elephant in the room” at this year’s World Economic Forum (WEF), Robert Azevedo, executive vice president and chief corporate affairs officer of PepsiCo, said in an interview at Davos with Fortune Connect executive editor, Peter Vanaham. The theme of WEF this year was “cooperation in a fractured world.”

Azevodo said the issue was of particular importance and interest to him. “Everywhere you go, everybody you talk to, climate change is part of the agenda,” he said. “For us, it’s critical. We’re a food company, so higher temperatures around the world means lower yields for the crops. Every one degree centigrade the Earth warms up, 10% of staple crops go out. It’s an urgent and important topic for survival of the business now.” 

The rapidly changing climate has long been on the minds of PepsiCo execs. “We are at a crossroads,” Indra Nooyi, former chairman and CEO of PepsiCo, wrote for Fortune in 2020. “The time for platitudes and promises is over. We must create a better planet for future generations, and business must be at the vanguard.” 

Alongside its competitor, Coca-Cola, PepsiCo has been ranked as the world’s leading plastic polluter for four consecutive years. In September 2021, PepsiCo pledged to halve its use of virgin plastic across its portfolio by 2030. And, through a new initiative called PepsiCo Positive, it will incorporate half-recycled content in all its plastic packaging and scale new business models that require little or no single-use packaging. ThePepsiCo Foundation, of which Azevedo serves as chairman of the board, has thrown its weight behind reducing greenhouse gas emissions. 

“Addressing packaging waste is a global issue of paramount importance, and it will require systemic change,” Azevedo tells Fortune. Because there is no single way to achieve those ambitions, he added, the company is leaning on “a number” of strategies aimed at eliminating single-use plastics.

“Ultimately, our vision is to help create a world where packaging never becomes waste,” Azevedo said. “It’s the right thing to do for the planet, and the smart thing to do for our business.”

Climate takes the cake

Climate change was a hot topic at Davos this year. That might be because, a week prior to the conference, the National Oceanic and Atmospheric Administration released a report confirming that extreme weather caused over $165 billion in damage in 2022—a figure that likely stands to increase if nothing is done.

Companies are facing increasing pressure to make operations more environmentally friendly and socially conscious, while dealing with critics who say ESG policies don’t prioritize business interests. 

The question of whether a recession will lead companies to walk back their ESG goals, or put them on hold, “has been the discussion all week,” George Oliver, CEO of Fortune 500 manufacturing company Johnson Controls, told Fortune CEO Alan Murray. “[Will an economic slowdown] change the commitment that CEOs have made to decarbonization? It hasn’t yet. I don’t even think it has changed the pace…I think there’s a recognition that time is critical, and there is a lot to get done.”

John Holland-Kaye, CEO of London’s Heathrow Airport, proposed that high-net worth people and companies with high net worths should pay more for plane tickets to cover everyone’s costs of sustainable jet fuel. 

“We need to be paying the premium for sustainable aviation fuels so that we can get the cost of it down so that the mass market and developing countries don’t have to pay for the energy transition,” Holland-Kaye said. “The wealthy people in this room and wealthy nations should be funding the energy transition in aviation to help support developing countries.

Beyond the ever-present climate risk, numerous urgent issues were on Azevedo’s mind at Davos, he told Vanham: fiscal monetary policies, inflation, unemployment, supply chain upsets, and political tensions in the U.S., China, and Russia, especially as they’re related to oil and commodity prices. 

But climate change remains first and foremost, both for Azevedo, PepsiCo, and the majority of WEF attendees; this year, they arrived to an unseasonably temperate Davos. As Murray reported in his CEO Daily newsletter, “There wasn’t a CEO to be found in Davos who wasn’t fully embracing the business effort to try and reach net zero [emissions] by 2050.”

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