Mexico , Colombia , Brazil and Guatemala

PepsiCo partners with The Nature Conservacy to replenish watersheds

Bnamericas Published: Monday, November 21, 2016
PepsiCo partners with The Nature Conservacy to replenish watersheds

PepsiCo and The Nature Conservancy recently embarked on a new partnership called "Water for the Planet", an initiative that is aimed at replenishing five different watersheds located in Mexico City, Monterrey, São Paulo, Guatemala City and Bogotá over the next seven years.

The mission of the US$3mn strategy involves engaging with local communities and also includes collaboration with some of the company's business partners and suppliers. 

BNamericas spoke to Laxman Narasimhan, CEO of PepsiCo Latin America, to find out more about the initiative and how it fits into the ambitious 2025 sustainability agenda launched by the company in October, one of the specific goals of which is to contribute to the environment by improving the efficiency of its water use. 

BNamericas: One of the main strategies in the 'protecting our planet' pillar of Pepsico's recently launched sustainability agenda is to work to achieve positive water impacts. What does this mean for the company?

Narasimhan: The agenda is a continuation of delivering "Performance with Purpose," a vision that has governed all of the company's activities since 2006 and which we have renewed for another 10 years by launching the agenda.  What that vision means is that, to put it very simply, we're integrating sustainability into our business while still delivering our performance goals to our shareholders. The agenda focuses on three core priorities, one of which is the planet pillar. Protecting the planet is a foundational pillar for the company and, within that, water is a very important element.

There are three aspects to talk about when it comes to achieving a positive water impact. The first is seeking to improve the efficiency of water use in our operations, not only in our plants but in the places where the raw materials used in our products comes from.  The second is to ensure that we partner with communities and organizations like The Nature Conservancy to replenish the water we use. And the third is our commitment to the idea that it is not about taking water in one country and replenishing it in another, but about ensuring that the water we use near a certain community is replenished locally.  

BNAmericas: Why did PepsiCo decide to partner with The Nature Conservancy?

Narasimhan: It was important for us to find a partner that could help us provide a solution that's scalable in the cities in which we operate. We've worked with TNC before, so we know that the solutions they offer are innovative and work on the ground. Given their experience, we find them to be a great partner for Latin America: they have the expertise and the local delivery capabilities, and most of all, they're anchored on the idea that success is only possible if local communities get engaged in the solution. 

Furthermore, TNC developed the Urban Water Blueprint report, which looks at 25 cities in the region and seeks to understand how to make them less water-stressed.  

BNamericas: What does Water for the Planet entail and why were these four countries and these five specific projects chosen?

Narasimhan: We decided to invest US$3mn over the course of seven years in five different water replenishing projects. Many of the large cities in Latin America, some of which are places where we have manufacturing plants, are water-stressed. The five urban areas we chose for the initiative are places where we have manufacturing operations and which also happened to be included in TNC's report. The watersheds in which the project will be implemented are considered to be high-risk.

The initiative will focus on protecting the natural ecosystem so that water is preserved, restoring the ecosystem through reforestation and other actions, such as ensuring that our business' agricultural practices conserve water and use it the right way. In short, what we're trying to do is to protect, restore and conserve water and the local ecosystem in those five areas.

BNamericas: What are the desired outcomes of this collaboration? 

Narasimhan: We're focusing on implementing natural solutions in the five areas chosen for the project: Monterrey, Mexico City, Guatemala City, Bogotá and São Paulo. We're expecting that what this will do is replenish aquifer lands in these water-stressed locations. We also want to establish a mode of operation that is collaborative between The Nature Conservancy, PepsiCo and our other partners for the region. We want them to strengthen their support and to invest in other conservation initiatives for watersheds. We hope to create not only a positive water impact, but a positive impact on the local communities and that this initiative has a multiplying and long-lasting effect. 

BNamericas: What are some of the most valuable lessons the company has learned from other water conservation partnerships?

Narasimhan: The first lesson is that this is about the communities in which we operate in and we should never forget that. The second lesson is that, even though we could implement the initiatives ourselves, having an experienced partner like the Nature Conservancy is critical for the project's success. And the third is that, in order for an initiative to be successful, it's important to engage locally and in a meaningful way with a variety of stakeholders (government officials, key influencers, and the community).

BnAmericas: How does PepsiCo find a balance between maintaining business growth in Latin America and having a sustainable environmental performance?

Narasimhan: What I and my team feel, and what our company feels, is that this is not about choosing between one or the other. By having a sustainable environmental performance you achieve business growth. One reinforces the other. 

We believe very strongly that this is what we need for the long-term sustainability of our business. And that's the basis of our 'Performance with Purpose' vision.
Looking at the numbers, we met or exceeded all of our water goals set for 2015, including maximizing water efficiency per unit of production by 25.8% since 2006, while saving approximately US$80mn in costs over five years.

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