BUS7B26 Emphasising the Environment
Introduction
In the modern era, most of the organization has faced multiple issues in designing a production which reduces the environmental impacts while if the organizations will not be able to implement sustainable production strategies the environmental issues may be incensed more. The report is extremely essential to elaborate the harmful impact of environmental issues in the world and the way to design a sustainable production strategy which may help a company in reducing the environmental issues of the organization.
Overview of the organization, sustainability strategies and challenges
Overview of the organisation
PepsiCo is one of the most famous bottle beverage making brands of the world as it has been observed that the sales of the company is increasing day by day. PepsiCo is expanding day by day and currently the company is operating in more than 200 countries and services millions of people by providing quality beverages (Pepsico.com. 2022). The annual report of the company states that in 2020, the net revenue of the company reached more than $70 billion even though the company was mainly founded in North America in 1898 (Pepsico.com. 2022). In addition to that, the company has 23 brands such as Pepsi cola, Gatorade, Frito-Lay, Tropicana and many more which indicates that the main motive of the brand is to target more customers by launching more brands in the market. It needs to be stated the company is currently facing multiple production issues which affect the world environment and without a stable production the company may not be able to mitigate these environmental issues. Additionally, the company is mainly responsible for carbon emission in the environment as after the foundation of the company the carbon emissions rate of PepsiCo is increasing significantly.
Challenges
Moreover, the use of virgin plastic is also rising in the company even though if the company will not focus on using recyclable plastic then the environmental pollution will be increased more. Carbon emission is extremely harmful to the environment as it is mainly responsible for increasing the average temperature in climate which may influence global warming. Moreover, if the management of PepsiCo will be able to design a sustainable strategy then the carbon emissions of the company will be reduced in an effective way. Many countries of the world have taken the policy of using renewable energy which is some of the most innovative ways in mitigating carbon emissions (Adams and Acheampong, 2019). Along with that, if the company will not be able to design sustainable production then it may ruin the sustainable approach and the brand image of the company.
Sustainability strategies
Moreover, the reduction, recycle and reinvent policy of PepsiCo may help the company in reducing the use of virgin plastic and carbon emission. In addition to that, if PepsiCo will be able to use more renewable energy instead of using fossil fuel and design a sustainable manufacturing system then the carbon emission of the company may be reduced (Refers to Appendix-1). However, the improper implementation of this policies may harm the sustainable approach of the company.
Figure 1: Sustainable strategies by PepsiCo
(Source: Pepsico.com. 2022)
Sustainable strategy plan
The management of PepsiCo needs to design an effective and proper sustainable strategy plan for improvement in these environmental issues and that may be useful in improving the brand image in the international market. On a special note, the management of the company has also implemented a climate action approach to reduce the carbon emission of the company which is influenced by an innovative approach to mitigate the environmental issues. According to the website of the company, the Greenhouse emissions of the company directly affect the local environment and for that reason, the company wants to implement a net zero emissions policy by 2040. More specifically, the company also decided to reduce the greenhouse emission by 75% from the direct operations of the company and a 40% reduction from the indirect value chain of the company (Zhongming et al., 2021). Additionally, if the company will be able to implement this policy in a significant manner then PepsiCo will be able to reduce more than 26 million tons of greenhouse gas from the production system (Zhongming et al., 2021). Single use plastic or virgin plastic are extremely harmful for the environment as the company did not take any kind of recycling policy for this virgin plastic which mostly affects the environment.
The Sustainable Development approach by the United Nations will be helpful for the company to develop a sustainable strategic plan in order to reduce environmental pollution from the production system. Moreover, if the company will follow UN goals 12, 13 and 17 the sustainable approach of the company will be more effective and create a more positive impact in reducing GHG emissions and plastic reduction. The UN goal 12 ensure sustainable production patterns in the company while goal 13 will be based on taking urgent action to deal with the negative implication of climate changes (Sustainabledevelopment.un.org. 2022). On a contradictory note, the company also has a sustainable policy in order to reduce the use of virgin plastic in packaging. It needs to be argued that the brand is designing a 100% recyclable packaging procedure which will be implemented by 2025 (Refers to Appendix 2). The annual report, of the company states that in 2019 the company has used 88% recycled plastic in packaging which denotes this approach of the company in the right direction. Moreover, the use of greenhouse gas in refrigeration is also influencing global warming and for that reason, the company decided to implement a natural refrigeration process which is an eco-friendly approach.
One of the main motives of the organization is to support and include suppliers in making this sustainable approach which may help the company in reducing carbon emissions from the warehouse of the company. PepsiCo is also incorporating the Human Resource Management (HRM) of the company to maintain the sustainable activities of the organization even though the success of the sustainable strategies totally depends on the implementation of these strategies (Sehrawat, 2019). The management of the company has understood that if the company will not be able to implement sustainable strategies then it may result in the disruption of the business. One of the main benefits of this approach is that it may help the company in maintaining the continuity of the business. The company also plays a crucial role in identifying the factors which affect the environment and affect identifying the make this strategy which may be useful in reducing the production risk of the company. In addition to that, the company has joined in the one trillion trees initiative to make the green world more beautiful and that is also useful in reducing carbon emission from the environment (Pepsico.com. 2022).
Figure 2: Emissions footprint report by PepsiCo
(Source: Pepsico.com. 2022)
One of the main visions the company is to improve the plastic value chain by taking essential innovations and the may be useful in showing the direction for the direction of packaging, It is the duty of the company is educate the customers about the recycling of plastic which may play a central role in reducing the number of plastics from the environment. It needs to be mentioned that the company has taken the Reduce, Recycle and Reinvent strategies which are extremely innovative in improving the plastic supply chain. On a special note, the reduce policy is designed to mitigate the amount of plastic from production, recycle belongs to the circulation of the plastic value chain and reinvent means introducing new materials which replace plastic bottles. It has been observed that plastic wastages of the company are also increasing as the company has not developed a proper waste management system to deal with plastic wastages. After analysing the condition the company has designed a plastic waste management system that may help the company in achieving the sustainable targets. Moreover, in 2006, the company launched a performance with purpose strategy which helps the company in designing a strong sustainability governance to resolve the environmental issues of the company (Busco et al., 2017).
Implementation and benefits
It may be asserted that there are many benefits of implementing these sustainable strategies, however, improper implementation of the strategies may affect the growth and success of the company. In addition to that, if the company will be able to mitigate the carbon emission then it sends a good message to the sensible customer which automatically improves the brand image among the customer base of the company. Analysing the website of the company it has found that currently 87% packaging of the company follows a recycle approach which is environment friendly and reduces the plastic pollution from the environment. A trusted journal states that every year near about 359 million plastic bottles are produced and in this case the use of PET (Polyethylene Terephthalate) is increasing in order to depolymerize plastic bottles (Tournier et al., 2020). The management of the company also decided to use PET in making plastic bottles which may be impactful in depolymerizing the beverage bottles as the company also aware that people to recycle the virgin plastic to protect the environment. Along with that, if the company will be able to implement these sustainable strategy in an effective way then the company may be able to avoid 78 million virgin plastic bottles by 2025.
The company also declares that PepsiCo will use renewable energy instead of traditional sources of energy which will help the company in reducing the GHG emission from the environment and that may help the company in achieving the sustainable goals with high profitability. One of the main advantages of following the sustainable goals is that it will help the company in reducing the waste from the environment which will influence other small and big companies to follow this approach for better environmental outcomes. The Improvement of production is the main approach of the company even though if the company will not follow a sustainable plan then the productivity of the company may be decreased in future. The recycling of plastic is extremely cost effective as in this process the company will not need to buy extra plastic bottles for products which may reduce the production costs of the company. One of the prime advantages of the recycling process is that it will help the company to generate less plastic waste which will fulfil the sustainable approach of the company. Nowadays, investors are becoming extremely sensible while if the company will not follow the sustainable approach then the intentional investors company may not show interest to invest in the company.
Bubbly drops is one of the famous beverages of the company as the company has decided that from January 2020, the plastic bottles will not be used for Bubbly drops which is an innovative approach to reduce plastics. In addition to that, the company is also planning to design paper bottles which may be a little costly in comparison to plastic bottles, however, it is a more effective approach to protect the environment from the deadliest impact of virgin plastics. There is a huge requirement of proper partnership which may help the company in fulfilling the sustainable approach and that may improve the brand image of the company. The brand image plays an essential role in modern business as if the product of an organization has a good brand image the customer may believe that the product of this brand is extremely supreme in quality (Bernarto et al., 2020). The sustainability approach and plan of the company is in the right direction and for that reason, the company has been awarded the Bonsucro Inspire Award and CDP Climate A list award.
Conclusion
From the above discussions, it may be concluded that this report will be extremely helpful in identifying the significance and importance of the sustainable approach of a renowned beverage company. Additionally, the carbon emissions and excessive use of single plastic is mainly responsible for creating environmental pollution and PepsiCo needs to focus on mitigating these issues with a sustainable approach.
References
Adams, S. and Acheampong, A.O., 2019. Reducing carbon emissions: the role of renewable energy and democracy. Journal of Cleaner Production, 240, p.118245.
Bernarto, I., Berlianto, M.P., Palupi, Y.F.C., Meilani, M., Masman, R.R. and Suryawan, I.N., 2020. The influence of brand awareness, brand image, and brand trust on brand loyalty. Jurnal Manajemen.Busco, C., Fiori, G., Frigo, M.L. and Angelo, R., 2017. Sustainable Development Goals: Integrating sustainability initiatives with long term value creation.
Pepsico.com. 2022. [online] Available at: <https://www.pepsico.com/about/about-the-company> [Accessed 14 January 2022].
Sehrawat, S., 2019. Pepsico’s Sustainable Strategies. Journal of Management, 6(2).
Sustainabledevelopment.un.org. 2022. Goal 13 – United Nations Partnerships for SDGs platform. [online] Available at: <https://sustainabledevelopment.un.org/partnerships/goal13/> [Accessed 14 January 2022].
Tournier, V., Topham, C.M., Gilles, A., David, B., Folgoas, C., Moya-Leclair, E., Kamionka, E., Desrousseaux, M.L., Texier, H., Gavalda, S. and Cot, M., 2020. An engineered PET depolymerase to break down and recycle plastic bottles. Nature, 580(7802), pp.216-219.
Zhongming, Z., Linong, L., Wangqiang, Z. and Wei, L., 2021. PepsiCo doubles down on climate goal and pledges net-zero emissions by 2040.
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