Remember ESG? Not too long ago, it seemed like every company had environmental, social and governance goals, goals that are largely non-financial but speak to a company’s philosophy and priorities.
Some of the most prominent companies to set ESG goals and actually make progress toward them include Microsoft, Ikea, Unilever, Patagonia, and Google.
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Microsoft, for example, set a goal of becoming carbon negative by 2023 and removing all “historical emissions” by 2025. So far, it has achieved 100% renewable energy in all of its Microsoft-owned data centers, buildings, and campuses. It also launched a $1 billion Climate Innovation Fund to support clean tech.
Ikea, likewise, set a goal of becoming “climate positive” by 2023. As of today, 60% of the company’s products are made using renewable or recycled materials. The company also produces more energy than it consumes.
For its part, Google parent Alphabet set a goal to achieve net-zero emissions across all operations by 2030. As part of that effort, Google has matched 100% of its electricity use with renewable energy purchases every year since 2017, according to the U.S. Chamber of Commerce.
Google has a dozen other ESG-related initiatives including diverting food waste and replenishing all the fresh water used in its data centers and offices.
This is to say that even major multinationals, which don’t often move at lightning speed, have been able to state goals and make meaningful strides toward achieving them relatively quickly.
Some companies may just not be as committed to ESG, however. That seems to be the case with PepsiCo.
Pepsi has stated it wants to reduce its greenhouse gas emissions.
Pepsi is retreating on some stated ESG goals
An unpredictable economic environment, both in the U.S. and globally, is making it difficult for companies to deliver on every promise. While many firms still emphasize their commitment to sustainability, there’s a growing trend toward adjusting goals to reflect on-the-ground realities.
The latest company to reveal it is rethinking its goals is PepsiCo.
The company has revised several of its key climate and sustainability goals, citing external challenges and a need for a more practical approach.
The company will discontinue its previous commitment to reduce total greenhouse gas emissions by over 40% by 2030. Instead, it will adopt a set of “evolved near-term targets,” narrowing its focus and adjusting baselines for emissions tracking, according to a statement.
The company lowered its emissions reduction goals across the board and extended its net-zero goal from 2040 to 2050.
Related: Coca-Cola, Pepsi rival discontinues 3 popular soda flavors
PepsiCo is also stepping back from some of its packaging-related goals. It has abandoned plans to scale reusable models and reduced targets for recycled or biobased material usage, instead focusing on supporting innovation in materials technology.
One area to which PepsiCo remains committed is regenerative agriculture. The company aims to use sustainable soil practices on 10 million acres by 2030. It says the changes reflect a continued commitment to sustainable practices, just with greater focus.
Companies see the realities of achieving ESG goals
PepsiCo’s decision to lower its climate goals is an example of a broader shift happening across the corporate landscape.
Companies are beginning to see the realities and limitations of infrastructure, regulation, and technology. For some companies, targets set years ago may no longer make sense in today’s operational or political climate.
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PepsiCo is not alone. Other major firms, including Coca-Cola, Mars, and Unilever, have also admitted they may not meet their stated sustainability goals.
Still, pivots don’t necessarily mean companies are abandoning sustainability. Instead, they may simply concentrate on areas where they believe they can have the most impact.
For PepsiCo, that means focusing on things like regenerative agriculture and water conservation.
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