Healthy Planet,Healthy People,

Healthy Business

Dan BenaSenior Director, Sustainable Development

PepsiCo, Inc.

The Objective

The Context

• Inspired during a train ride• Completed during a train ride• Published in late 2011• Musings of a 28-year career

(and still raring to go)

But more importantly…

…the inspiration was passion

But, how did I find it?

July, 1984—and my conscience

In a Pharmacology PhD program doing research with rats

…and was asked to “sacrifice” a living rat for research—which gave me pause to examine my conscience

“…encouraging a sense of ethical, social, and public responsibility.”

Religion Philosophy

Complexity of Conscience

“When I do good, I feel good; when I do bad, I feel bad. That's my religion.”

—Abraham Lincoln

Mom’s advice: K.I.S.S. (keep it simple, silly)

“Good people [or companies] do not need laws to tell them to act responsibly, while bad people will find a way around the laws.”

—Plato

“…one of the most important ways to rebuild the system

stronger than before is to rebuild trust stronger than before—

and you do not have to wait for a new law to do that.”

President Barack Obama, speech to financial community, Federal Hall,

New York. September 2009

..but how does a conscience apply to governments and companies?

Trust is the foundation

Edelman Trust Barometer at a glance

Eleventh annual study

5,075 people in 23 countries on five continents

Ages 25 to 64

College-educated

In top 25% of household income per age group in each country

Report significant media consumption and engagement in business news and public policy

Trust features prominently in reputation; much more so than financial returns

Global drivers of reputation

This is an unprecedented opportunity for ethical

companies to demonstrate their corporate conscience…

…and the “Triple Bottom Line” of sustainability is the perfect channel through which to demonstrate it!

Environment Society

Economy

Environment

Society

The business case seems intuitive to some…

“Business cannot succeed in a society that fails.”--Bjorn Stigson, Past President,

World Business Council for Sustainable Development

“There are many positive ways for business to make a difference in the lives of the poor—not through philanthropy, though that is also very important, but through initiatives that, over time, will help to build new markets.”

--Kofi Annan, Former Secretary Generalto the United Nations

…and is becoming logical to many

Protect the Business

Run theBusiness

Grow the Business

•By reducing risk •By strengthening the license to operate •By increasing brand value/reputation•By improving supply chain relationships and reliability

•By reducing costs•By enhancing productivity •By raising the quality of people •By nurturing knowledge

•By improving access to/cost of capital•By promoting revenue growth •By improving market access •By stimulating innovation

PepsiCo “gets it”

Within Global Operations, we are working to systematize the “Five S” framework of the business case for sustainable development

4

3

1

5

Synchronize the needs of business & society

2Secure our supply chain & make more resilient

Sustain the right to operate from our stakeholders

Satisfy consumer demand

Synthesize new productivity opportunities

…and also about leveraging opportunities to form the foundation for a flourishing business for years to come

Contributed more than  $40 million to people in need

Bringing safe water to 3MM people

“Business cannot succeed in a society that fails.”Bjorn Stigson, former President WBCSD

Provided 57,000+ hours of education to farmers

Improving farmer yield and fighting malnutrition

1S

ynch

ron

ize

the

nee

ds

of

bu

sin

ess

& s

oci

ety

Our supply chain depends on a healthy environment & healthy people; agriculture represents major opportunities for

resilience & risk reduction2

Sec

ure

ou

r su

pp

ly c

hai

n &

mak

e m

ore

res

ilie

nt

Stakeholders are raising the bar in termsof what they expect from companies; we must continually

earn the right to operate & grow

• Environmental risks increasingly included in companies’ 10K filings

Material Risk Customer Risk

2009: Released first Corporate Sustainability Report

2009: Launched Sustainability Index and Sustainability Consortium

• FLNA: 1% point loss at WMT equals significant $$

Regulatory/NGO Risk

• Increasing costs to comply with regulation

• PepsiCo’s reputation tarnished in court of public opinion

Environmental risks are

increasingly seen as material to

businesses

3Su

stai

n t

he

rig

ht

to o

per

ate

fro

m o

ur

stak

eho

lder

s

Consumer opinions are becoming more vocal, clear, and consistent

Consumers feel better about ourBrands when we protect

the environment

Environment drives PEP favorability

Our environmental

performance gives us credibility

to talk about other areas, like

nutrition

9,000 PepsiCo consumers across nine countries

4S

atis

fy c

on

sum

er d

eman

d

Environmental sustainability unleashessignificant productivity opportunities across PEP

Bio Mass / Gas High MPG Fleet Beverage PackagingRecyclable Seasoning Bags

Membrane Bioreactors

Heat Recovery Power Partnerships Green Coolers5S

ynth

esiz

e n

ew p

rod

uct

ivit

y o

pp

ort

un

itie

s

We are doing great things, and are being recognized

Sustainable Businessility is good

v

Harvard, November 2011

Performance of companies withHigh and Low cultures of Sustainability

Closing thoughts: I promised you career “musings”1. Make people part of the process

—from the beginning2. Sometimes, it’s okay not to be

“buttoned up”3. Better to be the driver holding the

reigns than the stallion pulling the coach

4. Learn how to articulate your passion

5. Go with your “gut feeling”