Leading with Purpose: Changing the Way We Make Money to Change the World

• Published on July 11, 2018

Indra Nooyi

Former Chairman and CEO of PepsiCo

Twelve years ago, we embarked on a journey at PepsiCo that we call Performance with Purpose. Since then, much has changedat PepsiCo and around the worldbut the underlying principles behind Performance with Purpose remain the same.

We know we need to deliver the kind of top-tier financial results our investors, associates, and all our stakeholders expect. And we also know something else. We know we need to do it with a sense of purpose, a moral compass, guiding our way.

For me, and all of us at PepsiCo, Performance with Purpose isand always has beenabout the way we make money, not the way we spend it. About who we are, the character of our company.

We've tried to adhere to the idea of a social contract once defined by British statesman Edmund Burke as a partnership between the living, those who've come before, and those yet to be born.

And that means managing PepsiCo with an eye toward not only short-term priorities, but long-term priorities, not only the level of returns, but the duration of returns, as well, recognizing thatour successand the success of the communities we serve and the wider worldare inextricably bound together.

Much of our early work on Performance with Purpose required us to think differently about our business and the kinds of long-term investmentsfrom researching and developing new, more nutritious products, to finding ways to reduce water and energy use across plants and farmsthat could help us deliver on our vision of making our growth, our operations, and our impact more sustainable.

Sustainability has been defined as "meeting the needs of the present without compromising the ability of future generations to meet their own needs." Over the last dozen years, we've tried to meet the needs of the present whilestrengtheningthe ability of future generations to meet theirs, integrating that aspiration into our goals for what we originally called Human Sustainability, Environmental Sustainability, and Talent Sustainabilitytoday known as Products, Planet, and People:

When it comes to our Products, we've built on our legacy as the first company to voluntarily remove trans fat from our snacks by reducing added sugars, sodium and saturated fat in many of our products, launching a revolutionary nutrition-focused vending option, Hello Goodness, and growing our portfolio of Good for You and Better for You options from about 38 percent of revenue in 2006 to roughly 50 percent last year. We also teamed up with others in our industry to form the Healthy Weight Commitment Foundation, removing 6.4 trillion Calories from our food and beverage products, surpassing our collective pledge by more than 400%. And through Food for Good, we've provided 80 million nutritious servings to low-income U.S. families since 2009 to date.

When it comes to our Planet, we've raised the bar for what it means to be a responsible corporate water steward, earning the prestigious Stockholm Industry Water Award. In fact, we achieved a 25 percent water-use efficiency improvement between 2006 and 2015 in our legacy operations. And we've invested more than $40 million since 2006 to provide safe water access around the world, benefiting nearly 16 million people in some of the planet's most water-stressed regions.

We've also made our delivery fleet more energy efficient, eliminating the need for over 1 million gallons of diesel fuel since our electric vehicle initiative began in 2010the equivalent of keeping more than 2,000 passenger cars off the road for a yearwhile also making our beverage coolers and vending machines 60 percent more energy efficient. And we are one of the largest users of food-grade recycled PET in the U.S. In fact, if more recycled PET were available, we'd buy it. We've also launched the first 100 percent compostable chip bag in test markets, while diverting more and more of our waste from landfillapproximately 95 percent as of the end of 2017.

When it comes to our People, we've reimagined what it means to support our associates, from ushering in on-site and near-site childcare at campuses around the world, to expanding PepsiCo University's online course offerings to help associates upgrade their skills to navigate a rapidly changing world. And we've also helped lift up the communities we serve, playing a critical role in disaster relief efforts, from Texas to Florida and Puerto Rico, Mexico to Ecuador, China to the Philippines.

So, while we still have work to do in certain areas, we're incredibly proud of the progress we've made.Our aspiration of being a good companygood ethically and good commerciallyis now coming to fruition, yielding a broader, more lasting impact than we ever imagined, and setting a standard that companies across our industry and beyond aspire to meet.

Looking ahead, we'll continue viewing our work through both a microscope and a telescope, focusing on the most granular detailsgrams of saturated fat, parts per billion of greenhouse gas, the number of women in management rolesas well as the larger ambition of building a business that acts in accordance with our values, each of us striving to do what's right for the company and what's right for our communities. Because at the end of the day, there's no separating the two.

Leading this company remains a source of incredible pride. In my first sustainability report letter in 2007, I opened with a story:

"When I was a child in India, my mother would ask my sister and me a simple but compelling question: 'What would you do to change the world?' Today, I know my answer would be that I want to lead a company that is a force for good in the world. A company that delivers strong financial performance, while embracing purpose in everything it does."

That is still my answer. And I know that if we stay focused on our mission, if we engage the head, heart and hands of our more than 260,000 associates, and adhere to the idea that how we make money is as important as how we spend it, we'll continue doing more than advancing the heritage of a great and iconic company. We'll keep changing the world.

Indra Nooyi

Former Chairman and CEO of PepsiCo

Help answering the questions please

Consider Nooyi's ideas (untraditional more than a decade ago when she launched her initiative and still not mainstream!) about the purpose of the corporation. What effect might her views be influenced by being raised in a developing economy and her exposure to social inequality and extreme environmental pressures?