PepsiCo Inc.’s agreement to halve its use of certain plastics is a victory for environmental, social and governance-oriented investors and may bolster support for state and federal legislation to curb single-use packaging, advocates say.
The maker of its namesake soda and Lay’s potato chips said it will slash use of virgin nonrenewable plastic by 50 percent per serving across its global food and beverage portfolio by decade’s end. The company and rival Mondelez International Inc. committed to reducing plastic use in March, but PepsiCo didn’t say by how much until last week.
Virgin nonrenewable typically means plastic made with chemicals produced from fossil fuels, often for single-use packaging. Environmentalists say the material rarely gets properly recycled. Instead, it breaks up into smaller and smaller pieces, eventually becoming microplastics that absorb other pollutants and enter the global food supply chain.
PepsiCo said it will accomplish its target by using 50 percent recycled content in its plastic packaging and expanding its SodaStream and other product lines with little or no single-use packaging. The company projects that expansion of SodaStream, which sells carbonization systems that allow consumers to make soda at home, will avoid the use of 200 billion plastic bottles by 2030 while helping consumers reduce their carbon footprint.
Altogether, the changes would represent a 20 percent reduction to total virgin nonrenewable plastic use across PepsiCo’s brands, or about 460,000 tons of plastic, according to As You Sow, the group that pressured the beverage and snack company to act.
The Coca-Cola Co. pledged in 2018 to collect and recycle a bottle or can for every one the company sells by 2030, when it also expects to be using recycled materials in half of its packaging.
Industry observers see the pledges as the latest dominoes to fall in getting more companies to use sustainable packaging and clean up operations after the onset of the coronavirus pandemic slowed momentum on the plastic-free movement.
“Different companies used the pandemic and the initial fear of reusables to put a hold on things,” said Julia Cohen, managing director of Plastic Pollution Coalition, an alliance of more than 1,200 organizations, businesses and individuals. “A lot of companies used this as an opportunity to get governments to put holds on bag bans or other policies being initiated at the state and local level.”
Corporate action is now picking up, partly as the result of pressure from shareholders. In May, Walmart Inc. agreed to similar measures to cut its use of virgin plastic, joining Keurig Dr Pepper, Mondelez and Target Corp. To date, British consumer goods company Unilever has the most aggressive target: to cut virgin plastic use in half, including a total elimination of 100,000 tons of plastic packaging by 2025.
Unlike other activist groups, As You Sow does not hold shares of PepsiCo or hold significant amounts of shares of other companies it engages with, communications and marketing specialist Stefanie Spear said in an email. The group networks with investors interested in ESG issues who “loan” As You Sow their shares so it can file shareholder proposals on its own or co-file with other investors.
Conrad MacKerron, senior vice president of As You Sow, said he sees Pepsi’s commitment as “a significant goal,” but the company’s timeline lags behind other major retailers and consumer brands.
“Given Pepsi’s huge plastic footprint and rapidly increasing pollution of land and oceans by plastic packaging, reductions need to be achieved as quickly as possible,” MacKerron said in a statement.
Overall, corporate action on plastics still leaves organizations wanting more.
“We’ve got less than 10 years to redirect the Titanic here,” Cohen said in an interview. World leaders at a U.N. General Assembly meeting in 2019 were told that they had only until 2030 to take actions necessary to stop irreversible damage to the environment.
Cohen said she anticipates more activist shareholder and consumer pressure on companies to implement more dramatic cuts to plastic use if they do not do it themselves.
“We’re grateful they’re making these commitments, but they’re in a position to make an even bigger impact if they actually implement them and if they implement them sooner than many of the time frames they’re committing to,” she said. “They get a lot of attention for announcing the commitments, and then it’s often left to the advocacy groups and watchdog groups to actually follow up to make sure they’re even doing any of it and what the results are.”
Conservation organizations, including nonprofit Oceana, are targeting Amazon to cut its plastic waste. Christy Leavitt, Oceana’s plastics campaign director, said it’s pressing the e-commerce giant to allow customers to choose plastic-free packaging. This follows the company’s May annual general meeting during which 35.5 percent of shareholders voted in support of a resolution from As You Sow to require a report on its use of single-use plastics.
While the measure failed, it underscores how shareholder advocacy groups and others are upping the ante for investors to support environmental, social and governance resolutions, she added.
“Until consumers are given a lot of plastic-free choices, companies will be asked to do more to reduce their plastic footprint, and I’m hopeful that with that sustained pressure from consumers, from shareholder resolutions and activist organizations, the companies will work to reduce their plastic pollution,” Leavitt said in an interview. “And if not, we’ll have some of these laws that will require them to reduce their production of single-use plastic.”
Legislation to foster reductions in plastic use at the state level has been picking up steam this year with renewed interest after a slowdown in 2020, Leavitt and Cohen said. Earlier this month, the California Legislature unanimously passed AB 962, a bill that paves the way for the state to reuse glass bottles by removing a recycling requirement that requires single-use glass bottles to be crushed for recycling in order to flow through the state’s beverage container redemption program. Washington, Virginia and Colorado have also passed related policies to reduce single-use plastic this year.
At the federal level, Sen. Jeff Merkley, D-Ore., and Rep. Alan Lowenthal, D-Calif., in March reintroduced their respective chamber’s versions of legislation that would phase out single-use plastic products and similar materials by 2023, among other requirements and incentives to reduce production of new plastics and hold producers of single-use products financially responsible for recycling and composting their products after consumer use. Neither version of the bill has made it to a committee vote.
“Other countries around the world have set national-level policies to address single-use plastics, and we don’t have much of that yet in the U.S., but we are seeing a lot of activity at the state and local level,” Leavitt said.
There is more going on now in terms of policy than ever before, Plastic Pollution Coalition’s Cohen said, and advocacy groups and their lobbyists are particularly paying attention to legislative efforts to push corporate America to do more to nix plastic and its environmental effects.