US drinks giant teams up with Schneider Electric on new ‘first of its kind’ supply chain renewable electricity programme

PepsiCo is targeting a major expansion in the use of renewable electricity across its global value chain, after yesterday announcing a major new partnership with Schneider Electric that aims to help the US drinks giant’s suppliers directly secure green energy through aggregate power purchase agreements (PPAs).

Dubbed ‘pep+ REnew’, the initiative marks one of the first Scope 3 collaborations of its kind in the food and beverage industry, according to PepsiCo.

The company said accelerating the adoption of renewable power among suppliers would help to create a more resilient and carbon-efficient supply chain, while also helping its partners secure long term price certainty for their power at a time when global energy markets are hugely volatile.

The initiative sets out two overarching goals: to educate PepsiCo’s value chain partners about their renewable electricity choices; and accelerate the transition to green power through aggregate PPAs and other procurement options.

PepsiCo said the programme was designed to help overcome challenges many small and medium businesses face when trying to participate in the renewable electricity market, with some organisations either too small or lacking the requisite expertise to take advantage of a PPA market that can prove complex for new entrants.

The company said it would shortly be inviting a “broad array” of its suppliers to participate in the programme, with a view to finalising a first cohort of buyers for an aggregate PPA by the end of this year.

“Net zero cannot happen without our value chain partners taking bold climate action,” said PepsiCo CEO Jim Andrew. “Through pep+ REnew, we will encourage our partners to reduce their Scope 2 emissions through renewable electricity procurement, helping us meet our own Scope 3 goals.”

The move is designed to support PepsiCo’s target announced last year to become a net zero emissions company by 2040, backed by a goal to cut its absolute emissions by 40 per cent by 2030 across its entire value chain, against a 2015 baseline.

If PepsiCo achieves its 2030 target, it expects to have reduced its emissions by more than 26 million metric tonnes of CO2.

Schneider Electric has been tapped to provide expertise on the PPA market, having advised a raft of companies, including PepsiCo, on over 150 utility scale PPA deals around the world, comprising more than 11GW of wind and solar power.

Steve Wilhite, president for sustainability business at Schneider Electric, said widening access to renewable electricity for SMEs was “a much-needed step as we work towards a net zero economy and a more sustainable future for all”.

“By creating greater access to large-scale renewable electricity, our partnership with PepsiCo aspires to add more renewable electricity capacity to power grids around the world,” he said.

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