When It Comes to Palm Oil, PepsiCo Is Less than Perfect

March 26, 2015 | 1:01 pm
Calen May-Tobin
Former contributor

Growing up, Back to the Future Part II epitomized what the future would look like. I dreamed of owning a hoverboard or riding in a flying car (it didn’t have to be a DeLorean, I wasn’t that picky). Well, that distant future of flying cars, dehydrated food, and self-drying clothes takes place in 2015, so the future is now.

However, on a recent viewing of the film what caught my attention wasn’t the hoverboards or holograms but a drink that Marty McFly orders at a diner. That drink: Pepsi Perfect. Through the work I’ve done investigating  companies’ links between deforestation and palm oil, I’ve learned a lot about PepsiCo’s policies and asked myself how close is the real PepsiCo to being “Pepsi Perfect”?

Pepsi Perfect?

Pepsi Perfect

In fictional 2015 Marty McFly enjoys a Pepsi Perfect. In the real 2015 is Pepsico anywhere near perfect? (Photo: Business Insider)

While we primarily think of PepsiCo as a beverage company, they are also a major snack food producer. Ever eaten Lays potato chips, a Quaker granola bar, or Doritos? All Pepsi products. So if PepsiCo is striving for perfection it has to be more than just a drink, it has to be a corporate philosophy.

The company’s made progress over the past year. Last year in UCS’s palm oil scorecard we gave PepsiCo a 34 out 100 for their palm oil commitment. Since then, the company has released a new Forestry policy and palm oil commitment. These are an improvement over what they had before, but as we and a number of other groups pointed out, the company can still go further.

However, commitments are just the first step. Pepsi Perfect might look great on a label, but it’s what’s inside the bottle that counts. When it comes to palm oil, what counts is how commitments translate into action. And that is where some major concerns about PepsiCo’s commitment crop up.

(Looking) Back to (inform) the Future

Looking back at how PepsiCo has implemented its previous commitments give us a good indication of how it will implement its new commitment. In 2011, PepsiCo committed to source 100% RSPO certified oil by 2015 and in 2013 it expanded that commitment to cover 100% physically sourced oil by 2020, Based on the company’s own reporting in 2012-2013 it sourced 20% of its oil from RSPO certified sources; in 2013-2014 that number rose to a whopping 21%. That leaves only one year for the company to figure out how to source the remaining 79% of its oil as RSPO certified. Things get even bleaker when you look at their physical sourcing of oil, which actually went down from 10% to 6% over that same period. And yet the company’s new commitment states that it will source 100% of its oil from deforestation- and peat-free sources (a higher standard than the RSPO) by 2016.

Understandably, NGOs are skeptical that PepsiCo will be able to only source responsible palm oil within the aggressive timeframe the company has laid out. It’s no coincidence that critiques of the company concentrate mainly on the transparency, traceability, and third-party verification aspects of their palm oil sourcing, as well as the lack of comprehensive safeguards to uphold human and workers’ rights and resolve social conflict. It’s these pieces of a commitment that give stakeholders an indication of how a company will be implementing its commitment on the ground. The companies with the strongest commitments, the best records of implementation, and the most cordial relationship with NGOS are those which fully embrace transparency and are open about their progress, even when they stumble.

No need to be a Biff

PepsiCo isn’t the only company to fall short of its sourcing commitment. Our scorecard was full of companies with strong commitments but weak current sourcing practices. What sets PepsiCo apart is the aggressive and defensive public stance it has been taking. This too is far from perfect. Over the past few years we have seen businesses and NGOs working together to figure out ways to stop deforestation. To me “Pepsi Perfect” would be a company that is transparent, cooperative, and investing the resources needed to truly implement solutions. That is a future we can all look forward to, even if it lacks flying cars.