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Environment Sustainability

To the planet we all shareIt’s a promise to be a good citizen of the world, protecting the Earth’s natural resources through innovation and more efficient use of land, energy, water and packaging in our operations.

Positive Water Balance ...................................................................................................................... 03

Empowering Farmers ........................................................................................................................ 07

Waste to Wealth ................................................................................................................................. 09

Reducing Environmental Impact ...................................................................................................... 11

Case Studies: Community Water Initiatives ..................................................................................... 13

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PepsiCo’s goals and commitments include

n Striving for positive water balance in our operations in water-distressed areas.

n Improving our electricity use efficiency by 20 percent per unit of production by 2015.

n Reducing our fuel use intensity by 25 percent per unit of production by 2015.

n Committing to an absolute reduction in GHG emissions across global operations.

n Applying proven sustainable agricultural practices on our farmed land.

n Providing funding, technical support and training to local farmers.

n Promoting environmental education and best practices among our associates and business partners.

n Integrating our policies and action on human health, agriculture and the environment to make sure that

they support each other.

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Positive Water Balance

Water InitiativesPepsiCo respects the right of all human beings to water and is committed to minimize the impact of its business

on the environment.

Positive water balanceIn 2009, the company achieved a significant milestone: Positive Water Balance. Through

various initiatives of recharging and replenishing water, it was able to give back to the

community more water than it consumed in its manufacturing processes. In 2010,

PepsiCo has further increased the amount of water saved and is now water positive by

4.3 billion liter, a fact verified by Deloitte Touche’ Tohmatsu India Pvt Ltd.

First Company in the Beverage World

to Achieve Positive Water Balance

Giving back more water than we consume

Savings through direct seeding interventions (7836)

Water re-charged through community programme

(2080)

In plant water recharging and harvesting (83)

Saving through drip irrigation (144)

Water Credit (in MML)

Water Debit (in MML)

Water usage in manufacturing facilities (bottling & snacks)

(5826)

Total (Water Credit) 10143

Total (Water Debit) 5826

For more details on how PepsiCo has achieved Positive Water Balance, please visit PepsiCo’s website: www.pepsicoindia.co.in.

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Increasing credit

Recharging Water Through Community InitiativesAs sustainability is an important outcome, community ownership is at the heart of PepsiCo’s CSR approach.

It works with the local Panchayat or municipality and engages with the community in planning as well as

executing the project.

n PepsiCo uses integrated water management techniques, inclusive approach and introduction of

sustainable agricultural practices such as drip-irrigation, education programs on water conservation and

better agronomic practices.

n The initiatives result in an enhanced ground water table, improved water access and improved farm

yields and incomes.

n PepsiCo has also initiated several projects to provide water to villagers who earlier had to walk long

distances to collect water.

n In 2010, water projects created the potential to recharge over 2 billion liters of water contributing towards

positive water balance and benefitting nearly 41,000 community members. Community participation has

played a key role in the success of this initiative.

In-Plant Water Recharge and HarvestingPepsiCo employs rainwater harvesting initiatives within its manufacturing locations, such as roof-water

harvesting and recharge ponds. At some plant locations, it harvests and collects rainwater in excavated ponds

while at other plants it uses roof-water harvesting to recharge water.

Water tank installed by PepsiCo at Neelamangala

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Water Conservation Through Irrigation EfficiencyPepsiCo has globally made a promise to its stakeholders of protecting natural resources, particularly water, by

driving world-class efficiencies in water usage in its operations, preserving water resources and enabling ac-

cess to safe water.

Direct seeding—PepsiCo India is leading a pioneering initiative to replace transplanting of paddy with direct

seeding technology, which has helped reduce water consumption in paddy cultivation by 30 percent and has

also cut down green house gas emissions by 75 percent. The results have been vetted by leading research

institutes like the Indian Agriculture Research Institute (IARI) and the International Rice Research Institute (IRRI).

In 2010, PepsiCo India brought 10,000 acre of land under direct seeding and saved 7 billion liter of water, in six

states, namely Punjab, Rajasthan, UP, Haryana, Tamil Nadu and Karnataka.

Drip irrigation—PepsiCo is helping farmers in water-scarce areas in Maharashtra, Gujarat, Karnataka and Hary-

ana and promoting drip irrigation in over 1100 acres. It is estimated that every acre saves approximately 700

kiloliter of water. In 2010, drip irrigation saved 144 mml of water. PepsiCo’s initiatives include:

n Helping raise money for the assets through banks

n Incentivizing the farmers for the adoption of drip irrigation through a buy-back mechanism

n Providing help to design agricultural equipment to make drip irrigation commercially viable for farmers.

Seeding machine used in the direct seeding method

Drip irrigation

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Reducing debit

Decreasing In-plant Consumption of WaterPepsiCo India plants have been able to reduce water use in the manufacturing process through:

n Innovative reuse and recycling initiatives in the manufacturing process

n Installation of water recovery equipment to reduce water consumption

n Reduction in plant water consumption

PepsiCo India has adopted processes to treat processed water before returning it to non-potable water uses.

For cooling towers, watering gardens and flushes, water is being reused and plants are moving towards

becoming a zero-discharge facility.

In order to reduce water stress, PepsiCo’s rain or roof water harvesting methods have become standard

practice at all its plants. Jainpur, Bazpur, Bharuch, Palakkad, Panipat, Neelamangala, Mamandur and Mahul

plants harvest and collect rain water in excavated lakes and ponds.

A 37% reduction in water use since 2006(ltr water used/ltr beverage produced)

Water recharge filter at the Channo plant

2006

3.52.9

2007

2.5

2008

2.4

20092.2

2010

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Farmers’ FriendOver the last 20 years, PepsiCo India has been

combining deep insights into Indian farming

with its global technological expertise to transform

the lives of farmers. When PepsiCo started its India

operations in 1989, it was with a commitment to

invest in the horticulture-based food processing

industry in Punjab. PepsiCo worked closely with

farmers and the yields of tomatoes increased more

than 300 percent while the processing season in the

plant went up from 28 to 60 days. The improved

yields helped increase farmer incomes despite

lower prices to the consumers.

PepsiCo India established a model of partnership with farmers and now works with over 22,000 happy

farmers across nine states to improve the yields in various crops, including potato and paddy. It works

closely with farmers through the crop lifecycle by providing new varieties, technologies and sustainable

farming practices. PepsiCo plans to increase its farmer connect to over 30,000 farmers by 2013. In PepsiCo,

farmers truly have a friend and development partner.

Empowering FarmersDevelopment partner to small and marginal farmers

Anil Gunnes with his family: A farmer who has benefited from associating with PepsiCo

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Collaborative farming – potatoPepsiCo’s 360-degree farmer connect program has transformed the lives of small and marginal farmers across

India

PepsiCo India was the first corporate to introduce collaborative farming of process-grade potatoes in India

in 2004-05 and in 2010 was working with over 12,000 farmers—a majority of them being small and marginal

farmers, spread across Gujarat, UP, Maharashtra, Karnataka, Bihar, West Bengal and Punjab. PepsiCo has helped

improve their incomes through a 360-degree farmer connect program that includes:

n Assured buy-back of produce at pre-agreed prices, which insulates farmers from open market price

fluctuations.

n Supply of high quality planting material, including its proprietary advanced seed varieties.

n Offering advanced plant protection program and technical know-how developed in collaboration with

leading agri-input companies like DuPont, Bayer and BASF.

n Soft loans through a national level tie-up with State Bank of India.

n Facilitation of crop/weather risk insurance in partnership with leading insurance companies to protect farm

incomes.

The association with PepsiCo India has not only raised the incomes of small and marginal farmers, but also

their social standing.

Bumper crop at a PepsiCo farmer’s field

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Waste to WealthEffective and environment-friendly disposal of waste

A winning partnershipPepsiCo’s Waste to Wealth initiative is a unique and innovative, employment and income-generating partner-

ship that provides clean and healthier environment and improved quality of life for 450,000 people across

Pammal, Sangareddy, Panipat, Chennai, Tenkasi, Nagapatinam and Cuddalore.

n The initiative is focused at creating replicable community models through a successful four-way partner-

ship between PepsiCo, the NGO Exnora, the municipality and the community to address a major health

concern—community waste.

n Organic waste is converted into compost using vermi-culture and inorganic waste is sorted into categories

for recycling. Recyclable waste, such as PET and plastics, waste paper and tetra packs, is recycled.

n The community awareness program includes door-to-door campaigns and street plays to motivate people

to segregate organic and inorganic garbage at source to enable recycling.

n Every aspect of the program is built around maximum community and government participation to help it

evolve into a self-sustaining model.

Successful four-way partnership between PepsiCo, the NGO Exnora, the municipality and the community

Waste collection and segregation at Chennai

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From waste to smilesn Helping 450,000 people across 7 cit-

ies live a more hygienic and healthier

life, with 85 percent of their household

garbage being recycled.

n The high quality organic manure

made from the biodegradable waste

is branded and sold, giving the initia-

tive ‘Waste to Wealth’ its true mean-

ing. The underprivileged waste col-

lectors earn their income from this

‘waste’. The project provides liveli-

hood to more than 500 poor commu-

nity members.

n The initiative recycled nearly 30,000 tons of solid waste in 2010 that would have otherwise been relocated

to landfills.

The waste is converted into high quality organic manure and sold

Benefiting 450,000 people across 7 cities by recycling 85 percent of the household waste

Waste segregation at Panipat

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Climate change affects everybody. PepsiCo under-

stands its impact and is taking steps to mitigate the

same. On the one hand it is adopting renewable en-

ergy sources to meet the energy requirements in

all its operations. And on the other hand, it is using

means to reduce its carbon footprint by decreasing

the very consumption of energy as well as employ-

ing ways to reduce green house gas emissions.

Lowering the carbon footprintn There has been an 80 percent reduction of solid

waste disposal. Organic compost is produced

from biodegradable waste and packaging waste

is recycled.

n Initiatives to reduce packaging have resulted in

decreased consumption of 2,154 tons of virgin

plastic and 2,000 tons of glass.

n The bio-methane plant in Pune has managed to

reduce green house gas emissions by 700 metric

tons per year.

n The rice husk boiler in Kolkata meets 75 percent

of the plant’s energy needs, has helped reduce

green house gas emission by 4500 metric tons

per year and has resulted in a potential saving of

$0.8 million per year.

Using renewable energy sourcesOf the total energy used in all PepsiCo plants, 30 per-

cent comes from renewable sources. The initiatives

in these plants include use of wind energy, conver-

sion from fossil fuel to bio-fuel and the use of solar

energy.

Reducing Environmental Impact

30 percent energy from renewable sources

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n Biomass boilers are being used in all company-owned bottling operations (COBO) plants. In the beverage

plants, 38 percent of all energy used is through renewable sources.

n A wind turbine has been commissioned in Tamil Nadu. Of the 11.3 million units of total consumption, 3.8

million units will come from the wind turbine. The turbine also has the potential to offset 70,000 tons of

carbon emissions over its entire 20-year life cycle.

n A new wind turbine already functional in Maharashtra generated 2.58 MM units in 2010 versus 8.6 MM

units used.

n Currently all PepsiCo plant warehouses use solar lighting and five PepsiCo plants use tubular daylight

devices that capture solar light for use in enclosed spaces. Roof sheets in all plants are being improved to

enhance solar lighting in warehouses, utilities and water treatment areas. Solar water heating is the next

step in the journey.

Use of bio-fuels in PepsiCo plants helps reduce dependence on fossil fuels

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PepsiCo Community Check–Dam Project Paithan, Aurangabad

The initiativePepsiCo conducted a water resource assessment study near its Aurangabad plant. In partnership with a

civil society organization, Alternative Development Initiatives (ADI), PepsiCo selected the most vulnerable

village, Wahegaon, as well as Mudhalwadi, Rahatgaon and Esarwadi, as the core areas to implement its

interventions to replenish ground water. PepsiCo India then constructed 13 check-dams and recharged over

100 wells.

ImpactThe project created the potential to recharge more than 1 billion liters of water. It benefits nearly 12,000

community members through improved access to water, additional crops, increase in yield of rain-fed

crops and the opportunity for a second cultivation cycle during the Rabi season due to improved availability

of water. Water levels have visibly risen after years; old dry wells have water again and farmer incomes

have improved by Rs. 20,000/acre. PepsiCo has also provided safe drinking water to Nagnath Vidyalaya,

Wahegaon, by laying an underground pipeline, an overhead tank and taps.

Case Studies: Community Water Initiatives

13 check dams at Paithan have benefited 12,000 people

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Replenishing Water Through Community Water Harvesting Project, Neelamangala

The initiativeIn Neelamangala, Bangalore Rural, PepsiCo has partnered with ADI to protect and replenish water resources

through the creation of water harvesting structures by introducing artificial recharge systems within water

bodies. The water project at Neelamangala focuses on the creation of water harvesting structures in

three villages—Thorecamphalli, Hosur and Tonchinkuppe, and also the installation of a roof-top rainwater

harvesting structure in the T. Begur village. The goal of the project is to improve water resources in the

community, recharge wells and increase the production of rainfed crops.

ImpactThe project has created the potential to recharge 908 million liters of water per year. This benefits 4000

people through improved water resources in the community, recharging wells and also improved water

availability for rainfed crops.

Water recharge pond at Neelamangala

Water harvesting initiatives by PepsiCo help 4000 people get improved access to water

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Water Harvesting Project, Panipat

The initiativePepsiCo successfully completed its community water initiatives in Panipat. The project focuses on the

rejuvenation and creation of water recharge structures aimed to improve the water availability for the

neighboring community. PepsiCo has constructed four ponds (water harvesting structures) with an induced

recharge system that will enhance ground water recharge in three villages – Babarpur, Gudha and Ganjbar,

with the potential to recharge 175 million liters of water.

ImpactThe project benefits nearly 10,000 people in and around Panipat. PepsiCo has also introduced in one pond

the sustainable ‘duckweed system’ to treat village wastewater and use it for pisciculture and irrigation.

PepsiCo has constructed four water harvesting structures with a potential to recharge 175 million liter of water

Water conservation and harvesting initiatives in and around Panipat benefit 10,000 people

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TO THE PLANET WE ALL SHARE

It’s a promise to be a good citizen of the world, protecting the Earth’s

natural resources through innovation and more efficient use of land, energy, water and packaging in our operations.

TO THE PEOPLE OF THE WORLD

It’s a promise to encourage people to live healthier by offering a portfolio of both enjoyable and wholesome food

and beverages.

TO THE ASSOCIATES OF PEPSICO

It’s a promise to invest in our associates to help them succeed and develop the skills needed to drive the

company’s growth, while creating employment opportunities in the

communities we serve.

For any queries contact: corporate.communications@pepsico.com

For more details, visit www.pepsicoindia.co.in