PepsiCo on Partnerships and the Circular Economy (Q&A)

April 20, 2020 3 minute read

PepsiCo on Partnerships and the Circular Economy (Q&A)

Simon Lowden’s career at PepsiCo spans more than two decades in a variety of roles across Europe and North America. As the company’s first C-Suite executive focused on sustainability, Simon is responsible for overseeing the company’s efforts to integrate sustainability across all of its global business and operations.

In this interview, which was conducted last November for my forthcoming book, Simon describes PepsiCo’s focus on circularity and the importance of cross-sector partnership in delivering on sustainability goals.

PepsiCo Simon Lowden quote

An Interview with Simon Lowden, Chief Sustainability Officer, PepsiCo

Tell us a bit about where PepsiCo is today on its sustainability journey.

As with many businesses today, we are making a transition from sustainability being a nice thing to do, run by passionate people, to operationalizing it and sustainability becoming a real business driver. That is the transition we are going through.

We won’t have a healthy future unless we ensure that sustainability, in its broader sense, is incorporated across the business. When we think about our agricultural impact, carbon, water, and diversity—that is what we really mean by sustainability.

One area of increasing attention in sustainability is the circular economy. Tell us how PepsiCo is engaging on the circular economy and where partnerships fit into your circular strategy.

Circular economy is brutally hard because it is so multi-disciplinary. On the supply side, it requires consumer action, infrastructure to collect waste the right way, technology to convert collections back into usable material, manufacturers to incorporate the material, and industry to use the material without compromising the quality and safety of the product. It is a multi-faceted beast!

And then there’s the policy side. Two thirds of the world’s population today cannot use PET recycled products in food grade products due to government regulations. Solving this problem requires us as an industry—PepsiCo, Coca-Cola, Danone, etc.—to go the authorities in India, China, and other places around the world to advocate for changes in recycling policy.

This gets to the heart of the matter. The circular economy issue is so large that PepsiCo cannot tackle this on our own, even with all of our resources. This means that it is critically important that we work with our peers in the industry to tackle this issue. There is a time for competition and there is a time for pre-competition. In the case of the circular economy, I believe you are beginning to see a new pre-competitive partnership approach. There is a new model emerging where you will see Coca Cola and PepsiCo working together to provide industry solutions. To the best of my knowledge, this is a totally new thing.

This collaboration originates right from the top. Ramon and James (PepsiCo’s and Coca-Cola’s CEOs, respectively) have been on the stage together to talk about becoming more and more aligned on circularity. It is important because our suppliers need to hear this. They need to know that we are serious.

In addition to pre-competitive partnerships, how do cross-sector partnerships with NGOs and others factor in?

I think NGOs help inform and shape what we do. We will never be in 100% alignment with every NGO or activist. Nor should we. Nor should they be 100% aligned with us. We have to be informed by each other. NGOs can provide catalytic platforms through which we can stimulate interest in doing things in a better way. NGOs bring expertise, they bring networks, and sometimes they bring funding, all of which is valuable.

While we very much value the expertise of our partners, collaboration works best when there is adaptability. Partners shouldn’t come in with a finite model. We need partners to come in with an approach, jog with us a bit, and then we can come up with an approach that works for all of us and our stakeholders.

As Chief Sustainability Officer of one of the largest food and beverage companies in the world, what advice would you give to your fellow CSOs in other companies?

Be really clear on the questions you need to ask. You need to be clear on your strategic intent. Make sure your CEO is with you. Sustainability is going to be the CEO’s issue, so you need to make sure you are aligned with their priorities. If you don’t, you’ll wind up with a thousand partnerships all over the place that are not aligned with where the company is going.

What’s more, you have to treat these partnerships like any business relationship. What is the mutual benefit? You need to make sure all parties—business, NGOs, government—are getting out of the partnership what they need.

Our relationships with partners should be dynamic. We need to push each other, keep on it, and be agile. Don’t have the partnership subsumed by the way you work traditionally inside your organization. Part of the reason you are working with a partner is precisely because they work differently than you. Having someone in your organization who owns that relationship and is responsible to keep that conversation dynamic is critical.

CSOs also need expertise inside the company on how to forge these relationships. You need people who know what they are doing and how to work with these partners. A strong sustainability team has to have passionate people able to work with outside partners and business teams to help understand how to integrate it into the business.

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If you are a corporate leader and would like to be a part of a discussion about these and other issues in the presidential transition, contact Resonance Strategic Partnerships Manager, Seth Olson.