PepsiCo – Samantha Klug – 2019

Goals 

PepsiCo  is a supporter of the Task Force on Climate-Related Financial Disclosures (TCFD). The TCFD aims to help financial markets function smoothly by facilitating information transparency around the private sector’s exposure to climate change. PepsiCo enlisted EDF Climate Corps fellow Samantha Klug to increase climate resiliency by building a system to assess forward-looking climate risks and opportunities via scenario analysis.

Solutions

After reviewing available resources, tools, scenario data, and partners, Klug helped PepsiCo partner with a third party to conduct a hotspot network screening study for 10+ physical and transition risks, opportunities, across sourcing locations, plants, distribution sites, and offices. After identifying the climate risks, she discussed the importance of scenario analysis with relevant stakeholders across multiple business functions, highlighting how the results of this screening study could be used, initially, to perform deep dive analyses on hotspots and, ultimately, drive resiliency strategies. PepsiCo’s Climate team is also working with industry partners to share knowledge and improve available scenario analysis resources.

Potential Impact

The scenario analysis journey will ultimately help PepsiCo understand  its climate risks – including physical damage, regulatory implications and also understand financial implications from stranded assets or income statement impacts of foregone revenue or increased costs. PepsiCo can then weigh such risks against resiliency strategies, such as weather-proofing or resource efficiency, to make informed decisions about the future of its operations. Finally, improving and disclosing resilience strategies will help keep investors informed and maintain access to strong credit.