Lots of the world’s strongest leaders are simply as anxious about local weather change as you’re.
The looming menace of world warming was “the elephant within the room” at this yr’s World Financial Discussion board (WEF), Robert Azevedo, govt vice chairman and chief company affairs officer of PepsiCo, mentioned in an interview at Davos with Fortune Join govt editor, Peter Vanaham. The theme of WEF this yr was “cooperation in a fractured world.”
Azevodo mentioned the difficulty was of specific significance and curiosity to him. “In all places you go, everyone you speak to, local weather change is a part of the agenda,” he mentioned. “For us, it’s important. We’re a meals firm, so larger temperatures all over the world means decrease yields for the crops. Each one diploma centigrade the Earth warms up, 10% of staple crops exit. It’s an pressing and necessary matter for survival of the enterprise now.”
The quickly altering local weather has lengthy been on the minds of PepsiCo execs. “We’re at a crossroads,” Indra Nooyi, former chairman and CEO of PepsiCo, wrote for Fortune in 2020. “The time for platitudes and guarantees is over. We should create a greater planet for future generations, and enterprise have to be on the vanguard.”
Alongside its competitor, Coca-Cola, PepsiCo has been ranked because the world’s main plastic polluter for 4 consecutive years. In September 2021, PepsiCo pledged to halve its use of virgin plastic throughout its portfolio by 2030. And, by means of a brand new initiative known as PepsiCo Constructive, it would incorporate half-recycled content material in all its plastic packaging and scale new enterprise fashions that require little or no single-use packaging. ThePepsiCo Basis, of which Azevedo serves as chairman of the board, has thrown its weight behind lowering greenhouse fuel emissions.
“Addressing packaging waste is a worldwide challenge of paramount significance, and it’ll require systemic change,” Azevedo tells Fortune. As a result of there isn’t any single technique to obtain these ambitions, he added, the corporate is leaning on “a quantity” of methods geared toward eliminating single-use plastics.
“Finally, our imaginative and prescient is to assist create a world the place packaging by no means turns into waste,” Azevedo mentioned. “It’s the fitting factor to do for the planet, and the good factor to do for our enterprise.”
Local weather takes the cake
Local weather change was a sizzling matter at Davos this yr. That could be as a result of, every week previous to the convention, the Nationwide Oceanic and Atmospheric Administration launched a report confirming that excessive climate triggered over $165 billion in harm in 2022—a determine that seemingly stands to extend if nothing is finished.
Firms are dealing with growing stress to make operations extra environmentally pleasant and socially aware, whereas coping with critics who say ESG insurance policies don’t prioritize enterprise pursuits.
The query of whether or not a recession will lead corporations to stroll again their ESG targets, or put them on maintain, “has been the dialogue all week,” George Oliver, CEO of Fortune 500 manufacturing firm Johnson Controls, informed Fortune CEO Alan Murray. “[Will an economic slowdown] change the dedication that CEOs have made to decarbonization? It hasn’t but. I don’t even assume it has modified the tempo…I feel there’s a recognition that point is important, and there’s a lot to get accomplished.”
John Holland-Kaye, CEO of London’s Heathrow Airport, proposed that high-net value individuals and corporations with excessive web worths ought to pay extra for aircraft tickets to cowl everybody’s prices of sustainable jet gasoline.
“We must be paying the premium for sustainable aviation fuels in order that we are able to get the price of it down in order that the mass market and creating international locations don’t need to pay for the power transition,” Holland-Kaye mentioned. “The rich individuals on this room and rich nations ought to be funding the power transition in aviation to assist help creating international locations.
Past the ever-present local weather threat, quite a few pressing points had been on Azevedo’s thoughts at Davos, he informed Vanham: fiscal financial insurance policies, inflation, unemployment, provide chain upsets, and political tensions within the U.S., China, and Russia, particularly as they’re associated to grease and commodity costs.
However local weather change stays before everything, each for Azevedo, PepsiCo, and the vast majority of WEF attendees; this yr, they arrived to an unseasonably temperate Davos. As Murray reported in his CEO Each day e-newsletter, “There wasn’t a CEO to be present in Davos who wasn’t absolutely embracing the enterprise effort to try to attain web zero [emissions] by 2050.”
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