Whereas: Biodiversity loss is a global systemic risk. Investors and governments worldwide are increasingly acting to address
the impacts and dependencies of economic activity on natural systems. At the United Nations Biodiversity Conference in 2022,
190 countries agreed to take steps to prevent biodiversity loss. The resulting Global Biodiversity Framework calls on businesses
to assess and disclose biodiversity dependencies, impacts and risks, and reduce negative impacts.
Pepsi’s 10-K acknowledges that “any failure to achieve or properly report on our goals with respect to reducing our impact on
the environment or perception of a failure to act responsibly with respect to the environment ... can lead to adverse-publicity,
which could result in reduced demand for our products, damage to our reputation or increase the risk of litigation.”
Failure to comprehensively assess its natural capital dependencies and ultimately mitigate their impacts on the company may
expose PepsiCo to unnecessary risk:

• Systemic risk: More than half of the world’s GDP is either moderately or highly dependent on nature’s services, and the
Food and Beverages industry depends on natural services for $1.4 trillion of value generation. By some estimates, tens of
billions of dollars in assets could be at risk of stranding over the next five to ten years1

• Financial risk: Financial institutions with US $8.7 trillion AUM have committed to eliminate agricultural-commodity-driven
deforestation from their portfolios by 2025. As an increasing number of asset managers incorporate such nature-related risk
into investment decision making, PepsiCo must assess and mitigate activities leading to biodiversity loss in its supply chain or
risk becoming uninvestable.
• Regulatory risk: The recently adopted European Sustainability Reporting Standards include mandatory reporting of
biodiversity and ecosystem impacts and risks,3
and mandatory biodiversity reporting in line with Taskforce on Nature-related
Financial Disclosure (TNFD) is under discussion in the UK4
. The International Sustainability Standards Board is reviewing the
work of the TNFD as it considers developing natured-based disclosures5

While PepsiCo has developed a number of commendable sustainability Initiatives, it has not undertaken a systematic review
of its dependencies and impacts on biodiversity and natural capital. Without a comprehensive assessment of the company’s
biodiversity impacts, dependencies, risks, and opportunities to inform its policies, PepsiCo may subject itself to unnecessary
systemic, regulatory, and financial risk.