"Biodiversity loss is a global systemic risk. At the United Nations Biodiversity Conference in 2022, 196 countries agreed to take steps to prevent biodiversity and nature loss. The resulting Global Biodiversity Framework calls on businesses to assess and disclose biodiversity impacts, dependencies, risks and opportunities, and to reduce negative impacts.

Nature-related risks are relevant to PepsiCo, which depends on an uninterrupted supply of ingredients from 60 countries to manufacture its products.1 The company has significant impacts through sourcing large volumes of commodities with high carbon footprints, land- and water-use implications, and nature impacts from agrochemicals.

Failure to comprehensively assess its natural capital dependencies and mitigate its impacts on biodiversity may expose PepsiCo to unnecessary risk:

• Systemic risk: More than half of the world’s GDP is dependent on nature’s services.2 The World Bank estimates that the collapse of ecosystem services could result in a $2.7 trillion reduction of GDP as early as 2030.3 More than half the world’s food production is at risk of failure within the next 25 years unless action is taken to conserve water and end the destruction of freshwater ecosystems.4
• Financial risk: An increasing number of asset managers incorporate nature-related risks and impacts into investment decision-making. Financial institutions with $8.7 trillion in assets under management (AUM) have committed to eliminating agricultural commodity-driven deforestation from their portfolios by 2025.5 190 financial institutions representing $24 trillion in assets have signed the Finance for Biodiversity pledge, calling on global leaders to take effective measures to reverse nature loss in this decade.6
• Regulatory risk: In October 2024, 27 pension funds with AUM of $2.5 trillion urged governments to institute mandatory nature disclosures for companies.7 The International Sustainability Standards Board is reviewing the Taskforce on Nature-related Financial Disclosure (TNFD) framework as it considers developing nature-based disclosures.8 In Europe, the Corporate Sustainability Reporting Directive is scheduled to include mandatory reporting of biodiversity and ecosystem impacts and risks.9


A recent nature disclosure assessment found that PepsiCo fell short of benchmark criteria in five of six performance indicators.10,11 While PepsiCo has developed several commendable sustainability initiatives, it has not undertaken a systematic review of its dependencies and impacts on biodiversity and nature. Without such a comprehensive assessment to inform its policies, PepsiCo subjects itself to unnecessary systemic, regulatory, and financial risk."