PepsiCo takes top spot in global warming battle
By Bruce Horovitz (USA Today) - April 30, 2007
Guess what corporate global warming fighter the Environmental Protection Agency will crown its national “green power” kingpin Monday. Whole Foods? No. Starbucks? Nope. Give up? It’s PepsiCo.
When the EPA’s quarterly list of the 25 greenest energy users is released today, the soft drink and snack food giant will be sitting at the very top.
PepsiCo (PEP) on Monday will announce that it will purchase 1 billion kilowatt-hours of renewable energy credits over the next year — equal to all the electricity used by all of PepsiCo’s U.S. facilities. That’s enough electricity to power 90,000 average American homes for one year.
Each credit represents a subsidy to help produce one megawatt hour of renewable electricity, such as wind power. Producers of renewable energy rely on brokers to sell credits that drive demand for renewables and, thus, reduce emissions that would otherwise have been produced by burning fossil fuels.
PepsiCo’s cost: about $2 million. That might not sound like a lot, but in support for renewable energy, it’s huge.
“It’s a big deal,” says Bill Wehrum, the EPA’s top federal air pollution official. “They’ve vaulted to the top of the list.”
The EPA’s list has become a marketing tool. With global warming a big issue — especially with coveted young consumers — marketers are elbowing each other to stand tall on the environmental soap box.
“Companies are starting to say: ‘I’m greener than you are,’ ” says Katharine Paine, an image consultant.
As a marketing hook, it has legs, too. Some 95% of kids ages 13 to 18 recently surveyed by school magazine Weekly Reader said they’d heard of global warming. One in four said they were “very worried” about it.
“To the extent we motivate other companies to get involved is a good thing for America — and for the planet,” says Rob Schasel, director of energy, utilities and conservation at PepsiCo, parent to Pepsi, Frito-Lay and Quaker.
Its renewable energy credit buy will be double that of the previous leader, financial services company Wells Fargo.
By offsetting 100% of its electricity use with renewable, PepsiCo matches — but on a much larger scale — a move organic grocer Whole Foods made in 2006.
PepsiCo’s three-year deal is with Sterling Planet, retailer of renewable credits. Energy for which credits will be used: wind, biomass (i.e. tree trimmings and animal waste) or small hydroelectric projects, says Sterling CEO Mel Jones.
Deals like this “will create a new market pull for renewable energy,” says Blair Swezey, principal policy adviser at the National Renewable Energy Laboratory.
Even the Sierra Club likes it. “This is extremely rare,” says Dave Hamilton, director of global warming. “It comes at a time when we’re looking for a leader.”