PepsiCo to Use Eco-Friendly Plastic Alternative in Brazilian Logistics Centers

As part of its goal of achieving net-zero carbon emissions by 2040, Pepsico Inc. (PEP) has announced that it will begin using an innovative plastic alternative that prevents greenhouse gas emissions in two of its logistics centers in Brazil. UBQ is a new bio-based thermoplastic material developed by the Israeli startup of the same name to develop a sustainable pallet that uses unsorted household waste, including organics, in its composition.

The UBQ material is converted from 100% unsorted municipal solid waste, including mixed plastics, paper, cardboard, and organics, and is suitable to substitute conventional polymers in various durable applications. During the manufacturing process of UBQ material, waste is diverted and greenhouse gas emissions are prevented.

Through this initial project, the material implementation is projected to save more than 6,500 kilograms (kg) of greenhouse gas emissions — the equivalent of the annual carbon sequestration of 534 trees. More than 739 kg of mixed waste will be redirected from landfills, looped back into the material as a valuable resource.

The first phase of the project includes manufacturing 830 ecological pallets for use in two of the company’s logistics centers. In addition to UBQ, the pallets are made from recycled materials that include recycled PP resin and recycled BOPP (a plastic film used in the company’s snack packaging), which completes the circular economy cycle.

“This innovation is very exciting for PepsiCo because it helps us on our journey through materials that replace virgin plastic while at the same time working on CO2 reduction,” said Raphael Cyjon, senior director of operations at PepsiCo LatAm. “In addition, this is a differentiated material because it represents an alternative to the chain as a whole, especially with regard to collection, sorting, transportation and final disposal in landfills. Now we will go further, scale this solution in Brazil, Latin America and why not in other parts of the world.”

PepsiCo is also studying the possibility of implementing UBQ as a raw material for other applications across the supply chain.

PepsiCo has set environmental goals that include reducing greenhouse gas emissions by 40% in less than a decade and reaching net-zero emissions by 2040. It also has global objectives that include cutting virgin plastic by 50% across the entire food and beverage portfolio and using 50% recycled content in its plastic packaging by 2030; designing 100% of packaging to be recyclable, compostable, or biodegradable; and investing to increase recycling rates in key markets by 2025.

Those looking to invest in PepsiCo through an environmental, social, and governance lens may want to consider the American Century Sustainable Equity ETF (ESGA), an actively managed fund that blends fundamental financial analysis with a strategy that invests in U.S. large-cap companies with large growth and value potential that rank highly on ESG metrics.

The fund is a semi-transparent ETF, meaning that allocations are disclosed on a quarterly basis, not daily. As of its last disclosure, PepsiCo was one of ESGA’s top holdings, weighted at 1.44%.

ESGA has a total annual fund operating expense of 0.39% and total assets of $149 million.

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