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The latest Pepsi Challenge: Purpose

October 5, 2011, 5:23 PM UTC

PepsiCo CEO Indra Nooyi

If there is any contradiction between a company that sells Mountain Dew and Doritos and one that tries to actively improve the lives of its consumers, PepsiCo CEO Indra Nooyi (No. 2 on Fortune’s Most Powerful Women list) doesn’t see it. Speaking at Fortune’s Most Powerful Women’s conference, she outlined a strategy that sounded as much like a political call to action as an approach to corporate profit growth.

During the global meltdown, “Capitalism lost its conscience,” she said, to the appreciative murmurs of the conference attendees. “People forgot what the consequences would be for society at large because they didn’t worry about the stakeholder.”

As she described it, PepsiCo (PEP) is trying to become a corporation that answers to its shareholders, yes, but not at the expense of everyone else. This is not simply part of a company’s corporate social responsibility (CSR) role, but instead a strategy that she hopes will infuse every decision made at the $63 billion-in-revenues company.

Full transcript of Indra Nooyi’s conversation with Fortune executive editor Stephanie Mehta

CSR, she says, is perceived as “something you do in the evenings, that can be shut down if you don’t have money. It’s sort of like going to confession if you have made a mistake,” she says. “For us, purpose is something that cannot be shut down.” It is both idealistic and practical, she says, using the example of deciding first to build a plant that doesn’t use more water than it produces, rather than doing it and apologizing later — which, ultimately, won’t be good for the company either. “If you don’t go with that mindset, trust me, you will be shut down within a few years,” she says.

Nooyi also discussed the company’s gradual shift toward foods that are “good for you” rather than simply “fun for you” (Nooyi’s euphemism for PepsiCo’s classic snack items). She projected that by 2030, the “good for you” portion of the company may rise to 30% of revenues from its current 20%. That’ s a big change, but not a radical one.

At the end of her interview, Nooyi brought up the concept of “Conscious Capitalism,” citing a speech written by Whole Foods’ (WFM) John Mackey as an inspiration. “If we don’t all practice capitalism with a conscience, we are doing the world a disservice,” she said, ending with a “plea to everyone who is a CEO.” At that moment, she sounded as much like one of the NGOs that have protested against some of PepsiCo’s decisions in the past as she did its chief executive. A disconnect on some levels, perhaps, but an inspiring one all the same.

Check out additional coverage from Fortune’s Most Powerful Women summit.