On the revolutions in energy, technology, and sustainability.

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October 8, 2019

Good morning.

PepsiCo, the owner of brands such as Tropicana, Gatorade, Mountain Dew and — of course — Pepsi, issued its first ever green bond yesterday, seeking to raise $1 billion to finance green initiatives laid out in the company’s 2018 sustainability report.

Among those goals is the target of reducing “virgin plastic content” across PepsiCo’s beverage portfolio by 35% over the next six years. That 35% reduction target is slightly lower than the 50% reduction goal Unilever announced the same day, which is maybe why the news of the former was a little lost amidst reporting of the latter.

Unilever’s cut back will eliminate 400,000 tons of new plastic production from its operations. PepsiCo’s announcement wasn’t clear on how many tons of plastic the company would save. According to PepsiCo’s 2018 report, however, the company used 2.2 million tons of new plastic across its food and beverage packaging last year. A 35% reduction on that total would save 770,000 tons, but PepsiCo’s target only applies to the company’s beverage brands.

Either way, that’s a good saving, and the drinks maker intends to use some of that $1 billion to invest in research on bio-plastics, which could bring benefits to the industry at large.

Leading PepsiCo’s push into sustainability will be Simon Lowden, a 23-year PepsiCo veteran who was promoted from his role as President and Chief Marketing Officer of Global Snacks and Global Insights to become the company’s first Chief Sustainability Officer yesterday.

“I am proud PepsiCo has issued its first Green Bond to address global challenges like carbon emissions, access to clean water, and plastic waste, and that the company continues to be a leader in tackling critical sustainability issues,” Lowden said in a press release.

For my part, I’m glad the onus on reducing, recycling and reusing is shifting from consumers to corporations in a real way. Earlier this year Proctor & Gamble announced plans to half the amount of plastic it uses; Nestlé is phasing out all non-recyclable plastic; and Dow Chemical, one of the world’s largest plastic makers, is investing in circular economies.

There’s clearly investor appetite for these sorts of shifts in business model, too. According to Bloomberg, PepsiCo’s billion-dollar bonds have a 30-year maturity with a yield 92-basis points above Treasuries and were oversubscribed, with investors placing orders totalling $3.65 billion.

More below.

Eamon Barrett



Carbon Copy

Don't bank on it. The majority of the world’s 50 largest banks have yet to make commitments to sustainable finance, research from the World Resources Institute found, although the balance is close to shifting — 23 banks have made commitments, 27 have not. However, many of 23 banks committed to green financing are still investing in fossil fuels more than they are in sustainable projects. Reuters

Building the future. Architecture is stuck in an “outdated paradigm of mitigation” says Michael Pawlyn, who helped design the U.K.’s biodiversity dome, the Eden Project. For Pawlyn, being sustainable isn’t good enough; architects should be targeting net-positive rather than net-zero impacts. Architect Bill McDonough said something similar at Fortune’s recent sustainability forum. For Pawlyn, the solution lies in biomimicry — or designing buildings and systems that imitate structures found in the natural world. Dezeen

Droning on. XAG, a Chinese agritech drone maker, has partnered with pharma giant Bayer to demonstrate a new A.I.-powered unmanned aerial system designed to streamline crop spraying. In ten minutes the drones can cover an area that took farmers three days to dust by hand. Besides the obvious time-saving benefits, drone deployment is also more accurate and helps reduce the volume of excess pesticide used. TechNode

Extinction Rebellion. The environmental protest group Extinction Rebellion has planned a series of disruptive demonstrations worldwide over the next two weeks. In New York yesterday, a group of protesters played dead on Wall Street; in London, 280 protesters were arrested; 100 were arrested in the Netherlands, with other protests occurring in France, Germany, Australia, Austria, Spain and New Zealand. Reuters

In The Loop

Why Citigroup Just Named a Chief Sustainability Officer by Katherine Dunn

Plant-Based Meats Have Huge Potential in China, But Beijing Wants a Homegrown Champion by Eamon Barrett

The World’s Biggest Turbines and No Subsidies: How Offshore Wind Is Entering a New Era by Geoffrey Smith

Fashion’s Next Major Battlefield: Sustainability by Ankiti Bose

Treat Social Risk Like Any Other Risk to Avoid Business Disruptions by Margery Kraus and Barie Carmichael

Allbirds Founders: Why We Need to Eliminate Plastics for Good by Tim Brown and Joey Zwillinger

These Shoes Are Shifting the Economics of Deforestation in the Amazon Rain Forest by Clay Dillow

Companies That Mention Hurricanes in Their 10-Ks Lose 5% of Market Value by Erik Sherman


Folks at The Economist fed an essay question on climate change into a natural language processor, which spat out a 1,000-word treatise on what economic and political change is needed for an effective response to climate change. Sadly, for the robot, a panel of human judges thought the essay missed the mark, criticizing the A.I. for failing to offer a practical, novel or definitive solution.

"The essay does not fundamentally answer the question nor present a single novel idea, is not strongly argued and is not particularly well written/structured. In addition, I do not think it shows a strong understanding of existing climate policy nor of the scientific literature coming out of the IPCC," one judge rallied.

It seems, then, that humans remain our own best bet for solving the problem. 


Closing Number

5 degrees Celsius

We always knew a nuclear war would be devastating, but it’s interesting to learn how even a relatively small-scale regional nuclear conflict could have severe global ramifications. A team of researchers crunched the numbers on the environmental fallout of a hypothetical nuclear conflict between India and Pakistan and found that such a war could result in a global cool down between 2 and 5 degrees Celsius. The temperature drop would be caused by 36 teragrams (that’s 36 billion kilograms) of carbon fuming up into the atmosphere, blocking up to 35% of the Earth’s sunshine. The climate would take ten years to return to normal, but society would probably take a while longer.


This edition of The Loop was edited by Eamon Barrett. Find previous editions here, and sign up for other Fortune newsletters here.

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