PepsiCo has watered down a suite of key climate, water and packaging commitments, citing a lack of system-wide investment in cleaner technologies and support from policymakers as reasons for the shift.

The company is viewed as a leader in some areas of sustainability, having set a science-based target in 2016 and upgraded the ambition of that target in 2020. And the company’s Climate Transition Plan, released today, reveals areas of solid progress: A commitment to scale regenerative agriculture, for example, has been increased from 7 to 10 million acres by 2030. But several other targets have been revised downward.

The changes are necessary because policies to support sustainability and outside investment in clean technologies have not progressed as fast as was anticipated, Chief Sustainability Officer Jim Andrew told Trellis. “We can advocate, we can collaborate, we can work to try and move forward,” he said, “but there’s only so much that we can do.”

Climate

Interpreting PepsiCo’s new emissions reductions targets is complicated by the company’s decision to move its baseline year from 2015 to 2022. Trellis has attempted to clarify the change by pegging the new commitments to the original 2015 baseline.

• Scope 1 and 2: The company’s original goal of a 75 percent cut by 2030 has been changed to 61 percent by the same year. In 2022, these emissions made up 8 percent of PepsiCo’s total emissions of 54 million metric tons of carbon dioxide equivalent.
• Scope 3: A targeted 40 percent cut by 2030 has been split into two commitments. Emissions from land use, which constitute almost a quarter of the total, will be downgraded to 27 percent by 2030. The target for other Scope 3 categories, including transportation and purchased goods, remains unchanged.
• Net-zero: The target date of 2040 has been pushed back to “2050 or sooner.”

Despite the changes, the goals are aligned with a pathway that limits global temperature increases to 1.5 degrees Celsius and have been validated by the Science Based Targets initiative, the company said.

Packaging

Many major companies, including the Coca-Cola Company, PepsiCo’s long-time rival, have recently backtracked on packaging commitments. PepsiCo’s latest targets add to that list.

• Virgin plastic: PepsiCo originally targeted a 20 percent reduction by 2030 in the amount of virgin plastic from non-renewable sources it uses in its packaging, relative to 2020. By 2023, the amount had grown by 6 percent. The company’s new goal is a 2 percent year-on-year reduction through 2030.
• Recycled content: A commitment to using 50 percent recycled content in plastic packaging by 2030 has been changed to 40 percent by 2035.
• Reusables: A goal of delivering one in five beverage servings through reusable models by 2030 has been abandoned, but the company will continue to explore reuse opportunities and report on its progress qualitatively.

Water

This area of work contains a couple of bright spots for PepsiCo: The company achieved its 2025 goal of improving operational water-use efficiency by 25 percent in high water-risk areas two years ahead of schedule, and retained its commitment to becoming net water-positive by the end of the decade.

On two more granular targets, however, it released less ambitious commitments. The company had committed to reaching “best-in-class” water-use efficiency by 2030, defined as using 1.2 liters of water for every liter of beverage and 0.4 liters for every kilogram of food. It’s now striving for “average” efficiency, defined as 1.4 liters/liter for beverages and 1.7 liters/kilogram for food.

System-wide headwinds

The altered targets were necessary because the broader business climate does not support more ambitious measures, Andrew said. Many of the targets were set around 2020. Expectations at the time about investment in clean technologies and associated policy support have not panned out as hoped, he argued, undermining the company’s ability to stay on track.

“At the time, 2020, the world was a different place,” said Andrew. “There were all sorts of things that in the fullness of time people have learned are going to take longer.”

Electric vehicles are one example cited by Andrew, who noted that cost-competitive EVs don’t exist for some of PepsiCo’s transport needs. “Charging infrastructure doesn’t exist in all the places that you would want,” he added.

On the packaging side, progress in some regions has been stymied by a lack of regulation. India only began to allow recycled material to be used in food-grade packaging in 2023, Andrew noted, and China has still not made the move. “There’s a whole set of policy issues,” he said.

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Legal scholars are raising the alarm about the European Union’s (EU) decision to weaken its corporate sustainability disclosure, saying that it could well expose companies to climate-related lawsuits.

Thirty-one academics from University of Oxford, University of Cambridge, Utrecht University and other institutions signed on to a letter warning that the EU’s February 2025 Omnibus proposal to scale back the requirements and guidance of the Article 22 Corporate Sustainability Due Diligence Directive (CSDDD) is sure to cause chaos. Specifically, the signees believe that lighter reporting obligations for emissions and more variance in the requirements among EU member states, can only increase reporting mistakes — and, in turn, climate-related litigation.

“If you do not have Article 22 CSDDD, then it is quite unclear what is being expected of companies,” said Associate Professor Thom Wexter of Oxford’s Faculty of Law. “And if [EU member states] don’t capture corporate emissions within their legislative framework, they’ll miss a huge part of their economy.”

This is what organizations in the EU — or doing business within it — need to know about the proposal.

Context and clarification

In the past couple of years, the EU has introduced a pair of complementary regulations to standardize sustainability reporting for corporations:

• CSRD, or Corporate Sustainability Reporting Directive, which requires companies to disclose Scope 1, 2 and 3 data; and
• CSDDD, which assesses the impact and inherent risk posed to humanity and the environment by corporate operations and supply chains.

Prior to the Omnibus proposal, CSDDD required companies to “put into effect” a climate transition plan. But now that language will be removed, and that change, the experts argued, falls short of mandating implementation.

Industry appears to favor both CSRD and CSDDD in their original forms. A survey conducted by professional association WeAreEurope found that only 25 percent of responding companies approve of the changes proposed in the Omnibus package.

Obligations will not be met

The European Court of Human Rights ruled in 2024 that all 27 EU member states are obligated to “adopt, and to effectively apply in practice, regulations and measures capable of mitigating the existing and potentially irreversible, future effects of climate change.” But, the letter writers noted, emissions from the largest corporations in each country “are so significant that they are bound to exceed their territorial emissions budgets.”

More to the point, they predict that the differing expectations set by the law of each country and the EU will open up corporations to lawsuits should they fail to comply with either.

Internal market fragmentation

An international human rights case, Milieudefensie et al v. Shell, was the impetus for the creation of CSDDD. In November 2024, the Hague Court of Appeals ruled that Shell was obligated to reduce its emissions. Without any form of guidance, though, there was no way to hold the company accountable.

“Shell complained that the decision only affected them,” said Wetzer. “They were saying it would be much better if the obligation applied across the [entirety of] the economy.” Article 22 and CSDDD were implemented to legally enforce standards across all member states that corporations could use as a baseline.

But now, if the overarching regulatory framework of CSDDD were to be lost, companies would be held to standards imposed by each member state. “A growing number of companies are being sued in court for causing harm, which may be the consequence of the lack of clear regulatory requirements,” noted an assessment by the EU Commission. These companies currently include TotalEnergies, ENI, VW, BNP Paribas, and ING, among others.

“The litigation is going to rise, country by country, to companies operating in different parts of the EU,” said Wetzer.

Encouraging empty promises

CSRD compliance complements CSDDD, but when one is weakened, the symbiotic relationship crumbles. Prior to the Omnibus package, CSRD required transparency in the creation of climate transition plans, and CSDDD insured implementation of those plans. If CSDDD were no longer to require plan implementation, companies with unrealized plans could be accused of greenwashing.

“Without [CSDDD] obligation, there is a risk of encouraging empty promises,” the letter stated. And that could lead to lawsuits regarding misrepresentation.

No guiding regulations will increase costs

The 31 legal scholars are not the only ones who believe that companies that don’t fully commit to climate transitions now will only be creating more work and exposure to financial risk for themselvesin the future.

KPMG U.S. Sustainability Leader Maura Hodge previously told Trellis that regardless of legislative rollbacks, companies should continue to move forward on all emission inventory and mitigation plans, adding the reminder that U.S. state corporate compliance laws, like California’s, still stand.

[Connect with more than 3,500 professionals decarbonizing and future-proofing their organizations and supply chains through climate technologies at VERGE, Oct. 28-30, San Jose.]

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The race to commercialize apparel recycling is heating up. On May 20, Reju, a startup within a Dutch engineering and fossil fuel company, announced plans to build a polyester recycling plant in the Netherlands. Its projected annual output: 300 million articles of clothing.

Since its launch 18 months ago, Reju has opened a “Regeneration Hub Zero” demonstration plant in Frankfurt, Germany, which is expected to officially come online this year. The company has also inked partnerships with textile collectors and sorters and spoken with more than 100 brands and retailers to drum up interest for its Reju Polyester product, according to CEO Patrik Frisk.

“We are talking to everybody in the American market, and everybody in the European market,” said Frisk, a former Under Armour chief executive with decades at brands including The North Face, Timberland and Gore-Tex.

The global popularity of polyester, brewed from the fossil fuels that have hastened the climate crisis, has skyrocketed in recent decades, featuring in two-thirds of new clothing. The world churns out 33 million metric tons of plastic-based fibers each year. Only 3 percent gets recycled, according to the Ellen MacArthur Foundation. 

The waste is a mounting problem for the fashion brands and retailers that are gradually being forced to deal with their materials after end of use, thanks to extended producer responsibility (EPR) regulations in the European Union and California.

Competition

Numerous ventures are throwing fortunes and bold claims behind creating a circular economy for polyester that treats tossed-out textiles as a commodity rather than a liability.

One Reju competitor, Circ, based in Danville, Virginia, shared plans on May 19 to build a $500 million polyester recycling plant in France, backed by the French government and the European Union. Its recycled fibers have appeared in clothes by Zara, Patagonia, H&M and Levi’s.

Ambercycle and Worn Again Technologies also break down mixed textiles, such as the polyester-cotton blends ubiquitous to T-shirts, into raw material for new clothes.

A family affair

One thing that sets Reju apart: family connections. Its parent company, Technip Energies, has been in the polyester business for nearly 70 years. Its technology appears in 40 percent of the world’s 370 steam crackers, the industrial plants cranking out ethylene, a building block of polyester. TEN Zimmer, which Technip bought in 2015, processes polyester and nylon, another recycling frontier for fashion. One thousand polyester plants around the world use its technology.

Technip Energies, which today has a 17,000-person workforce, was formed in 2021 as a spinoff of TechnipFMC, which was created in 2017 when Technip and FMC Technologies merged. Technip Energies’ origins reflect the evolution of the oil and gas industry. In 1958, Technip took shape under the French Petroleum Institute, or IFP, in Paris. FMC Technologies originated in 1883 as an insecticide maker. 

Reju, founded in 2023 and employing 75 workers so far, is part of Technip Energies’ attempts to transition to a lower-carbon future. Those attempts also include investments in blue hydrogen, carbon capture and storage and recycled and biobased chemicals.

Technip Energies’ 2021 sustainability report set net zero deadlines of 2030 for Scopes 1 and 2, and of 2050 for Scope 3. It is not working on those emissions goals with the Science Based Targets initiative (SBTi), however, which in 2022 put on hold its consideration of oil and gas companies.

In 2024, Technip Energies grew revenues by 14 percent, to 6.9 billion euros.

Regional hubs

Not surprisingly, Reju is targeting population centers rife with unwanted, post-consumer clothes.

In the United States, it is finalizing the details of a new plant while collaborating with Goodwill and Waste Management on a garment recycling pilot. In April, Waste Management launched a textile curbside collection service in Troutdale, Oregon, which will be replicated in other cities. Goodwill sorts the apparel and will provide what it can’t sell to Reju.

“Reju has built a credible network of feedstock suppliers, which is often a bigger problem to solve than the chemistry,” said Marcian Lee, an analyst with Lux Research, “so I think it has a good shot at success.”

The polyester trap

Love it or hate it, polyester is functional, durable and cheap. “You have a really good product, a highly efficient system, that’s one of the largest commodities in the world,” Frisk said. It will take a generation to scale a potential replacement. Until then, Frisk added, “we can either continue to put it into the ground or we can burn it.”

Unless of course, we recycle it. Reju breaks down polyester molecules into a monomer, before building it back up again. It uses IBM’s VolCat technology, co-developed with Under Armour while Frisk was its CEO. In 2019, IBM shared with Trellis that, just as VolCat — short for volatile catalyst — could handle polyester bottles coated with milk or other gunk, it can manage the dyes and pigments on polyester clothing.

By returning “to the origin of polyester,” Frisk said, Reju can design lower-shedding synthetic fibers, yarns and fabrics that harm nature less and will be easier to manage at end of use.

No matter the efficiency and scalability of their recycling approaches, Reju and its rivals enter an industry being built from scratch.

“We actually spend less time than you might think on the technology itself, and much more on building out the system, from both a feedstock perspective and the downstream perspective of getting it to actually work as a circular system,” Frisk said.

Reju’s intended new site, at the 1,900-acre Chemelot Industrial Park, is tucked into the southern tip of the Netherlands, between Belgium and Germany. Technip Energies’ board will make the final investment decision, which is expected to fall between $200 million and $300 million.

Laying down the pipes

“The textile industry is essentially catching a free ride on infrastructure that’s been built for other stuff,” Frisk said. “The oil pipes and the refineries and the cracking plants, all of that has been built for different things and we’re only a small part of it at the end,” he said.

“Our post-consumer textile waste stream has to be as robust as the oil pipeline that comes out of the oil ship and goes into a refinery, then ultimately into the polyester plant,” Frisk said. “So that has been the first priority, because if you don’t build that, you will not have anything to sell to the brands or the retailers.”

The next challenge will be convincing brands to pay more for the recycled alternative. “Until we have cost parity the use of recycled fibers is going to remain negligible, even with ties to a heavy polyester use brand,” said Liz Alessi, an apparel sustainability consultant in New York City.

[Join more than 5,000 professionals at Trellis Impact 25 — the center of gravity for doers and leaders focused on action and results, Oct. 28-30, San Jose.]

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Apple’s motion to dismiss a class-action suit over alleged greenwashing has attracted an unusual ally, the Environmental Defense Fund (EDF).

Apple was sued in late February over the carbon neutral label it uses to market several models of its Series 9 Apple Watch. The complaint, which represents seven buyers, alleges that the carbon credits Apple uses to help make that claim — from forest projects in Kenya and China — don’t actually reduce carbon emissions. Apple should have done a better job to make sure they were worthwhile, the plaintiffs said.

EDF’s amicus brief, filed May 15, defends the practices that Apple uses to make its claims, describing the company’s practices in the 25-page filing as “eminently reasonable and consistent with industry practice.” It’s the first time that EDF has weighed in on a corporate legal challenge of this nature, said Elizabeth Sturcken, EDF’s vice president of net-zero ambition and action.

“We’ve filed this amicus brief because Apple is an undeniable climate leader. Investors, employees and consumers are asking for companies to take climate action,” Sturcken said. “Companies need to be able to communicate this leadership. And more broadly, we need to see this leading climate action scale across the private sector, not get penalized.”

The environmental nonprofit acknowledges that concerns about the integrity of credits issued on the voluntary carbon market are warranted, but stricter methodologies by several industry groups are addressing those concerns. Besides, it argues, Apple pursues a “robust” strategy to cut its climate footprint before buying credits in the first place. 

Specifically, Apple reduces the emissions associated with manufacturing the Apple Watch models in question by approximately 75 percent through the use of recycled materials, fiber-based packaging and changes to its shipping methods that favor lower-carbon alternatives. It buys verified carbon credits to cover the remaining 25 percent.

A duty to double-check

One central complaint the plaintiffs make in the class action suit is that Apple didn’t do enough to guarantee that the projects behind the Apple Watches are producing meaningful carbon reductions. One of the initiatives is under investigation, and the suit argues that Apple should have independently verified the credits being issued.

The ability to buy high-quality carbon credits is important for corporations that have set net-zero goals, and finding in favor of the plaintiffs could set a precedent that would “inject significant uncertainty into, and possibly paralyze, the voluntary carbon market,” EDF argues in the brief. “Because few companies have the resources or expertise to engage in comprehensive (and duplicative) investigation of every offset project, plaintiffs’ legal theory would chill corporate action to mitigate climate change.”

In the brief’s conclusion, EDF notes: “Requiring companies to independently verify every single offset project would disincentivize them from using their resources to support precisely the sort of emission-reduction projects society needs to address the climate crisis.” 

Unusual ally

It’s relatively uncommon for environmental nonprofits to support corporations in a greenwashing case, said lawyer Daniel Cherrin, founder and president of North Coast Strategies, which specializes in reputation management.

“EDF isn’t defending Apple’s brand, they are defending a model of climate leadership rooted in transparency, decarbonization and credible use of offsets,” Cherrin said. “The voluntary carbon market isn’t perfect, but it’s working, and despite what many climate activists think, companies like Apple are using it to lead meaningful efforts to slow the impact of climate change.”

Apple declined to comment on the amicus brief, pointing Trellis to the statement it made when the lawsuit was filed that said it is proud of its carbon neutral products.

On May 19, the class action plaintiffs updated their complaint to demand a jury trial in the matter. A hearing on Apple’s motion to dismiss the lawsuit is scheduled for Aug. 27, in U.S. District Court in San Jose, California.

This article was updated to add a quote from EDF’s Elizabeth Sturcken.

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Fifteen months after retiring as Nike’s chief sustainability officer, Noel Kinder will be leading Lululemon’s “impact agenda.” The athleisure giant welcomed him as its new senior vice president of sustainability, less than a week after Esther Speck, vice president of global sustainability for a decade, revealed her planned departure.

Kinder brings 25 years of diverse experience at Nike. In 2018, he slipped into the chief sustainability officer sneakers of innovation legend Hannah Jones, the first in that role. Kinder was tasked with advancing her “moonshot” goal, set two years earlier, to double the company’s business while halving its environmental impact.

How does a company grow while shrinking its footprint on nature? That question echoes Lululemon’s tensions today. The Vancouver company’s sales more than doubled in recent years but so have emissions, steepening the climb toward its 2050 net zero target. Yet the brand has enthusiastically pursued alternatives to virgin fossil-fuel based polyester and nylon, investing in chemical recycling startups ZymoChem and Samsara Eco. Tariffs bring yet another wrinkle to the supply chain picture.

“He brings deep global experience in building and scaling sustainability strategies and goals that drive impact and results,” said Lululemon Chief Supply Chain Officer Ted Dagnese. “Noel’s leadership, global perspective and proven track record will be instrumental as we continue to advance our impact work to create a more circular and sustainable future.” 

In addition to achieving net zero emissions 15 years from now, Kinder is responsible for driving Lululemon toward a closer goal, by 2030, of 100 percent preferred content and end-of-life solutions. The company grew its preferred materials from 44 percent in 2022 to 57 percent one year later.

“Lululemon is a leader in innovation and deeply committed to advancing its sustainability and climate goals,” Kinder said in a May 16 press release. “I look forward to partnering with the talented teams across the company to continue this critical work and create meaningful, lasting change.” 

The Nike journey

While at Nike, Kinder expanded the Beaverton, Oregon, company’s sustainability headcount from 75 to 300; led its “Move to Zero” initiative for zero carbon and waste; and experimented with kelp “leather” and plant-based foam for shoes.

Near the end of his tenure, however, the brand’s sustainability star fell from grace. Sales were flat; emissions were rising. In a terse Zoom call in December 2023, the company axed its sustainable innovation team, according to ProPublica last year. Two months later, with the CSO role demoted to reporting to leaders two ranks below the CEO, Kinder announced his retirement, the report noted.

In the past year, Kinder teamed up with former Adidas President Eric Liedtke on a $125 million public-private partnership to create a site for footwear innovation in Portland’s historic Chinatown neighborhood. “To use the industry that I spent so much time in as the catalyst for that transformation was really icing on the cake,” he told Trellis in August.

In January, Kinder joined the board of Uncaged Innovations, a New York City startup creating a leather alternative from grains. Last year, he joined The Executive Council at o9 Solutions.

While at Nike, Kinder had served for several years as a member of the sustainability advisory council at the New York Stock Exchange and as a steering committee member of the Global Fashion Agenda.

Nike and Lululemon overlap

Nike and Lululemon have both experimented with “next-generation” materials in apparel and footwear. Nike was the apparel industry’s biggest buyer of recycled polyester during Kinder’s tenure, although he has recognized that preferable alternatives may emerge in the future.

The West Coast brands also have significant supply chains in Vietnam. Lululemon makes about 40 percent of its goods there, which brings new complications after the White House levied tariffs on that country.

Kinder moved his family of five to Ho Chi Minh City in 2013 when he became general manager of Nike in Vietnam. He managed a team of hundreds, integrating sustainability into the daily operations. Three years later, Kinder rose to vice president of sustainable manufacturing and sourcing, responsible for one million workers in factories across 42 nations. Two years after that, he became CSO.

Lululemon’s tagline, “Be all in,” parallels the Nike “Just do it” mantra. Watchdog groups, however, have criticized the brands’ embrace of outdoor fitness for clashing with their heavy use of fossil fuel-based synthetic apparel.

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