PORTER AND KRAMER'S CSR VALUE CHAIN

1. Firm Infrastructure-
Financial reporting practices

The management of PepsiCo is responsible for the objectivity and integrity of our
consolidated financial statements. The Audit Committee of the Board of Directors
has engaged independent registered public accounting firm, KPMG LLP, to audit
our consolidated financial statements, and they have expressed an unqualified
opinion. They are committed to providing timely, accurate and understandable
information to investors.

Governance Practices

PepsiCo has been recognized for translating its policies on governance and ethics
into action. They have received the Best Governance, Risk and Compliance
Program at a Large-Cap Company at the New York Stock Exchange Governance
Services Governance, Risk & Compliance Leadership Awards. In 2013, PepsiCo
was recognized by Corporate Secretary magazine as having the Best Overall
Governance, Compliance and Ethics Program (Large Cap).
 2. HRM-
PepsiCos Goal: Create a safe, healthy, diverse and inclusive workplace
that reflects the global communities in which we operate.

Professional Training

PepsiCo gives its associates the chance to grow professionally through regular
training and career development tools to help them achieve their performance
objectives and help make the company a success. More than 6,200 associates
completed a training course in our Leadership College in 2013. PepsiCo
University offers the associates a number of ways to boost their professional
growth. The PepsiCo University Leadership Transition curriculum addresses
capability building to develop a global mindset, foster strategic thinking, develop
talent, and foster a collaborative and innovative culture.

There are five universities within PepsiCo University:

Finance University provides courses around investor relations, external

reporting, audit, risk management, control, tax, treasury, operations and supply
chain finance, sales finance, strategy, mergers and acquisitions, business
planning, systems and IT.

Global Procurement University is made up of a variety of e-learning courses

designed to build the knowledge and skills that will help enable procurement
professionals to increase functional capability, driving a globally consistent team
and organizational capability growth.

Customer Management University offers a robust and continuously updated

sales and customer management curriculum for U.S. sales professionals across
all divisions.

Global R&D University is a technical training program for all research and
development associates worldwide. It provides specialized instruction through
eight individual colleges: General R&D, Packaging, Nutrition, Food Safety and
Regulatory, Ingredient Application Science, Human Science and Research,
Experience Design, Product Development and Process Engineering.

HR University was launched in 2012 and today there are courses that cover
human resources topics from organization design and business consulting skills
to analytics and talent forecasting.

Organizational Health Survey

Every two years, PepsiCo conducts an Organizational Health Survey. They ask all
associates around the world for their feedback. Topics include benefits, working
conditions, compensation, career development, and diversity and inclusion
initiatives. They share the results of the survey with associates and use them to
develop plans for improvements throughout the company.

Recruiting a Diverse Workforce

PepsiCos U.S. on-campus recruiting program takes a particular interest in
bringing diverse talent to PepsiCo and has yielded outstanding results. In 2013,
63 percent of new hires resulting from college campus recruiting were of people
from diverse backgrounds.

PepsiCo is also a lead sponsor of the following diversity recruiting conferences:

The Consortium; Management Leadership for Tomorrow; Reaching Out MBA;
National Black MBA; Enactus and LIMEConnect. Each of these organizations
provides PepsiCo an excellent opportunity to recruit the best talent in each
graduating class.

A Legacy of Veteran Hiring

PepsiCos outstanding record of hiring U.S. military veterans earned us a top 25

ranking for the second consecutive year in the G.I. Jobs ranking of Top 100
Military Friendly Employers in 2013. PepsiCo is the only food and beverage
company in the top 50 companies in this prestigious ranking.

Occupational Health & Safety

One of PepsiCos top priorities is the safety, health and well-being of our
associates around the world. In 2013, all company-owned plants were assessed
against PepsiCos global Health and Safety program and, following completion of
the audit, each plant developed an improvement action plan. In addition, 65
plants are OHSAS 18001-certified by independent consultants, and 31 facilities in
the United States are part of the Occupational Safety and Health Administration
Voluntary Protection Program, the industry standard for health and safety.

3. Technology Development
Recycled Content

PepsiCo was the first and only major consumer packaged goods company to
incorporate post-consumer recycled content into its polyethylene terephthalate
(PET) plastic, beginning in 2004. Recycled PET comes from plastic that has
already been used for packaging, such as plastic bottles. Prior to being
transformed into a new plastic bottle, the plastic is sorted and cleaned, in
accordance with food safety standards. Since 2004, they have been
incorporating, on average, up to 10 percent post-consumer recycled PET in our
primary soft-drink containers in the United States.

In 2013, PepsiCo transitioned its Gatorade 15-count packages of 32-ounce

bottles from 100 percent corrugated cardboard to a combination tray/shrink film.
This conversion is now 100 percent complete at our 13 plants and has resulted in
nearly 39 million pounds of material reduction.

In France, they incorporated 5 million pounds of recycled PET, achieving up to 50

percent recycled content in individual product lines. This equates to 29.5 percent
of their total resin usage in 2013, a 30 percent increase from 2012.
In Germany, PepsiCo achieved their 2015 goal of utilizing 25 percent recycled
PET in approved bottles in 2013 by using 10 million pounds of recycled PET. This
is equal to a 250 percent increase as compared to 2012.

In Canada, 7UP bottles were the first 100 percent post-consumer content bottles
for a carbonated soft drink.

PepsiCo Brazils Porto Alegre facility is now utilizing 2-liter PET bottles with 100
percent rPET for Teem carbonated soft drinks. This will help to eliminate the use
of 334 tons of virgin PET per year. Throughout 2013, the initiative expanded to
include 40 percent recycled PET for Pepsi-Cola and 100 percent rPET for H2OH. In
2012, the Brazil business began using a 100 percent recycled shrink wrap at the
Curitiba plant. This initiative expanded to the Rio de Janeiro and Porto Alegre
plants in May 2013.

Pepsi Liter of Light Program

PepsiCo and the MyShelter Foundation partnered to build the Pepsi Liter of Light
Program, which brings eco-friendly light to communities in the Philippines living
without electricity by recycling packaging materials. The bottle lights make use
of everyday materials: PET, water, corrugated sheet metal and chlorine. Each
light, lasting up to 10 years, costs about $2 and takes 30 minutes to install. As of
April 2014, Pepsi Liter of Light has installed 190,000 bottle lights in 95,000
homes and donated 800 solar-powered night lamps and 33 street lamps, partly
through Pepsi donations and awareness initiatives.

4. Procurement
The SCoC includes 13 standards that address basic compliance with applicable
law, respect for human rights and prohibitions on all forms of forced or
compulsory labor to ensure that no child labor is used, and cooperation with
reasonable assessment processes requested by PepsiCo.

Along with assuring responsible sourcing, PepsiCo is committed to supporting

diverse suppliers.

In 2015, they spent an estimated $1.4 billion USD with suppliers that were
minority- or women-owned enterprises (MWBEs) in the United States. This
includes Tier 2 spend reported by non-diverse suppliers, which demonstrates
PepsiCo's strong commitment to expand engagement of diverse suppliers in its
supply chain.

PepsiCo continues to leverage third-party expertise to help meet environmental

sustainability goals. For instance, PepsiCo is a member of Bonsucro, a global
nonprofit dedicated to reducing the environmental and social impacts of sugar
cane production while recognizing the need for economic viability. PepsiCo is
working with Bonsucro and other relevant stakeholders to evaluate certification
standards that can help the company meet a goal of 100 percent sustainable
cane sugar by 2020.

In 2013, PepsiCo increased our sourcing of certified sustainable agricultural raw

materials from both Rainforest Alliance- and Fairtrade-certified sources.

In Chile, 100 percent of their potato growers and 100 percent of our seed
growers are certified to the Rainforest Alliance standard. Our partnership with
Unilever on Lipton includes sourcing 100 percent Rainforest Alliance-certified tea.
In addition, the bananas and pineapples used in our Naked juices also carry the
Rainforest Alliance seal.

5. Inbound Logistics
In the United States, PepsiCo owns and operates approximately 35,000
commercial fleet vehicles to bring raw materials to our plants and to deliver
products to customers and consumers. With more than 280 electric vehicles,
Frito-Lay North America owns one of the largest commercial fleets of all-electric
delivery trucks in the United States.

The company also has more than 200 compressed natural gas (CNG) trucks on
the road, representing approximately 20 percent of our over-the-road fleet. These
CNG trucks delivered productivity savings of more than $3 million in 2014, while
reducing direct emissions by more than 20 percent, as compared to conventional
diesel engines.

In fact, since 2010, PepsiCos fleet programs have delivered a combined

greenhouse gas reduction of more than 55,000 Metric tons, while reducing fuel
use by nearly 24 percent.

6. Operations
Water Stewardship

By embedding water conservation practices in their day-to-day operations

PepsiCo has been able to meet and exceed our conservation goals.

Through the application of ReCon Water and the dedicated commitment of our
associates, they were able to achieve the goal of improving water-use efficiency
by 20 percent per unit of production ahead of the 2015 target, from a 2006
baseline.
This improvement, in 2013 alone, corresponded to an estimated water-flow
savings of over 14 billion liters and cost savings of nearly $15 million.

Projects that drove significant savings ranged from monitoring and fixing leaks in
the beverage plants to recycling and reusing water. As an example, their Treated
Water Efficiency Tool, which allows beverage plants to optimize their water
treatment systems, has saved an estimated $640,000 in costs and reduced
water consumption by over 200,000 cubic meters per year in U.S. beverage
operations.

Energy Use

2013 was a stellar year for PepsiCo in the advancement of innovative alternative
energy solutions. Whether through landfill gas, solar power, or rice and oat hull
biomass boilers, they have made strides in utilizing alternative energy sources
that are helping reduce reliance on traditional energy sources.

A number of PepsiCo plants around the world are turning operational waste into
energy to power their facilities. In Kolkata, India, for example, their snacks plant
has dramatically increased the percentage of renewable energy it uses from 10
to 70 percent. This increase was achieved by using rice hulls (from a supplier) as
a renewable energy source to cook potato chips and utilizing the snack plants
waste heat as the energy source for on-site chillers, making it the first time these
specific innovative solutions have been used within PepsiCo.

Wastage Reduction

In 2013, nearly 93 percent of total waste generated by more than 280 company-
owned manufacturing facilities was put to beneficial use, such as recycling or
reuse; only 7.2 percent was disposed of through more traditional methods, such
as landfills.

In 2013, PepsiCos landfill elimination efforts enabled us to avoid $3 million in

landfill costs, while increasing revenue from recyclable and reusable materials
diverted from landfills. Globally, 22 manufacturing facilities achieved the goal of
zero waste sent to landfill and 48 have achieved near-zero waste sent to landfill.

In 2012, a new ReCon landfill-elimination initiative was launched in South

American, Mexican and Asian businesses to drive further reduction of waste sent
to landfill. Through the first two years of implementation, this initiative has
identified more than $3 million in additional cost savings.

7. Outbound Logistics
PepsiCo packaging-reduction initiatives conducted in 2013 eliminated nearly 110
million pounds of packaging material from the market and reduced our
packaging costs by more than $55 million across our global food and beverage
operations. Their Global Sustainable Packaging Policy outlines our goal to strive
for the smallest possible environmental footprint while still meeting the value,
cost and performance criteria expected from consumers and customers.
 8. Marketing & Sales
In 2010, PepsiCo voluntarily committed to display calorie count and key nutrients
on the packaging (where feasible to print and where permissible by local
regulations) for all products in key markets (Brazil, Canada, China, Mexico, India,
Russia, Saudi Arabia, Turkey, the United Kingdom, the United States).

As of March 2014, PepsiCo achieved over 96 percent compliance with this

commitment. In addition to this global commitment, PepsiCo has implemented
Food Drink Europes (FDE, formerly CIAA) Nutrition Labeling Scheme in all 27
countries in the European Union covered by the FDEs Nutrition Labeling Scheme.

Children are a special audience and, at PepsiCo, they take care to support
parents and caregivers in making appropriate decisions for their children.

As a result, PepsiCo has taken several important steps to ensure that they are
employing responsible marketing practices.

In 2012, PepsiCo strengthened its Responsible Advertising to Children Policy to

state that they will not buy advertising in programs with an audience profile of
greater than 35 percent children under the age of 12. This policy change was
fully implemented at the end of 2013.