Why big business is putting society and sustainability first
By Sarah Stone, September 2018
PepsiCo’s £2.5 billion deal to buy carbonated drinks company SodaStream is a clear signal that social value and sustainability are now key priorities for big business.
Announcing the deal last month, PepsiCo chairman and chief executive Indra Nooyi said the tie-up offered consumers the ability to make great-tasting beverages while reducing the amount of waste generated.
“That focus is well-aligned with Performance with Purpose, our philosophy of making more nutritious products while limiting our environmental footprint,” Nooyi said. “Together, we can advance our shared vision of a healthier, more-sustainable planet.”
Social value is all about conducting business in a way that creates social, economic and environmental benefits – rather than just focusing on profits and returns for shareholders.
Governments around the world – including Scotland and the UK – are now driving the social value and community benefit agendas through their own procurement policies.
And in an age where sugar and plastic are two of the most pressing social and environmental issues – buying SodaStream is a ‘no-brainer’ for PepsiCo.
The Israel-based company allows consumers to turn tap water into their own fizzy drinks in seconds, cutting both their sugar intake and use of plastic bottles.
SodaStream chief executive Daniel Birnbaum has also championed social value as the route to creating long-term economic and financial value. For example, the company supports initiatives around the world to make sure people have access to clean drinking water. And Israelis, Palestinians and Bedouins work side by side at SodaStream’s main manufacturing facility in Lehavim, southern Israel, which is known as the “Island of Peace.”
The fact that SodaStream’s stock price has mushroomed more than ten-fold from $11.40 in August 2015 to more than $140 per share, suggests Birnbaum is doing something right.
PepsiCo is the latest in a growing band of big corporates to see social value and sustainability as the key to continued growth. Think Coca-Cola’s acquisition of UK fruit smoothie maker Innocent Drinks; Google’s $2.5 billion investment in renewable energy projects and BP’s deal this summer to acquire Chargemaster, the UK’s largest electric vehicle charging company.