Pepsico's Water Claims in India Misleading and Deceptive

November 30, 2011
New Delhi, India: Pepsico is claiming that it has achieved "positive water balance" in India. Pepsico prominently states on its bottled water in India that Pepsico is "Giving Back MORE WATER Thank We Take."

Pepsico's claims are erroneous, misleading and deceptive. The company does not give back more water than it takes.

A detailed report was released today by the India Resource Center and the Community Resource Centre examining Pepsico's claims. Pepsico's claims of "positive water balance" do not hold water when subject to scrutiny.

Pepsico's claims fail for a number of reasons, some of which include:

1. Pepsico Has Severely Understated the Amount of Water it Uses in India. Pepsico's "positive water balance" claim is based on the company's assertion that it used just 5 billion liters of water in 2009. Our calculations, however, estimate that Pepsico is responsible for at least 50 times more water than it admits.

2. Pepsico's Water Balance Accounting is Illogical and Flawed. In its accounting for "positive water balance," Pepsico has declined to take responsibility for the water used in the supply chain of its products, such as potatoes grown through contract farming for Pepsico alone, or the sugar used in its products. At the same time, Pepsico liberally takes responsibility for saving water outside the supply chain, and in agriculture in particular. Close to 80% of the "positive water" that Pepsico claims to have saved do not come from water reductions in their supply chain or operations. Instead, Pepsico is paying others to save water, and using that to claim that Pepsico has saved water.

3. Water Issues are Local Issues - Pepsico Doesn't Get It. Having a "positive" relationship with water entails water stewardship at the local, watershed level. To our surprise, only 15% of the water conservation projects conducted by Pepsico are in the same watershed where Pepsico operates. Of all the water that Pepsico says it saved in 2009, only 2% came from "in-plant water recharge and harvesting."

4. One in Four Pepsico Plants Operating in Water-Stressed Areas in India. A primary measure of a company's water sustainability practices is to examine whether the company is operating in areas that are already water-stressed. Of the 34 operating Pepsico plants in 2009, 9 plants - over 25% - were located in areas that the government has classified as water stressed (semi-critical, over-exploited and critical) - hardly a picture of a "positive" water company.

In addition, there were serious concerns raised about the amount of wastewater generated by Pepsico, 2.56 billion liters alone in 2009. Pepsico's wastewater finds no mention in its audit and its accounting of "positive water balance."

"Pepsico's claims of positive water balance makes a mockery of the science and logic behind water stewardship. It also insults the Indian public by making claims that are erroneous, misleading and deceptive," said Nandlal Master of the Community Resource Centre from Varanasi who has campaigned against Pepsico plants in India.

"Pepsico's claims of positive water balance are nothing more than a public relations exercise to blunt the growing and real criticism of its water management practices in India and elsewhere," said Amit Srivastava of the India Resource Center.

"These are business and reputational risk management maneuvers and their claim of "positive water balance" aims to give Pepsico the right to use "positive" or additional water, much needed as it plans aggressive expansion in water-challenged India. All this while not doing anything substantial to conserve water themselves, such as in their factories and supply chain, or limiting the needless growth of water guzzling soft drinks or the unhealthy junk food they peddle. We refuse to accept such logic and practice."

The detailed report, "Deception with Purpose: Pepsico's Water Claims in India" is available at http://www.indiaresource.org/news/2011/pepsipositivewater.html

For more information, visit www.IndiaResource.org

ENDS