Financial Times - January 21, 2008
PepsiCo adds $8m sparkle to clean water drive
PepsiCo will launch a partnership today with the Earth Institute at Columbia University and Matt Damon, the Hollywood actor, to bring clean water to communities in Africa, China, India and Brazil.
The announcement is being made on the eve of the World Economic Forum in Davos as an example of the event's theme of "collaborative innovation". It will see the US soft drinks and snacks group inject management expertise and $8m (€5.5m, £4.1m) in cash into two long- term water projects.
The Earth Institute will receive much of the funding, from PepsiCo's charitable foundation, while Mr Damon's H20 Africa charity will receive $2.5m from Pepsi Co's corporate budget. The funds will be used to improve sanitation, access to drinking water and crop yields through irrigation.
Jeffrey Sachs, the director of the Earth Institute, said the initiative reflected a new approach to corporate social responsibility, moving beyond the charitable donations of the past.
"We want real engagement. It is not about the money per se: it is about the partnership. The value of these corporate partnerships is the expertise and global reach and management skills that can come from this," he said.
"Pepsi is dwarfing all our efforts in the last two years [but] it's not just a cheque," said Mr Damon, whose charity had raised "a couple of million dollars" since its launch in 2006. "I'm hoping this is a beacon everyone else succumbs to by irresistible example."
PepsiCo's previous efforts under the banner of "performance with purpose" have been focused on internal efforts to conserve water, recycle and become more energy efficient; advice to farmers in villages near its plants; and attempts to use its distribution skills in the wider community.
Indra Nooyi, PepsiCo's chief executive officer, described the initiative as an experiment which it could "take to other companies and say here's an example of how we can deliver the Millennium Development Goals", the United Nations' targets for tackling poverty, hunger and the spread of HIV/Aids by 2015.
Ms Nooyi, a co-chair of this year's World Economic Forum, said PepsiCo had appointed a senior executive to monitor progress for both projects over the next three years. "We've given [Prof Sachs] three years but we're going to sit on him the whole time."
Prof Sachs, interviewed on a visit to Timbuktu, said the involvement of PepsiCo, a big consumer of water, was an example of companies "playing to their strengths".
The Earth Institute's Millennium Villages project will also address issues such as roads, schooling and power, the lack of which had undermined other companies' isolated initiatives in the past, he said. "[PepsiCo] don't have to do any of that."
Ms Nooyi said she had been encouraged to pursue the strategy by her 23-year-old and 15-year-old children.
"This is a movement the likes of which we've never seen," she said, adding that the company's recruiters had found that graduates were becoming more alert to companies' social policies and behaviour.
"It's offensive and defensive and it's the right thing to do," she said.
Mr Damon, whose charity helps provide wells on farms and sanitation in countries from Mali to Uganda, said the support of a large corporate partner meant that "suddenly the whole morass looks like an equation that has a solution".
The involvement of the film star would help spread the message about the urgency of providing clean supplies to the estimated 1.1bn people currently without access to safe drinking water, Ms Nooyi said.
"If Indra Nooyi says this is important it means squat, but if Matt Damon [endorses it] all of a sudden it reaches a much larger group of people in a more cost-effective way," she said.
Mr Damon agreed, saying: "You get a certain amount of celebrity capital and you can choose to spend it however you want.
"You can sell shampoo or try and enrich yourself. You can do a lot of things, but this is a great way to spend that capital."