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The company that owns Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola and Mountain Dew is also trying to nudge farmers toward sustainable agriculture.

Jim Andrew, PepsiCo’s chief sustainability officer, was in Washington this week to discuss agricultural emissions and building resilient food supplies as part of AIM for Climate, a U.N.-endorsed agriculture initiative led by the United States and United Arab Emirates.

Pepsi is trying to introduce sustainable agricultural practices across all of its land use by 2030; Andrew is in charge of making the business case for it. He’s also involved in international negotiations over a treaty to reduce plastics.

This interview has been edited for length and clarity.

There are certain advantages that come with size in terms of sustainability and certain disadvantages. What are some of the practices that Pepsi can pursue, can invest in that maybe a smaller company can’t and the converse of that?

Our agricultural footprint is about 7 million acres globally, which makes us the 46th biggest state in America. Being able to bring regenerative practices to our entire footprint by 2030, that’s meaningful. It’s big enough to be able to show some industry leadership.

Of course, anything big also comes with challenges. We’re in 200 countries and territories. We’re broadly a pretty decentralized organization. I spend a lot of my time on what’s the business case around sustainability.

We need farmers to successfully farm and to keep farming. So the resilience of our supply chain is essential. And so how do I make clear to our business people the importance of supporting and bringing regenerative practices? Because without crops, we don’t have business.

Some of the folks I’ve talked to have said the shift on the corporate side in terms of sustainability and climate actions comes partly because companies are seeing a financial impact [from climate change] in their supply chains. Has PepsiCo experienced that?

You name it, we see it somewhere. We have countries where we lost a third of the potato crop in a given year. So that has a way of really getting people focused.

The good news is we have solutions for this. We know that regenerative farmers have more resilience, less risk, usually actually have higher yields once they get through the first few years. So again if I can get the business case working, I’m rolling the ball down the hill, instead of trying to push something up the hill.

You mentioned that with regenerative farming, it takes a couple of years to reap the financial benefits. What is the capital investment like?

Regenerative farming is really a set of practices. They’re different than many farmers around the world have been practicing for the last 50-60 years. Now, if you go back far enough, it’s the practices that they all used to use.

To really put those into place takes three things. There’s a financial challenge to it. There’s a technical challenge. You have to provide educational support for farmers because it’s risky. Change is risky and farmers are business people.

The third is social, cultural. I was talking to some farmers in Iowa not too long ago, and they said, ‘The biggest challenge I have is when I go to church each Sunday, and I know they’re talking about me and they’re saying, that person’s not a good farmer, because their fields are dirty.’ Because they’ve done no-till.

The financial piece depends on the crop trends and you have two more years, typically, for [farmers] to really start to see the full set of benefits. During that time, they’re making a transition; that’s often where we’ll work with partners around cost sharing.

Pepsi is working on building circularity in their packaging, whether it’s recyclable or compostable. Specifically, if it’s recyclable, do you think Pepsi should be responsible for retrieving that packaging?

I think the challenge with circularity is it’s a systems problem. If it were a single silo, single company or a single part of the industry, whatever, it would actually be quite easy to solve. The hardest problems are always end-to-end problems where you have to get a whole set of players to change.

All that being said, we directly impact a couple of parts as a chain. And we’re doing all that we can in that. We absolutely feel responsibility and we’re on record and have actively supported well-designed what’s called EPR, extended producer responsibility legislation.

I would buy a lot more recycled PET if I could get it at the quality that we need. There’s some countries in the world where it is against the law to use recycled PET. There’s other countries where it’s been safely done for 40 years. There’s a whole patchwork of things that go into it.

PepsiCo joined WWF’s Business Coalition for a Global Plastics Treaty. Do you support mandated global source reduction as part of that treaty?

What we would like to see is a well-designed policy framework. The specifics still need to be worked out. Our biggest request would be that it’s looked at as a system and all of the various elements that go into it are actually thought of and carefully considered. It’s the second- to third-order challenges that I think [of] often, with the law of unintended consequences, but we very much would support a global [well-designed framework].

Because it would set a level playing field for everyone, both countries as well as companies.

Just to clarify, you don’t mean a global source reduction?

Again, there’s so many things that have to be considered. My understanding is they’re still in the procedural discussions right now. So I think anything would be premature.

How does PepsiCo verify any offsets it’s using and verify regenerative practices on farms in its supply chain? How do you make sure that farmers are doing what they say they’re doing?

We don’t use offsets, with the exception of [Renewable Energy Certificates] RECs, which are well-established and broadly accepted. We don’t for a very specific reason, which is we think that the benefit should stay in the value chain.

We work very intensely to make sure that what we say happens is happening. That’s again with the partners who are on the ground. They all have responsibilities for measurement [and] verification. The farmers that are part of our programs make those agreements that they will provide that information, because ultimately, transparency plus accountability is what builds trust.

On top of that, I think that is a role for government. I think that government needs to provide the standards, the rules, if you will, for these things again. It will level up and make sure everybody’s doing the same thing. It will also take out a lot of the noise out of the system that exists today. A lot of farmers have said, ‘I’ve got multiple people coming at me. I just can’t deal with it.’ And so they step out entirely, which is not a good thing either.

Has PepsiCo ever cut off suppliers or farmers for failing to live up to what PepsiCo has set for its sustainability goals or its regenerative agriculture goals?

Yes, we have. We would much rather engage them because once you cut somebody off, you have no ability to have any influence whatsoever. So that is truly the last resort. I don’t believe in grains or potatoes because there, the farmers get it. I think in some of the other certain forestry crops, there’s been a few places where that’s happened.

You talked about there being a role for government. If the SEC finalizes its climate disclosure rule, how would that change how PepsiCo is already doing its accounting for regenerative agriculture and its sustainability practices and its emissions?

I would withhold until we actually see the final rules because there’s been so much back and forth.

We really would like to see consistency across different standard setters on rules because every dollar that we spend reporting is a dollar we don’t spend doing.

If Europe is going to require reporting, and if ISSB is going to require reporting, and if the SEC is going to require reporting, and they all require different reporting, and they’re all nominally reporting on the same thing, but they do it in different ways, that’s all money that is going into reporting and taking away from doing.

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