CEOs like Pepsi's Indra Nooyi nudge consumers to make sustainable choices

Article Source: Economic Times

Date of issue: March 20, 2012

Title of the article: CEOs like Pepsi's Indra Nooyi nudge consumers to make sustainable choices

Indra Nooyi, PepsiCo chairman and CEO, doesn't like obese Americans, nay obese consumers anywhere, burdening the public health system. She, therefore, began a nutrition movement within her company, and her consumers, for she knew the $65 billion food and beverage giant couldn't continue the way it always did. Her thinking was long term.

Writing for her recent corporate citizenship report, Nooyi says: "...sustainability of our business depends on investing in a healthier future for our consumers..." And yet, Wall Street is snapping at her heels, questioning her business model, and inducing her to raise aerated drinks to its early glory in the pantheon of PepsiCo's products. Why is a sustainability champion trying to move consumers towards better, healthier choices being pilloried thus?

John Elkington, co-founder of the London-based think-tank and consultancy SustainAbility, with a deep insight into consumption dynamics, thinks Nooyi may be slightly ahead of her times.

"It doesn't mean she is wrong," he says, adding that this is the only way for food companies like PepsiCo to go if they don't want to turn into pariahs like tobacco companies.

"Maybe the present structures or business platforms of the company are not ideally suited for the purpose," explains Elkington. PepsiCo officials are tight-lipped about the intense pressure that is coming to bear on their chairman in recent months. Vivek Bharati, executive director of PepsiCo India, is philosophic and speaks in the same vein as Elkington. "A company can be ahead of its consumers, with its consumers, or behind its consumers," he explains.

"Maybe it's not the right time." While the business world debates PepsiCo's predicament, fact is, Nooyi is beginning to be clubbed with a small clutch of global CEOs pushing the sustainability envelope relentlessly. She joins Paul Polman of Unilever, Andrew Witty of GlaxoSmithKline and Bill Ford Jr of Ford Motor in trying to address the access and consumption issue like never before (See graphic). It hasn't been easy for any of them.

New Corporate Responsibilities:

This set represent a new breed of CEOs trying to move the world towards a development paradigm that can last. They are actually the darlings of the new approach that Elkington propounds.

Elkington feels it's about time for businesses and CEOs to look beyond the current bouquet of corporate responsibility approaches- blended value, creating shared value, and even his own 'triple bottom line' mantra-to something more radical, more fundamental. All these approaches are good, but not game-changing enough, he says, adding that "systemic changes" are needed for the world to tide over these troubled times.

Elkington would like businesses to now raise their collective sights from technology and business models-important as they are-to triggering and fostering transformational social change. This would mean working on individual and collective mindsets, leading to "behavioural changes" among consumers and the larger community.

Elkington is certain that consumers are incapable of making intelligent consumption choices even if companies design, create and offer them greener, eco-friendly or healthier products, along with conventional ones. "We cannot rely only on consumers to make choices anymore," he says. Elkington was in Mumbai recently to guide Indian business leaders on future challenges at a CRY conclave on corporate responsibility.