PepsiCo’s August 2026 Climate Accounting Statement (see the Statement at the bottom of the link) provides an interesting example of how market-based approaches are evolving beyond their established role in Scope 2 accounting. The company has long used Energy Attribute Certificates (EACs, also known as RECs in North America, GOs in Europe or NZ-ECs in New Zealand) as part of its approach to renewable electricity. In 2025, PepsiCo sourced 96% of the electricity needs of its company-owned operations from renewable sources, including through renewable energy certificates.
Its 2030 goal is to achieve 100% renewable electricity in company-owned operations. For this goal, PepsiCo says progress is measured as the proportion of renewable electricity consumption against total electricity consumption in company-owned operations. This includes purchased electricity as well as self-generated electricity from solar, wind, renewable and non-renewable fuels. PepsiCo uses a diversified portfolio of solutions, including Power Purchase Agreements (PPAs) and EACs from existing renewable electricity generation.
These instruments are used to meet its renewable electricity goal in line with the GHG Protocol Scope 2 Guidance and RE100 Technical Criteria. This also feeds into PepsiCo’s market-based Scope 2 inventory. The company collects data on purchases of EACs and, where EACs do not cover its purchased electricity consumption, applies a residual emission factor, where available, to calculate Scope 2 emissions (find New Zealand’s residual emission factor here). EACs are included in its Scope 2 market-based emissions calculation. For Scope 1 market-based emissions calculated according to management criteria, PepsiCo uses data on purchases of EACs such as biomethane certificates.
Scope 3: a broader market-based approach
The more recent development is PepsiCo’s approach to Scope 3. For 2025, PepsiCo says it measures its Scope 3 market-based GHG emissions using management criteria, following guidance on market instruments currently under review by the GHG Protocol and the innovations in the Science Based Targets Initiative’s Corporate Net-Zero Standard (CNZS) V2.0. Rather than treating its market-based Scope 3 approach as simply an extension of Scope 2 certificate accounting, PepsiCo describes a broader concept of system contribution. The company reports its physical emissions separately from target progress that includes system contributions from actions and market instruments at activity-pool and sector levels. PepsiCo says it uses the market baseline to calculate target progress with system contribution because it believes this more accurately reflects the impact of its actions at activity-pool or sector levels.
This is an important distinction. For Scope 2, an EAC can provide the market-based instrument associated with renewable electricity consumption. For Scope 3, PepsiCo’s 2025 methodology points to a wider framework for recognising actions and market instruments that contribute to decarbonisation across the value chain. In other words, the role of market instruments in PepsiCo’s reporting is no longer limited to the electricity consumed in its own operations. Its 2025 reporting reflects the emerging discussion around how market-based mechanisms can be used to recognise contributions to decarbonisation beyond a company’s direct operational boundary. PepsiCo’s approach is also explicitly evolving. The company notes that the GHG Protocol’s Actions and Market Instruments (AMI) standard is still under development and that further SBTi guidance is expected on how companies calculate impact and communicate target implementation actions and associated claims. PepsiCo says its reporting approach may therefore change as the guidance develops.
Why this matters
PepsiCo’s reporting illustrates an important shift in the climate accounting conversation. EACs have an established role in market-based Scope 2 accounting: they can enable companies to substantiate renewable electricity claims against their electricity consumption, subject to the relevant accounting criteria. The emerging question is how market instruments and other decarbonisation actions can be credibly recognised in Scope 3, where emissions sit across complex global value chains and are often far removed from a company’s direct operations. PepsiCo’s 2025 Climate Accounting Statement offers one example of how a major company is navigating that transition – using established EAC mechanisms for Scope 2 while adopting a broader market-based framework for Scope 3 as international guidance continues to develop.
The evolution of the GHG Protocol and the SBTi guidance could have significant implications for how credible market instruments are used, accounted for and communicated across corporate value chains. Discover how to address your value chain emissions with BraveTrace NZ-ECs here. Have questions about what this means for your organisation? We’re just a phone call away and happy to discuss your specific needs.
* PepsiCo means PepsiCo, Inc. and its consolidated subsidiaries, collectively or as the context otherwise requires. PepsiCo serves customers and consumers in more than 200 countries and territories.