Pepsi-Cola has released its 2007-2008 sustainability report. The periodic accounting includes some impressive achievements. Among them: saving nearly five billion liters of water and nearly 500 million kilowatt hours of energy worldwide in 2007 over 2006, and committing more than $16 million to bringing safe water to developing countries.

The report also includes an impressive list of sustainability-related honors the company received during the reporting period, including selection to the Dow Jones Sustainability World and North American Indexes, whose members are chosen on a "best-in-class" basis.

Pepsico's report divides its sustainability efforts into three buckets: environmental, human ("our efforts to nourishing (sic) consumers with a range of products, from treats to healthy eats"), and talent ("developing our employees by creating a diverse and inclusive culture and making sure our company is an attractive destination for the world’s best people"). While somewhat non-standard, the categories make sense: essentially, they refer to that familiar duo, people and the planet.

What Pepsico calls human sustainability is probably the most fraught area for the company. Its flagship product is, to put it gently, less than completely healthy. A single can of Pepsi contains 41 grams of sugar, the equivalent of about seven teaspoons. By any measure that's a whole lot of sugar—and sugar has been implicated in ailments ranging from obesity to diabetes to tooth decay.

It's not only the amount of sugar in a can of soda pop that's problematic—there's also how often they're consumed. More than 15 million gallons of soda pop are consumed annually in the United States. That works out to at least one can a day for every man, woman and child. According to the U.S. Department of Agriculture, one-third of teenage boys consume three or more sodas daily.

Soft-drink companies have succeeded beyond their wildest expectations--and that's precisely the source of the problem. A backlash has resulted, with soft drinks banned in schools in California and Colorado, among other places.

Pepsico has adopted a multi-pronged response to this challenge. First, it is diversifying towards more healthy products. Its just-published report proclaims, "We’re launching new products that reflect consumer demand and address public health needs for great taste and greater benefits -- foods and beverages that make it more enjoyable to lead healthy lives."

The company is also re-formulating some existing products to make them more healthy by reducing "nutrients of concern including fat, saturated fat, sodium and added sugars; and … (a)dding whole grains, fiber, fruit, vegetables, key vitamins and minerals."

Finally—and this is an arguably dubious part of the equation—it's supporting programs that encourage people to be more active. There's compelling medical logic here: the more you exercise, the better your chances are of warding off obesity and other ailments. But there's a shadow message, too: stay active and it's okay to drink all that soda.

The fact is, Pepsico is in a difficult situation. Its sustainability performance is by and large exemplary. Yet like its competitors including Coca-Cola, the company also has a big cloud hanging over it. Its flagship product is spectacularly unhealthy. It can't dump the product. It can't even tiptoe away from it.

The company has responded by taking impressive action in other areas, presumably in the hope that these actions will cumulatively override, or at least get people to overlook, the problems associated with its eponymous soft drink. It's a reasonable strategy under the circumstances, and indeed perhaps the only plausible one.

As for Pepsico's decision to support active living, it's hard to squawk about programs that help people lead healthier lives. I can't find it in myself to applaud unreservedly, though. Imagine if tobacco companies went about encouraging people to get lung check-ups regularly. Would that merit unqualified applause? From one perspective, these programs aren't all that different.

So: enthusiastic applause for Pepsico's overall sustainability commitment. And for its "get active" programs: the sound of one hand clapping.