PepsiCo has adopted strict corporate standards that govern our operations and ensure accountability for our actions. Such policies cover areas of Corporate Governance, Products, Planet, People and Public policy.
To demonstrate transparency, an ideal we firmly uphold, PepsiCo has adopted a variety of statements and policies that are publicly available below.
Selected policies are discussed in detail below.
Quality & Food Safety Programs
PepsiCo is dedicated to producing the safest, highest-quality and best-tasting beverages and foods in every part of the world. Developing and maintaining robust food safety programs is how we assure safety for every package, every day in every market. PepsiCo has detailed internal programs and procedures for food safety. Below is a summary of our policies, programs and actions designed to keep our products safe and meeting high quality standards.
PepsiCo Food Safety
PepsiCo has an excellent track record in delivering safe products - this work is guided by the PepsiCo Food Safety Policy. Our efforts are focused on building a sustainable food safety program and providing the framework to develop and sustain food safety of existing brands and new innovation. The scope covers the design, manufacture and distribution of beverage and food products. Our programs and procedures apply to all current and future divisions in PepsiCo.
PepsiCo quality professionals assess product compliance to PepsiCo's Quality Policy. This program is focused on processes and procedures supporting quality policies and prioritization of critical risk areas. Our quality agenda is led by quality professionals in various regions who oversee the following areas:
- Food Safety
- Innovation (R&D)
- Manufacturing Quality
- Co-Manufacturing Quality
- Supplier Quality
- Plant Quality
Global Policy on Bioengineered Food and Ingredients
PepsiCo is dedicated to producing the highest quality, great tasting food and beverage products in every part of the world, ensuring all products meet or exceed appropriate safety and quality standards. PepsiCo only uses ingredients that have been reviewed and approved by appropriate food authorities and governments for food safety and compatibility with the environment.
PepsiCo’s Food Safety and Regulatory Affairs Department and our suppliers work closely together to assure the safety, integrity, and authorized use of bioengineered ingredients and products. In addition, our scientific and regulatory specialists track emerging trends and current scientific reports on issues which are critical to maintaining our high standards in food safety and compliance.
PepsiCo acknowledges the importance for farmers and for society that utilizing bioengineered (genetically modified) crops can offer, such as resistance to weeds, pests and diseases, resistance to climatic stress, reducing the need for agronomic chemicals, and potential economic and productivity benefits in certain growing regions. Bioengineered crops that have been assessed and approved by governmental food authorities may become an increasingly valuable tool, both for sustainable food production and to ensure growing populations across the globe can be fed.
PepsiCo recognizes the need for high standards of safety concerning bioengineered ingredients and the importance of external stakeholders for engaging in dialogues on any concerns or feedback.
PepsiCo Statement on Use of Genetically Modified Ingredients in the U.S.
Providing consumers with safe products is PepsiCo's number one priority, and we understand that some consumers have questions about genetically modified food ingredients.
The use of genetically modified (GM) ingredients is safe for people and our planet, and also has a number of important benefits.
Many of the most influential regulatory agencies and organizations that study the safety of the food supply, including the U.S. Food & Drug Administration, the American Medical Association, the World Health Organization, Health Canada, the U.S. Department of Agriculture and the National Academy of Sciences, have found that genetically modified food ingredients are safe and there are no negative health effects associated with their use.
GM technology adds desirable traits from nature, without introducing anything unnatural or using chemicals, so that food is more plentiful.
It is important for our consumers to know that this technology is not new. In fact, it has been around for the past 20 years, and today, 70-80% of the foods we eat in the United States, both at home and away from home, contain ingredients that have been genetically modified.1 If the ingredient label on any food or beverage product contains corn or soy, it most likely contains genetically modified ingredients, as a very high percentage of those crops grown in the U.S. use GM technology. A high percentage of other ingredients in the U.S., such as sugar beets, are grown with the use of GM technology as well.
Many ingredients grown using GM technology require fewer pesticides, less water and keep production costs down. In fact, GM technology helps reduce the price of crops used for food, such as corn, soybeans and sugar beets by as much as 15-30%.2 In addition, one in eight people among the world's growing population of seven billion do not have enough to eat, and safe and effective methods of food production, like crops produced through GM technology, can help us feed the hungry and malnourished in developing nations around the world.
PepsiCo will continue to engage in an informative dialogue with our consumers so that they understand the safety, prevalence and benefits of GM ingredients and can make informed choices for themselves and their families.
For more information, we encourage you to visit www.factsaboutgmos.org.
The safety of our products is PepsiCo's top priority, and we abide by the regulatory guidelines everywhere we do business. The U.S. Food and Drug Administration (FDA) and other regulatory agencies around the world, including the European Food Safety Authority and Health Canada, consider our caramel coloring safe for use in foods and beverages. The FDA has been very clear and firm in this point.
While our products meet the strict FDA guidelines, when the regulatory requirements on 4-MEI changed in California, PepsiCo moved immediately to meet the new requirements and in order to maintain a harmonized supply chain globally committed to rolling out the changes across the rest of the U.S. and internationally. The work has been completed in California and several other U.S. states, and we are on track to complete the roll out by February 2014.
It is important to note that throughout this process there will be no change to the overall Pepsi-Cola product or to the great Pepsi taste consumers know and love.
PepsiCo's Responsible Research Statement
PepsiCo's research processes and those of our partners are confidential for competitive reasons. However, PepsiCo does not conduct or fund research - including research funded by PepsiCo but performed by third parties - that utilizes any human tissue or cell lines derived from embryos or fetuses.
PepsiCo's Statement on Animal Testing
PepsiCo does not conduct any animal tests and does not directly fund any animal tests on its beverages and foods. Where governmental agencies require animal tests to demonstrate ingredient safety, companies using those ingredients rely on third party testing.
PepsiCo has shared our concern regarding the ethical and humane treatment of animals with our suppliers and others in the industry. We encourage the use of alternative testing methods whenever and wherever possible and have financially supported research to develop these alternative methods.
PepsiCo's Cage-Free Egg Policy PepsiCo uses eggs in a number of our baked products including oatmeal and protein bars, biscuits and cookies. To ensure that our business practices support the more ethical and humane treatment of animals, we will expand PepsiCo's use of 100% cage-free eggs to North America by 2020 and the remainder of PepsiCo's global egg procurement by 2025.
PepsiCo Global Labeling Policy
PepsiCo is committed to helping consumers make informed choices through fact-based, simple and easy-to-understand information about how the key nutrients in each product fit in a balanced and healthy diet.
We follow nutrition labeling requirements in the countries where our products are sold, and in many places, we exceed these requirements. At a minimum, our labels will provide the following information:
- Our products will provide on the side or back of our packaging nutrition information on the amount of energy (as calories, kilocalories or kilojoules), protein, carbohydrate, total sugars, total fat, saturated fat and sodium per 100g/ml or per serving. Additionally, we will include nutrition information for nutrients for which a health or nutrition claim is made.
- Our products will include information on energy (as calories, kilocalories or kilojoules) per 100g/ml or per serving on front-of-pack labeling in all countries.
This policy is currently being rolled out and will be fully implemented, at the latest, by the end of 2016.
Sales and Advertising to Children
PepsiCo has taken several important steps to ensure we are employing responsible advertising practices. We joined the International Food & Beverage Alliance (IFBA), a Swiss-based NGO, comprising multinational food and beverage manufacturers, to adopt a worldwide voluntary commitment to advertise to children under the age of 12 only those products that meet specific nutrition criteria. PepsiCo also adopted a global company policy that is consistent with IFBA's policy. Initially, its implementation was focused on beverages worldwide and foods and snacks in certain markets. By the end of 2010, we had fully implemented our policy. In 2010, we announced strict science-based criteria that ensure only our most nutritious products meet the standard for advertising to children under the age of 12.
In 2012, we strengthened our Advertising to Children Policy to define advertising to children to mean that we will not buy advertising in programs with an audience profile greater than 35 percent of children under 12 years of age. Previously, our policy applied to audiences consisting of greater than 50 percent of children less than 12 years of age. This policy change is currently being rolled out and will be fully implemented by the end of 2013. Our policy continues to provide that PepsiCo will advertise only to children under 12 appropriate products that meet PepsiCo's strict, science-based nutrition criteria for advertising to children.
Again in 2014, we enhanced our Advertising to Children Policy to cover significantly more media, including outdoor, interactive games, cinema and product placement. The enhanced policy will also ensure that marketing techniques such as licensed characters, movie tie-ins and celebrities. This policy change is currently being rolled out and will be fully implemented, at the latest, by the end of 2016.
As verified by a third party, Accenture, in globally representative markets such as Russia, China, Colombia, Malaysia, Saudi Arabia, South Africa, Thailand and six countries in the EU, we achieved 99 percent compliance with our Advertising to Children Policy. Additionally, we achieved 100 percent compliance with our U.S. and Canada Advertising to Children pledges, as verified by the Children's Food & Beverage Advertising Initiative in the U.S. and Advertising Standards Canada.
Children's Food and Beverage Advertising Initiative Pledge of PepsiCo, Inc
PepsiCo, Inc. is proud to be one of the first companies to commit as a participant in the Children's Food and Beverage Advertising Initiative (CFBAI). As an industry leader in the discussions of children's marketing, PepsiCo believes children are a special audience, and we take particular care developing advertisements and evaluating programming that carry messages to children.
PepsiCo Global Policy on the Sale of Beverages to Schools
Our global policy for beverage sales in schools focuses on water, juice, milk and low-calorie beverages that support healthy nutrition habits among students. PepsiCo-owned bottling operations offer healthy hydration options for students and align with schools to eliminate full-calorie soft drinks in primary and secondary schools. We will work with our independent franchise bottlers, third-party vending companies and other PepsiCo beverage distributors, as well as schools and local authorities, to further align this policy beyond PepsiCo's direct operations. Because our policies alone cannot assure the actions of businesses outside of our operational control, it should be noted that our products may be sold in schools by independent third parties. However, we view our policy as an opportunity to engage our industry peers and local authorities in adopting similar policies. It is only through a collaborative, industry-wide effort that a full-scale implementation of such a policy can be achieved.
PepsiCo Beverages North America School Policy
Through our bottling partners and third-party distributors in the U.S., PepsiCo Beverages North America is committed to offering schools a portfolio of low-calorie and nutritious beverage choices. This wide variety of products includes, bottled waters, juices, sports drinks and no- or low-calorie carbonated soft drinks, juice-flavored drinks and iced teas. Schools decide which beverages are available, and where and when they are sold.
PepsiCo Food Service Policy for Snacks in K-12 Schools
PepsiCo Food Service (PFS) is committed to helping schools offer nutritious and lower-calorie snack choices to their students. By doing so, we can help parents and educators teach children healthy habits — in the calories they consume and the calories they burn. Although we do not decide which snacks are available on school campuses — schools do — and we do not sell snack products directly to schools — food distributors, vending companies and other independent businesses do — we believe we can play an important role in helping students have access to nutritious and lower-calorie snack choices while at school.
PepsiCo has a number of policies and programs to compliment the PepsiCo Global Supplier Code of Conduct, which clarifies our global expectations in the areas of business integrity, labor practices, associate health and safety, and environmental management. These standards apply to all stages of our upstream value chain and are meant to be complemented, as appropriate, by additional guidelines, specifications, and practical tools at the local or regional level, while respecting and complying with national laws and regulations.
The policies reference global standards and provide PepsiCo suppliers with our requirements. As discussed in more detail below, there are five environmental policies and commitments related to responsible sourcing.
These policies are interconnected, complementary and created to holistically address the potential issues and challenges in agriculture production and supply chain. All of our policies, unless otherwise noted, apply to our entire supply chain.
The policies outline our standards for establishing processes and performing assessments, as well as systems to help ensure compliance. However we recognize that sustainable and responsible sourcing is a journey. Non-conformance with our policies may occur, and PepsiCo has a responsibility to work to address them. We are committed to working with our suppliers through proactive steps, such as training, as well as to assist in implementing corrective action plans when needed. PepsiCo can have a long term positive impact by helping suppliers in this way. In a rare case where a supplier will not implement a corrective action plan, PepsiCo reserves the right to terminate the relationship.
We believe these policies can have a broader reach beyond PepsiCo. As we have seen with other industry-leading programs, such as the PepsiCo Sustainable Farming Initiative, suppliers realize benefits like increased yields and profits, decreased costs and improved environmental impact that can be replicated with other companies with whom they work.
Underpinning all of our policies, PepsiCo recognizes the importance of maintaining and promoting fundamental human rights in all of our operations and throughout our supply chain. Our strategies and policies work together to support the principles contained in the United Nation’s Universal Declaration of Human Rights and the International Labor Organization Fundamental Principles and Labor Standards.
We operate under programs and policies that:
- Provide fair and equitable wages, benefits and other conditions of employment in accordance with local laws
- Recognize employees’ right to freedom of association
- Provide humane and safe working conditions
- Prohibit forced or child labor
- Promote a workplace free of discrimination and harassment
We expect our suppliers and business partners to uphold these principles. Our Supplier Code of Conduct and Supplier Assurance Program are tools we use to minimize the risk of human rights abuses throughout our supply chain.
We are proud of the policies outlined here. However we recognize this is a journey. We will continue to expand or enhance these policies and commitments over time as science evolves, supply chains mature and tools, practices and processes improve.
PepsiCo Land Policy
Agriculture is an integral part of PepsiCo’s supply chain. PepsiCo has zero tolerance for illegal activities in our supply chain and for land displacements of any legitimate land tenure holders, which are contrary to the International Finance Corporation (IFC) Performance Standards.
As part of our land policy, we are committed to:
- Zero tolerance for land displacements of any peoples, in accordance with IFC Performance Standards
- Fair and legal negotiations for land acquisitions
- Use of appropriate grievance mechanisms, such as the PepsiCo Speak Up! Hotline, for future dispute resolutions.
To further demonstrate our support of responsible land rights practices PepsiCo intends to join the Committee on World Food Security (CFS).
PepsiCo Forestry Stewardship Policy
PepsiCo is committed to realizing zero deforestation in our company-owned and -operated activities and supply chain. PepsiCo has a responsibility to ensure that we and our suppliers operate in accordance with applicable legal requirements and practice responsible forestry stewardship.
PepsiCo will source from suppliers that strive to:
- Use sustainable forest management practices in forest they own, lease or manage to provide fiber, timber and other forest-based products.
- Implement sustainable agriculture practices that enable farmers to increase production on currently farmed land and minimize impacts on the surrounding area.
- Preserve biodiversity and cultural values and optimize the social, environmental and economic benefits of managed forests.
To further enhance existing programs, our Forestry Stewardship Policy establishes a zero deforestation goal through the various principles outlined in the policy below. This is consistent with our ongoing work with our partners and external organizations to affect positive change in the local communities where we live, work, and serve.
PepsiCo has long been committed to transparency on the issue of forestry and has participated in the CDP’s Forest Program since its inception. For more information, please go to:
Sustainable Agriculture Policy
The Sustainable Agriculture Policy sets PepsiCo’s standards of performance and expectations for raw materials that are sourced from agricultural production. It is designed to have global reach, be relevant for industry and agricultural crops, and be adaptable for every size farm in developing and mature markets.
The Policy complements our Performance with Purpose goals, particularly our Sustainable Sourcing goal, and outlines PepsiCo’s aspirations and principles in regards to sustainable agriculture as well as the broad environmental, economic, and social objectives within our agricultural supply chain.
Sustainable Packaging Policy
PepsiCo's Sustainable Packaging Policy outlines our commitment to strive for the smallest possible environmental footprint while still meeting the value, cost and performance criteria expected from consumers and customers. The Policy describes our aspirations to:
- Increase the use of recycled content or materials from renewable sources;
- Optimize packaging design to use the fewest materials necessary;
- Promote the use of materials that can be recycled (beverage containers, cereal cartons, etc.) or recovered;
- Minimize post-industrial waste;
- Avoid negative impacts to the environment; and
- Achieve a lower carbon footprint by ensuring efficient energy usage across the product lifecycle.
Human Right to Water
PepsiCo was among the first companies of our size to publicly recognize water as a basic human right. The UN defines the human right to water as all people’s right to safe, sufficient, acceptable, physically accessible and affordable water for personal and domestic use. In 2009, we established and published guidelines in support of water as a fundamental human right, in the context of the World Health Organization and the UN Joint Declaration on the Human Right to Water.
PepsiCo's Environmental Compliance, Health and Safety Policy
Environmental stewardship and protecting the health and safety of our people are at the core of our values. PepsiCo's Environmental Compliance, Health and Safety Policy was developed because we believe environmental incidents and occupational injuries and illnesses are preventable. The Policy applies to all our operations. We implement our EHS policy through the PepsiCo Global Environmental, Health and Safety Management System (GEHSMS) and have established eight principles such as regulatory compliance, performance measurement and continuous improvement. PepsiCo monitors company-owned operations and joint ventures where we hold a majority share.
Our Palm Oil Supply Chain
The top three countries from which PepsiCo sources palm oil are Indonesia, Malaysia and Mexico. We have three primary suppliers for this commodity: Cargill, Oleofinos and Aarhus. In 2015, PepsiCo purchased approximately 452,700 MT, which represents approximately 0.74% to the total global supply.
PepsiCo continues to seek the development of healthier oils, such as sunflower and corn oil, and transition from palm oil when possible. In 2009 we initially committed to the Roundtable on Sustainable Palm Oil (RSPO), and its processes and standards. We committed to exclusively purchase 100 percent certified sustainable palm oil for our products by 2015. To further bolster our commitment, we are working with our suppliers to achieve 100% traceability to the mill level by 2016. In turn the mills will provide confirmation from the farms from which they source the palm oil. In this way we will have a fuller understanding of our palm oil supply chain.
At the same time, we recognize that in some regions of the world, additional measures may be necessary. This is why we’ve made additional commitments, such as no further development of High Carbon Stock (HCS) Forests or High Conservation Value (HCV) Forests (including primary forests). Further research may identify additional HCS areas, and we will review this policy on a periodic basis to determine if other classifications should be added. The document below contains additional information on these commitments.
Our Cane Sugar Supply Chain
The main countries from which PepsiCo sources cane sugar are Brazil, Thailand, India. We have several primary suppliers for this commodity and PepsiCo purchased less than 0.5% of global supply of cane sugar in 2015.
PepsiCo is an active member of Bonsucro, a global nonprofit dedicated to reducing the environmental and social impacts of sugarcane production while recognizing the need for economic viability. Moving forward, PepsiCo will work with suppliers to meet a goal of sourcing 100% sustainable cane sugar by 2020. Efforts will begin in Brazil and Thailand. Recognizing that the sustainable cane sugar market is still developing, we will work with relevant stakeholders, including suppliers, to evaluate certification standards, such as Bonsucro and others, that are appropriate and applicable to our supply chain to achieve this goal.
We have also embedded detailed questions regarding land rights, which have been developed with third-party expertise, within the PepsiCo Sustainable Farming Initiative (SFI). The PepsiCo SFI program was launched to evaluate farmers with whom PepsiCo directly contracts. In this way PepsiCo will impact and educate its direct farmer-suppliers on this important issue, evaluating the results to ultimately ensure reflection of the PepsiCo policy.
Commitments on Palm Oil, Cane Sugar and Coconut Water
In 2014 we committed to implementing a third-party audit program on our sugar supply chain in Brazil and Thailand, on our palm oil supply chain in Mexico and on our coconut water supply chain in the Philippines. This program would be conducted with the participation of affected communities and be based on available and accepted standards to audit the social, environmental and human rights aspects of these supply chains, including impacts related to land rights.
Our aim with these audits has been to understand whether the standards set out in our land rights policy and other policies and commitments relating to human rights are being upheld. How we address the findings of these assessments varies in each instance but fall into two broad categories depending on the outcomes of the assessments:
- No significant issues found: we will continue to monitor suppliers through our existing programs such as the Sustainable Sourcing Program and Sustainable Farming Initiative and will continue to engage with our suppliers and external stakeholders to understand any new issues that may arise and require action.
- Issues found that are specific to PepsiCo and our value chain: in addition to the above, we will work with our value chain to understand the issues and develop an action plan to address these concerns. We will continue to engage with cross-industry bodies and other external stakeholders to better understand industry wide actions that can be taken to address systemic issues.
In addition, we have continued to engage with a wide range of stakeholders in these industries such as mills, producers, certification bodies/certification firms, grower/industry organizations, and other end users, government and civil society including Oxfam, about how to conduct improved assessments on land rights and other human rights issues in line with best practice. As a result of this engagement, we aim to ensure that future assessments of our supply chain in these industries:
- Are developed with input from affected stakeholders and conducted by independent organizations with expertise in the salient issues being assessed.
- Include either a publicly available version of the assessment or a summary of the context, process and findings in line with good practice.
- Focus on areas and issues where these risks are greatest.
Our progress to date (October 2016) and next steps in each of the countries mentioned above is set out in brief below.
- In Brazil, two sets of independent audits were conducted to establish specific human rights and land rights issues that might exist at our primary sugar suppliers in Brazil. A summary of the first round of audits, undertaken in 2014, was published in June 2015. No significant land rights or other human rights issues were found, but concerns were raised about the level of engagement with stakeholders taken so a second set of audits were conducted in late 2015. The audits included a wider range of suppliers and more engagement with local stakeholders than was taken in 2014 to address specific concerns raised by Oxfam. Again, no significant issues were found.
Following further engagement with Oxfam and other stakeholders subsequent to our second set of audits, we will promote engagement of an external organization with specific expertise in land rights to deliver an independent assessment of potential salient issues associated with sugar cane production in Brazil through a multi-stakeholder process in line with good practice
In addition we will continue to engage with Oxfam, the local community, our supplier in Recife and other companies in efforts to make progress in a land rights dispute that has been identified in the North East of the country.
- In Thailand, we are supporting an independent assessment of Thailand’s sugarcane producers, which includes a review of performance on human rights and land rights to identify potential systemic issues in the supply chain in Thailand. This assessment will be commissioned by Bonsucro, the global multi-stakeholder, non-profit industry change platform for sugarcane. We expect this assessment to be completed and made public by the end of March 2017. Following this, PepsiCo will support an action plan that aims to identify any significant issues.
In addition, a first of its kind summit was held with suppliers and mills in Thailand, led by PepsiCo through Bonsucro. The aim of this summit was to help better understand the challenges and solutions required to address sustainability challenges. The action plan implemented by PepsiCo resulted in the first-ever Bonsucro Certification in Thailand and an increase in engagement of suppliers to understand the path and implementation of sustainable production of sugarcane.
- In Mexico, Proforest, an organization with expertise in managing natural resources sustainably, will conduct a two tier assessment on potential land rights and other human rights issues in PepsiCo’s palm oil and sugarcane supply chain in Mexico. The first phase, which will focus on Chiapas State and Michoacán State, will be a desk-based study including consultation with external stakeholders to understand the issues, including the legal and policy framework, and evidence of existing conflicts. The second phase will be a follow up ‘on the ground’ and be specific to the issues found in phase one to better understand the concerns. We expect the first phase to be completed and published before the end of 2016 and the second phase in 2017. Following this, PepsiCo will support efforts by affected stakeholders to develop an action plan to address any significant issues identified in the second phase.
PepsiCo is a significant customer of palm oil from Mexico. We also supply palm oil from other global production areas including South East Asia. As stated in PepsiCo’s Palm Oil Commitments, we are working to deliver our goal of sourcing 100% physically certified palm oil by 2020 and have developed a Palm Oil Action Plan to report our actions on meeting these commitments. As an important next step in our commitment, we will engage with other stakeholders in an independent assessment in Indonesia of human rights and adherence to policies set out in our Forestry Stewardship Policy on High Conservation Value (HCV) and High Carbon Stock (HCS). This will be undertaken by an independent third party and is targeted to be published in 2017.
- As part of our original commitment an assessment of our coconut water supply chain in the Philippines was undertaken in partnership with Fairtrade USA. The assessment was conducted in and around facilities in Sorsogon and Candelaria with 143 farmers. Some issues related to environmental compliance were found, particularly the burning of household and farm waste. Working with our supplier, Fairtrade USA and the local government, training was held with the farmers, which participated in the assessment. In addition, any farmers that were not compliant to the issues noted above acknowledged that they understood the respective policy. Finally, while no evidence of land or human rights violations were identified, 12% of the farmers could not produce documentation showing their rights to the land they were farming. Fairtrade USA is supporting farmers on this systemic issue across the Philippines to ensure they secure and maintain proper land documentation. PepsiCo is willing to provide additional summary information regarding this assessment, as necessary.
PepsiCo will continue to strive to understand the sustainability challenges in our palm oil and cane sugar value chain and identify systemic issues that we can work with others to tackle. We can help drive change by undertaking independent assessments, engaging with reputable civil society organizations and credible multi-stakeholder organizations to develop action plans and measure our impact.
Global Code of Conduct
At PepsiCo, we believe acting ethically and responsibly is not only the right thing to do, but also the right thing to do for our business. Our Global Code of Conduct is our road map and compass for doing business the right way. Simply put, we believe that you do business the right way when you act ethically and consistently with our values, our Code, our policies and the law. Effective October 1, 2012, PepsiCo released an updated version of its Global Code of Conduct. The updated Code addresses regulatory changes and evolving risk areas, and provides specific guidance on acting ethically and legally while performing work for PepsiCo.
Global Human Rights and Salient Issues Statements
Our Global Human Rights Statement outlines our approach to respecting human rights in our direct operations and in our relationships with suppliers and other business partners throughout our value chain.
Our complementary Salient Human Rights Issues Statement identifies the human rights at risk of the most severe impact through our activities and business relationships.
These statements provide the framework for how we manage human rights at PepsiCo, including how we assess adverse human rights impacts in our value chain; integrate findings into our internal systems and processes; track the effectiveness of our actions and influence and; communicate with our external stakeholders.
Please see out latest GRI Report for additional information on our human rights programs and performance.
Global Human Rights Policy
PepsiCo's Human Rights Policy sets out the expectations we have of all our employees and joint venture employees over which PepsiCo has management control. It is guided by the Universal Declaration of Human Rights and its related international covenants. The principles underlying our Human Rights Policy are broadly communicated as part of the annual PepsiCo Global Code of Conduct training. We have ongoing management systems to ensure compliance, and our Speak Up! Hotline allows any employee to raise concerns without fear of retaliation.
PepsiCo Statement on Modern Slavery and Human Trafficking
This statement addresses the 2010 California Transparency in Supply Chains Act (SB65) and the 2015 UK Modern Slavery Act and sets out the steps we have taken to ensure that slavery and human trafficking are not taking place in our supply chain or in any part of our business. This statement constitutes our disclosure for the fiscal year ending December 31, 2016.
At PepsiCo, we recognize HIV/AIDS as a uniquely challenging global health issue that poses a significant threat to the sustainability of our business operations worldwide. We are committed to making a significant contribution to the fight against this devastating pandemic and to assisting associates and their family members affected by it. PepsiCo has established an internal task force on HIV/AIDS to guide our actions in addressing the issue in our businesses.
PepsiCo's Environmental Compliance, Health and Safety Policy was developed because we believe environmental incidents and occupational injuries and illnesses are preventable.
We implement our EHS policy through the PepsiCo Global Environmental, Health and Safety Management System (GEHSMS) and have established eight principles such as regulatory compliance, performance measurement and continuous improvement.
The health of democratic societies depends on citizens being responsibly engaged in the political process. PepsiCo’s political activities – including political giving and issue advocacy -- must always comply with applicable laws and PepsiCo’s Political Activities, Contributions & Issue Advocacy Policy & Guidelines below.
Governance & Oversight
PepsiCo’s Board of Directors recognizes that the use of Company resources in the political process is an important issue for shareholders. PepsiCo’s Board of Directors oversees the Company’s public policy processes and activities with the assistance of its Public Policy and Sustainability Committee. This includes the periodic review of policies and practices regarding political contributions, as well as the review of PepsiCo’s political contributions and expenditures of both corporate and political action committee funds.
PepsiCo’s Public Policy/Government Affairs team works with senior management to develop annual and long term public policy priorities. Such priorities include efforts to protect and advance our business and strategic goals, which are embodied as part of PepsiCo’s Performance with Purpose mission. Key issues include discriminatory taxation, trade, commodities, restrictions in the marketplace and environmental regulation.
Lobbying: Guidelines, Reporting and Expenses
PepsiCo monitors and abides by the changing laws and regulations governing lobbying activities, including the rules regarding state and federal lobbying registration and reporting obligations. PepsiCo associates who engage in and support lobbying efforts at the US federal and state level undergo annual ethics training by expert outside counsel. PepsiCo discloses all lobbying activities at the federal, state and local level, as required by law.
PepsiCo’s quarterly federal lobbying reports can be found here. In 2016, PepsiCo spent approximately $3,140,000 USD on federal lobbying-related activities in the United States. In support of transparency, when reporting its lobbying activities PepsiCo uses a broad definition of lobbying-related activities, provided in the Lobbying Disclosure Act*. In addition, any consultants PepsiCo retains also must file public disclosures regarding their activities on behalf of the company as required by law.
*Expenses related to federal lobbying activities as reported by PepsiCo per the Lobbying Disclosure Act include such expenses as: the cost of all employee time spent on meetings and other direct contacts with covered federal legislative and executive branch officials and time spent on activities that support these contacts, including meeting preparation time and the time spent developing materials used in lobbying meetings; time spent by employees who are not “lobbyists,” but who support the lobbying activities of others; a proportionate amount of each engaged employee’s direct compensation, benefits and an allocable part of overhead costs; payments by PepsiCo to retained lobbying firms and other consultants who support PepsiCo’s lobbying activities; costs incurred by PepsiCo to support lobbying activities, such as travel, meals, duplicating, etc.; and the portion of dues paid by PepsiCo to trade associations and other membership organizations attributable to the lobbying activities of those entities.
Political Contributions (PAC and corporate funds) – Governance, Criteria, Accountability
Political contributions by PepsiCo’s political action committee – the PepsiCo Concerned Citizens Fund (CCF) – and by the company, where permitted by law, provide an important opportunity for PepsiCo and its employees to participate in the democratic process. CCF receives voluntary employee contributions to from eligible individuals to make political campaign contributions to U.S. federal and state candidates, political parties and other political committees. Management and supervisory employees who are lawful citizens/residents of the United States may voluntarily contribute to CCF. Except for administrative expenses, CCF is completely funded with voluntary contributions from eligible PepsiCo employees.
All CCF and corporate contributions must be approved by the Contributions Executive Committee comprised of PepsiCo executives. All such political contributions are distributed in a non-partisan manner to U.S. candidates, political parties, other political committees and ballot measure committees. Moreover, all such contributions must be made and reported in accordance with applicable federal, state and local campaign finance laws.
PepsiCo has developed processes designed to further promote corporate accountability:
- PepsiCo employees must obtain approval of the Corporate Vice President Public Policy & Government Affairs before making political contributions of corporate funds.
- All contributions must be reviewed by the corporate law department and expert outside counsel to ensure legal compliance.
- All contributions must further reflect PepsiCo’s business or strategic interest and not those of its individual officers or directors.
- No contribution will be given in anticipation of, in recognition of, or in return for an official act.
- Employees will not be reimbursed directly or through compensation increases for personal political contributions or expenses.
- Details on all PepsiCo's political contributions will be posted on its website on an annual basis.
The following criteria will be used in connection with all contributions:
- The candidate's or entity's commitment to improving the business climate;
- The candidate's commitment to the long-term public policy goals of PepsiCo;
- The location of PepsiCo facilities or employees within the candidate's district or state; and
- The candidate's position on key committees where legislation of importance to PepsiCo is considered or the candidate's demonstrated leadership - or potential for leadership - within the U.S. Congress or a State Legislature
As a result of a 2010 US Supreme Court decision corporations may now make independent political expenditures such as sponsoring political ads in federal elections, but are still prohibited from contributing directly to federal candidates. PepsiCo has not made independent political expenditures and does not anticipate that the Court decision will impact how the company contributes or engages in the political process.
Finally, PepsiCo employees have the right to be engaged in the political process in their individual capacity as they see fit, and make political contributions of their own time and money to the candidates or parties of their choice. Of course, those efforts must not in any way suggest PepsiCo's support. Coercion of any employee to contribute to the CCF or to make any political contribution of any kind is unacceptable. In addition, an employee’s personal political affiliation or political activities shall not be the basis of adverse employment action so long as those affiliations and activities are both lawful and fully compliant with PepsiCo’s Code of Conduct.
Contribution Factors: PepsiCo seeks to support candidates who have responsible pro-business records and positions. In this way, PepsiCo seeks to improve the business climate, our quality of life and the society in which we live, enabling us to succeed as a company committed to integrity, innovation and value.
PepsiCo generally does not make contributions with corporate funds or CCF to candidates outside the United States. Any exception to this policy would require a written recommendation by PepsiCo’s regional government affairs representative and approval by (1) the Corporate Vice President of Public Policy & Government Affairs and (2) the corporate and regional law departments to ensure strict legal compliance. Any such contribution would be posted on the PepsiCo website with other political contributions.
PepsiCo is a member of numerous industry and trade groups and partners with various non-profit organizations and non-governmental organizations. PepsiCo provides a list of many of those key memberships and partnerships here.
PepsiCo works with these groups because they represent the food and beverage industry and the business community on issues that are critical to PepsiCo’s business and its stakeholders. Importantly, such organizations help develop consensus among varied interests.
PepsiCo does not always share or agree with all of the views of each of our peers or associations. PepsiCo representatives on the boards and committees of such groups ensure that PepsiCo’s position about policy or related activities is voiced. As such, there may be times when PepsiCo chooses not to fund certain initiatives sponsored by such organizations.
PepsiCo annually reviews the benefits and challenges from membership in our major trade associations. In addition, our trade associations are required to obtain specific consent from PepsiCo to use PepsiCo’s dues or similar payments for the funding of exceptional political expenditures beyond regular dues and business matters. PepsiCo specifically directs in writing each of its primary trade associations to use PepsiCo dues for general operating expenses and other routine activities, which includes lobbying executive and legislative bodies, and not to apply PepsiCo dues to any political event or election related activity without a specific approval from PepsiCo.
PepsiCo currently does not belong to any organizations which have as a major focus the creation and promotion of model legislation.
Statement on Trade Associations and Climate Change: Climate change is one of the most important issues of our time and requires immediate, coordinated action. Building on our track record of action on climate change, PepsiCo has a goal to reduce absolute greenhouse gas emissions across our value chain by at least 20% by 2030. This goal has been independently recognized by leading NGOs as a science-based target.
Industry action must be supported by climate policy that creates clear price signals and incentives to accelerate clean technology and needed innovation. PepsiCo does not question the science behind climate change, and we have a record of supporting climate policy through membership in the US Climate Action Partnership, signing the American Business Act on Climate Pledge, supporting the Paris Climate Accord, and becoming a founding member of the US Climate Leadership Council.
PepsiCo is a member of many trade associations and other business and civil society associations, and we do not always agree with all of the positions these associations may take on specific policy matters. On our web site we disclose our contributions to US trade associations and policy groups of which PepsiCo is a member and which lobby in the US at the state and federal level. The document may be downloaded here. PepsiCo is a member of the U.S. Chamber of Commerce, but we do not serve on the organization’s Board and we do not share its views on climate policy.
July 12, 2017