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 Sustainability, Diversity and Public Policy 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.
Public Policy Engagement and Issue Prioritization
PepsiCo’s business is affected by public policy at the local, state, national, regional and global levels. Our Public Policy and Government Affairs team works with senior management to set annual and long-term public policy priorities. We have a strong Global Code of Conduct and abide by local laws and regulations that govern interaction with public officials. Through public policy engagement, our goal is to promote a business environment that supports PepsiCo's ability to achieve sustainable growth in the years ahead.
Since 2015, we have witnessed the convergence of an international policy agenda with the adoption of the United Nations Sustainable Development Goals as well as the Paris Agreement on Climate Change. Governments, civil society and key business leaders have come together in pursuit of ambitious, long-term solutions to the world’s most significant environmental and social challenges. Companies continue to be called upon to develop creative, innovative solutions and products to better serve society’s needs. These historic agreements reflect future policy direction which will affect how we conduct business.
We therefore participate in public policy dialogues and share our expertise on key issues that support our business strategy and where we or others have identified that we can contribute ideas to solve policy issues. We aim to make constructive contributions that will lead to policies that help our business, our consumers and society thrive in a sustainable fashion. In 2020, our key issues included discriminatory taxation, trade, commodities, restrictions in the marketplace, food security, health & nutrition, 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 national and sub-national lobbying registration and reporting obligations. In the U.S., PepsiCo associates who engage in and support lobbying efforts at the U.S. federal and state levels undergo annual ethics training by expert outside counsel. PepsiCo discloses all lobbying activities at the federal, state, and local level, as required by law.
Political Contributions (PAC and corporate funds) – Governance, Criteria, Accountability
Political contributions by PepsiCo’s political action committee – the PepsiCo, Inc. 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 from eligible individuals to make political campaign contributions to U.S. federal and state candidates, political parties and other political committees. Management, supervisory and other eligible employees who are United States citizens or lawful permanent residents of the United States (i.e. green card holders) may voluntarily contribute to CCF. Except for administrative expenses, CCF is completely funded with voluntary contributions from eligible PepsiCo employees. Coercion of any employee to contribute to the CCF or to make any political contribution of any kind is unacceptable.
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 from the Corporate Senior Vice President Public Policy & Government Affairs before making political contributions of corporate funds.
- All contributions must be reviewed by 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 to influence, to reward or in exchange for an official act or for any other improper purpose.
- 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.
- 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 U.S. Supreme Court decision, corporations may now directly or through other groups make independent political expenditures supporting or opposing federal and state candidates. Corporations are still prohibited from contributing directly to federal candidates. Making contributions to independent political expenditure committees has not been a priority for PepsiCo’s political giving. However, if any such expenditures are made, they will be reported annually along with other corporate and political expenditures.
Since January 2021, PepsiCo suspended all political contributions while conducting a full review to ensure they align with our company’s values and our shared vision of the American democratic process going forward.
Finally, PepsiCo employees have the right to be engaged in the political process in their individual private capacity as they see fit, and make political contributions of their own time and money to the candidates or parties of their choice. Such private activities must not in any way suggest PepsiCo's involvement or support. 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.
PepsiCo’s Political Contributions Policy can be found here.
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 to candidates outside of the United States. Any exception to this policy would require a written recommendation by PepsiCo’s regional government affairs representative and approval by:
- The Corporate Senior Vice President of Public Policy & Government Affairs, and
- 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 nonprofit organizations and non-governmental organizations, including:
- American Beverage Association
- Business for Social Responsibility (BSR)
- Consumer Brands Association
- Consumer Goods Forum
- Food Industry Asia
- International Council of Beverage Associations
- International Food & Beverage Alliance
- Mexican Council of Consumer Goods Products (ConMexico)
- SNAC International
- UN Global Compact
- U.S. Council for International Business
- World Business Council for Sustainable Development
- World Economic Forum
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 primary focus the creation and promotion of model legislation.
Lobbying Practices Related to the Issue of 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 more than 40 percent by 2030 and to achieve net-zero emissions by 2040, one decade earlier than called for in the Paris Agreement. 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 Agreement, and becoming a founding member of the US Climate Leadership Council, among other actions.
We believe that our goals and advocacy are consistent with the Paris Climate Agreement, and we ask our trade associations to adopt a similar stance as and when they engage on the issue. PepsiCo regularly reviews the climate change positions taken by our trade associations, and we have publicly reported information on trade association positions as part of our annual CDP Climate Change Report.
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. 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.