ESG Topics A-Z
Ethics and Integrity
Why it matters
To PepsiCo:
Acting ethically is an imperative for all parts of our business. We deeply value and protect the trust that regulators, business partners, consumers and other stakeholders place in us. By acting ethically, we aim to build the trust that is fundamental to protecting the reputation of our business and securing our long-term sucess.
To the World:
Ethics and integrity are the foundation of a prosperous economic system. Unethical practices add costs, delay services and lead to the misallocation of resources. These outcomes often have the most profound effects on the poorest and most vulnerable members of society.
Approach
Our Global Compliance & Ethics mission is to promote an ethical business culture that drives Company results, and to mitigate risk from potential Global Code of Conduct (Code) and legal violations by maintaining an effective compliance program. Compliance with our Code, as well as a commitment to acting with integrity are fundamental to doing business the right way.
Our Global Code of Conduct
We believe acting ethically and responsibly is not only the right thing to do, but also the right thing for our business. In today’s hyper-connected and transparent world, how we do things is just as important as what we do. PepsiCo’s Code is the foundation of our commitment to ethical excellence and provides the policies and guidelines that define how we do business the Right Way - The PepsiCo Way. The Code provides guidance on and reflects PepsiCo’s commitment to Act with Integrity:
- In our workplace
- In our marketplace
- In business and
- In our world
Operating in accordance with these principles creates sustainable growth, which builds trust with our employees, consumers, investors and the communities in which we operate. For more on our core cultural values, known as The PepsiCo Way, see Employee Engagement.
Our Code applies to all PepsiCo employees around the world (including employees of our consolidated subsidiaries), and members of the PepsiCo Board of Directors when they act in their capacity as directors. It is reviewed each year to reflect changes in law and is available on our internal and external websites. We acknowledge individuals who have demonstrated exceptional ethical conduct each year through peer-nominated ethical leadership awards.
Alleged violations of the Code are investigated in accordance with an incident management process and escalation policy. Confirmed violations result in corrective action or discipline, as appropriate, up to and including termination.
PepsiCo’s Global Compliance & Ethics Department (GC&E), led by the Global Chief Compliance & Ethics Officer, has primary responsibility for promoting, monitoring and enforcing compliance and ethics at PepsiCo, including the Code. GC&E accomplishes this through training designed to reinforce policies and processes that foster an ethical culture and protect against the risk of non-compliance. We place the ultimate responsibility for ethical excellence with each employee.
To learn more about our Code and to download it in 24 languages and dialects, please visit our Global Code of Conduct page.
Compliance Training and Awareness
We require associates at all levels of the organization to participate in annual Code training.
In addition to our annual training, the Code is reinforced throughout the year with local and global communications including internal articles, digital signage, portal updates, leadership messaging and ethics campaigns. The importance of acting with integrity is also communicated by leaders at all levels across the organization through written and oral communications.
Subject-matter compliance training on key risks is also conducted on a global and targeted basis.
Reporting Mechanisms
We encourage employees to Voice their Opinion Fearlessly to raise concerns about unethical business practices. In addition, all employees have an obligation to report what they suspect or believe to be a violation of the Code or applicable law. Employees can raise concerns and report Code violations through any of the following channels:
- Their supervisor, manager or next level manager
- A Human Resource manager
- The GC&E Department or the PepsiCo Law Department
- Speak Up hotline available by phone or by web
Speak Up Hotline
Our Speak Up hotline is operated by an independent third-party vendor to provide employees, consumers, business partners and community members with a 24/7 anonymous and confidential means of reporting alleged violations of our Code or applicable law. It is accessible anywhere in the world by phone or by web in languages spoken by PepsiCo employees. Speak Up is widely promoted at facilities and office locations, on Company internal and external websites, and in various training programs. When contacting the Speak Up hotline, an employee may remain anonymous where permitted by law.
To learn more, please see our Speak Up page.
Handling Reports
All reports of suspected violations received through Speak Up are reviewed by the GC&E team in accordance with an incident management process and our Global Code of Conduct Escalation Policy. Matters are either referred for handling or assigned to investigators within each Sector/Region. GC&E provides guidance and oversight to investigators to ensure investigations are conducted with the required consistency and rigor, and appropriate corrective actions are taken.
Non-Retaliation
PepsiCo is committed to protecting the rights of those individuals who report issues in good faith either through one of the reporting means described in our Code or to government authorities. Our company will not retaliate or permit retaliation against a person who in good faith:
- Reports a suspected violation of our Code, our policies or the law;
- Raises a compliance question or seeks advice about a particular business practice, decision or action; or
- Cooperates in an investigation of a potential Code violation.
Retaliation against an employee for reporting an issue in good faith is itself a violation of our Code.
Anticorruption
Our Commitment
Reducing the risk of corruption in our business operations is a top priority at PepsiCo. Internal controls, systems and processes are in place to reduce the risk of corruption and bribery and to ensure our associates understand the importance of conducting PepsiCo business in compliance with all laws and regulations of the countries in which we operate and with our Code.
Our Policy
At the core of our anticorruption program is PepsiCo’s Global Anti-Bribery Compliance Policy (Anti-Bribery Policy). It prohibits any payment or any offer, promise or authorization to give anything of value to any government official or other person or entity in the private sector with intent to improperly influence a decision to obtain an unfair business advantage.
Monitoring Our Policy
We mitigate corruption risk and monitor compliance with our Anti-Bribery Policy through systems, procedures and controls that include the following:
- Company-wide training initiatives on anti-bribery and anticorruption (ABAC)
- GC&E resources dedicated to continuous improvement of our Anti-Bribery Policy and ABAC Program
- The requirement for PepsiCo associates to obtain prior written consent from the GC&E Department or the Law Department, for any expense involving a government official
- Our widely communicated means of reporting suspected bribery and corruption to GC&E or through our Speak Up Reporting hotline (See “Reporting Mechanisms”)
- Investigation of all bribery and corruption allegations in connection with the Global Code of Conduct Escalation Policy and an incident management process
- Assessment of compliance and corruption risks through proactive integrated risk assessments conducted periodically with Corporate Audit, GC&E and Enterprise Risk Management
- Cross-functional effort to catalog, evaluate and enhance ABAC controls and procedures worldwide
- Periodic reviews of PepsiCo’s ABAC program by outside counsel to identify areas for potential enhancement
- Third party relationship management and due diligence as described below
Anticorruption Third Party Due Diligence
PepsiCo prohibits all forms of bribery and corruption in our operations, and we expect our third parties, including suppliers, service providers, agents and contractors to do the same. Many of our third parties are required through mandatory contract provisions to comply with our Supplier Code of Conduct, which prohibits corruption and bribery and references the Anti-Bribery Policy. PepsiCo’s Anti-Bribery Policy also addresses required anticorruption due diligence processes to be conducted on third parties. No PepsiCo associate may engage a third party until required anticorruption due diligence processes have been completed and it has successfully gone through PepsiCo’s risk-based Third Party Due Diligence (TPDD) program review.
Anticorruption Training
The importance we place on maintaining an effective anticorruption program is reflected in our annual online anti-bribery training which is completed by all salaried employees. The course, available in 21 languages, focuses on direct and third party dealings with government officials (including pre-approval requirements for expenditures relating to government officials) and our TPDD program. It also includes a means for employees to disclose contacts with government officials. PepsiCo also conducts live, interactive, anti-bribery training sessions across the company.
Sanctions Screening
PepsiCo seeks to conduct business in compliance with applicable trade sanctions. Trade sanctions restrict activities with targeted countries, governments, entities, individuals and industries and are imposed by various governments and agencies, such as the U.S. Treasury Department’s Office of Foreign Assets Control, the European Union, and the United Nations. PepsiCo employs a Global Sanctions Screening process to screen PepsiCo vendors and customers to mitigate sanctions risk. In 2021, PepsiCo screened over one million vendors and customers.
Progress and Challenges
As we work to embed ethics across our organization, we have made progress but faced challenges along the way.
Progress
- In 2021, our Code of Conduct was revised to reflect recent legislative developments.
- In 2022, PepsiCo was recognized as one of Ethisphere's World's Most Ethical Companies, one of only six companies to receive this honor 16 years in a row.
Challenges
- Recent M&A activity required significant efforts to integrate PepsiCo's Compliance & Ethics program into the newly acquired businesses. This challenge was met with thorough planning and execution to establish appropriate governance and oversight.
Progress
Compliance Training and Awareness
In 2021, over 78,000 employees worldwide completed an online Code training course available in 21 languages and dialects certifying compliance to the Code and over 133,000 primarily frontline employees in our plants, warehouses and sales facilities received in-person or online (e.g., through mobile devices) Code training or were provided Code learning materials.
In our 2021 training cycle, newly-hired salaried employees completed an online Code training course and employees in our Sales, Finance, Control and Legal functions completed a targeted online training course, educating employees on their responsibility to engage in ethical sales practices (e.g., avoiding trade loading). Additionally, managers completed an online training module focusing on managers’ responsibility for promoting an ethical culture, encouraging Speak Up, handling reports of misconduct and preventing retaliation.
Anticorruption Training
In 2021, over 78,000 salaried employees worldwide completed an online Anti-Bribery Policy training course and certified compliance with our Anti-Bribery Policy. In addition, as part of a two-year training cycle, more than 7,900 employees across the company participated in live anti-bribery training sessions led by PepsiCo lawyers and compliance professionals. This training is interactive and addresses the elements of the U.S. Foreign Corrupt Practices Act in addition to country-specific laws.
What's Next?
Looking ahead, we expect to undertake regular and continued evaluation of our GC&E Program with a goal of continuous improvement.
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Last Updated
December 20, 2022