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Responding department: Public Policy (also with input from Sustainability, Legal, External Reporting, Procurement)

Stock exchange symbol: (PEP:US)

Does your company have a publicly available commitment to respect human rights?

We have a stand-alone Human Rights Policy, which is also reflected in our employee and supplier Codes of Conduct as well as other relevant policies and commitments. PepsiCo’s commitment to human rights is guided by the United Nation’s (UN) Universal Declaration of Human Rights and related international covenants. While governments are responsible for protecting human rights through legal frameworks, businesses have a corporate responsibility to respect all human rights. As a signatory to the UN Global Compact we are committed to aligning our policies, operations and strategies with its universally accepted principles, including those for human rights and labor standards. Our stand alone Human Rights Policy can be found at: [link]. Our Supplier Code of Conduct is available at: [link]. Our Global Code of Conduct for employees is available at: [link].

How are human rights governed in your company?

The Nominating and Corporate Governance Committee of PepsiCo’s Board of Directors is responsible for annually reviewing the Corporation’s key public policy issues, including sustainability initiatives, such as human rights and its engagement in the public policy process. The Sustainability Task Force, comprised of Executive level colleagues, has ongoing responsibility for our overall sustainability strategy. PepsiCo’s Human Rights Operating Council (HROC), chaired by our Global Senior Vice President of Human Resources Law and Chief Human Rights Officer, is made up of representatives from the relevant corporate and regional functions (Human Resources, Public Policy, Legal, Global Procurement, Operations, Global Risk Management, Research and Development, Sales, Global Compliance and Ethics and Communications). The HROC reports to the Sustainability Task Force. As defined in the HROC charter, its role is to:

  • Define the strategy and framework for the assessment, implementation and communication of our management of human rights issues;
  • Regularly review PepsiCo’s human rights policies to ensure compliance with legal and regulatory requirements, our external commitments and our internal human rights management strategy;
  • Stay informed of legislative and regulatory developments, stakeholder expectations, the competitive landscape and emerging trends related to human rights issues;
  • Prioritize initiatives and activities and identify internal and external partnerships to address human rights risks and opportunities;
  • Monitor PepsiCo’s progress with respect to human rights management on an ongoing basis; and
  • Submit periodic reports, recommendations and/or action plans, as appropriate, to the Sustainability Task Force for review and approval.

How are human rights managed within your company?

The Human Rights Operating Council partners with PepsiCo’s Enterprise Risk Team to incorporate human rights due diligence questions in our Global Risk Tool to be answered at the country level. We do this annually to raise awareness of human rights and identify where additional policies, training or mitigation efforts are needed. The underlying principles of our Human Rights Workplace Policy are broadly communicated to our staff in our annual Code training program, which reaches more than 65,200 salaried employees worldwide. Employees are required to comply with these principles, and to report suspected human rights violations within our operations or supply chain if they arise, for example through the confidential and anonymous Speak Up Hotline (see response to question 7 for more information).

Our Sustainable Supply Chain Council, formed in 2014, is responsible for monitoring compliance with our Supplier Code of Conduct. Respect for Human Rights is one of the key pillars of the Code, alongside health and safety, environmental compliance, business integrity and food quality & safety. We work directly with suppliers to improve their understanding and ability to comply with our Supplier Code of Conduct through the PepsiCo Global Procurement Supplier Social Capability Management Program. Our process addresses Accountability, Engagement, Risk Assessment and Mitigation. We also communicate our expectation of “Doing Business the Right Way” through our conduct enhanced Supplier Code of Conduct training with key agricultural suppliers and other third parties. That training is now publicly available to our suppliers in six languages, through an e-learning module on [link].

Many social risks for food and drink companies lie in agriculture, which is why we are also helping farmers in our supply chain manage human rights issues through our Sustainable Farming Initiative. The SFI was developed as a standard to guide our suppliers in sustainable farming practices and provide them with resources, training and support to meet our standards across social, economic and environmental pillars. The social indicators include employment conditions, employment practices and health, wellness and safety. We have made the guidelines easy to use, and are working with other companies to cross-honor each other’s standards.

What is the company’s approach to the engagement of stakeholders (including workers, and local communities impacted by the company’s activities), on human rights issues?

We strive to have an open and constructive dialogue with all stakeholders who are interested in human rights, including NGOs, governments and rights holders in the communities where we and our suppliers operate. We proactively reach out to organizations that we believe can help us improve our ability to respect human rights, as well as those that might have their rights affected by our business and its supply chain. We also listen to a wide range of organizations that approach us on the issue including Socially Responsible Investors and NGOs. PepsiCo provides information on human rights issues and our policies as well as training to relevant employees. We support the freedom of association and have multiple collective bargaining agreements around the globe. We are members of several cross industry and cross organizational groups that are either directly focused on improving the management of human rights by businesses, including AIM Progress and the BSR Working Group on Human Rights or for which human rights is a key component such as the Sustainable Agriculture Initiative (SAI) Platform.

Priority human rights issues: What are some of the priority human rights issues for your company?

The company selected the following from a check list:

  • Health (including environmental health, workplace health & safety)  
  • Workplace  diversity / non-discrimination
  • Forced labour and human trafficking (including in supply chains)
  • Sexual harassment
  • Displacement and  community relocation  
  • Access to water
  • Housing
  • Freedom of association and trade union rights  
  • Freedom of expression and/or right to  privacy / digital rights  
  • Transparency in payments to governments / responsible tax practices  
  • Product Misuse
  • Women
  • Racial and ethnic  minorities
  • Children (including child  labour)
  • Indigenous peoples
  • Migrant workers

    

Actions on displacement and community relocation

In order to help protect the rights of indigenous peoples in our supply chain, we introduced a specific land policy in 2014 (http://www.pepsico.com/docs/album/policies-doc/pwp/pepsico_land_policy.p...).

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.

We have also joined the Committee on World Food Security (CFS). To support the implementation of our policy, we committed to implementing a third-party audit program, based on available and accepted standards, of the social, environmental and human rights aspects of our top sugar sourcing country, Brazil, by the end of 2014. We will be sharing what we found later in 2015. We are also committed to implementing similar audit programs for our sugar supply chain in Thailand, our palm oil supply chain in Mexico and our coconut water supply chain in the Philippines by the end of 2016, or sooner if deemed possible. The assessments will include impacts related to land rights and will be conducted with the participation of affected communities.

How are human rights commitments and information about how the company addresses its human rights impacts communicated, internally and externally?

We communicate our commitments and position on Human Rights to everyone through:

  • Our Corporate Website: [link]
  • Our Corporate Sustainability Report and GRI Report: [link]
  • To investors and other interested stakeholders such as NGOs through:
  • The United Nations Global Compact: [link]
  • Participation in multi-stakeholder groups such as Ceres and the BSR Working Group on Human Rights
  • One to one meetings

To employees through:

  • Code of Conduct training (reaching 65,200 staff in 2013) and ongoing internal communications

To suppliers through:

  • Our contracts with suppliers that include our Supplier Code of Conduct
  • Supplier Code of Conduct training
  • Supplier Capability Management Program
  • Sustainable Farming Initiative

What provisions does your company have in place to ensure that grievances from workers and affected communities or individuals are heard, and can you provide examples of remedies provided?

All employees are encouraged to ask questions, raise issues and seek guidance when a course of action is unclear or they have concerns. Our employees have several avenues for reporting issues and seeking advice, including their manager, Human Resources, the PepsiCo Law Department, the Global Compliance and Ethics Department, and the Speak Up hotline.

Our Speak Up ethics hotline is operated by an independent third-party vendor to provide employees, consumers, business partners, suppliers and other third parties including local communities and individuals with a 24/7 anonymous and confidential means of seeking guidance and reporting potential violations of our Values, our Code of Conduct, our policies or applicable law, including human rights concerns. Reports can be  made via dedicated toll-free phone lines in 61 countries and 38 languages or by using the Speak Up Webline available in 25 languages. Speak Up is widely promoted at PepsiCo through on-site posters at all facilities and office locations, on company internal and external websites, and in our annual online Code training, which is completed by 65,200 employees annually. It is also featured in our frontline training materials, new-hire on-boarding training program, internal newsletter articles and locally developed Values and Code of Conduct awareness programs. It is communicated to suppliers through our Supplier Code of Conduct training and Supplier Capability Management Program, as well as through our external website. PepsiCo reports our Speak Up usage on our public website,   including the number of Speak Up reports received, the report source (phone or Web) and information concerning the disposition of closed Speak Up matters. PepsiCo does not publicly disclose details relating to individual   specific matters, calls or complaints or confirmed violations of the Code of Conduct.

Internally, non-identifiable examples of real violations and enforcement actions are incorporated into our annual Code training for learning purposes. Global Compliance and Ethics reviews all incoming Speak Up matters and assigns matters in accordance with an incident management process and our Escalation Policy. Investigators of Speak Up reports may include the   Global Compliance and Ethics team, Sector/Region compliance partners in Human Resources, Law, Security and Audit and as needed by outside counsel, external investigators and subject matter experts. Global Compliance and Ethics works closely with, and provides oversight to assigned investigators within each Sector/Region to foster consistency of the investigative process, discipline and appropriate corrective actions. Our policies protect our employees who raise concerns and report suspected misconduct so that they may do so without fear of retaliation.

Our Global Code of Conduct prohibits retaliation against an individual who in good faith:

  • Reports what he or she believes is a violation of our Values, our Code, our policies or the law
  • Raises a compliance question or seeks advice about a particular  business practice, decision or action
  • Cooperates in an investigation of a potential Code  violation

Which external and collaborative human rights initiatives does your company participate in, and what is the nature of your involvement?

  • AIM Progress – active member
  • Sedex – active member
  • UN Global Compact – advanced COP contributor and active member
  • BSR Working Group on Human Rights – active member
  • Ceres – active member
  • SHIFT – active member
  • Sustainable Agriculture Initiative (SAI) Platform – active member
  • Consumer Goods Forum – active member
  • UN Global Compact CEO Water Mandate – active member
  • Unitarian Universalist Service Committee – working with them to develop and pilot a Human Right to Water Impact Assessment

Which are the key one, two or three elements of your approach to human rights that been developed or amended since June 2011? Please indicate if these actions were in response to the UN Guiding Principles.

We seek to continually improve our capability to respect human rights in our own operations and supply chain in line with our policies and commitments, which are based on the UN Guiding Principles. We have made significant improvements to the way in which we approach human rights since 2011 and we will continue to improve as our knowledge, capability and expertise grows. The most significant steps we have taken since June 2011 are:

  • The establishment of a Human Rights Operation Council (2012) to provide specific and strengthened Governance and management on human rights issues;
  • Launched a publically available eLearning course (2013) to communicate to suppliers what Doing Business the Right Way, which is at the core of our Supplier Code of Conduct, means in practice;
  • Updated our Supplier Code of Conduct in 2013 and launch of Sustainable Farming Initiative (2013) which provides a framework to engage growers in our supply chain on human rights issues; and
  • The creation of our Sustainable Supply Chain Council (2014) to oversee the systematic management of human rights in our supply chain through a risk management/audit/remediation process.

What are some of the obstacles and challenges that your company encounters in implementing its human rights commitments?

Like other multinational companies with global, complex supply chains, maintaining respect for human rights is challenging. It requires significant financial and people resource, a high level of expertise and the ability to respond quickly to changing circumstances. We have been improving our capability to deliver these things and continue to do so. In this context, the ability to work with other organizations (who may have conflicting views and needs), share resources such as through mutual recognition of risk assessment and supplier audits, and to provide and listen to all the issues is crucial. So is the ability to generate a “critical mass” of customers to engage with suppliers, governments and others on creating a holistic approach to helping rights holders. In short, moves that promote collaboration between any combination of companies, civil society and government are welcome and helpful to driving this agenda. We are less convinced that encouraging a competitive element between companies, or simplifying complex issues to criticize businesses, will help companies that acknowledge the challenges and want to be part of the solution.