WHEREAS: Racial equity audits engage companies in a process that may unlock value, uncover blind spots, and strengthen external relationships.
Leaders of major racial justice organizations across the United States have called for companies to conduct racial equity audits. The best practices these organizations identified for completing these audits are:
Select an independent person or firm with civil rights and racial justice expertise and adequate resources to complete the audit.Ensure the audit comprehensively examines how corporate policies, practices, and products can ameliorate or exacerbate racial inequalities. Audit processes should proactively identify and engage in outreach to a wide range of stakeholders such as civil rights organizations, employees, and customers impacted by racial inequity. Publish audit findings, recommendations, and progress reports with action plans with timelines to address identified issues.[1]At least 19 corporations have committed to or are in the process of completing racial equity audits.
PepsiCo has a long history of breaking barriers – including naming the first Black officer of a major U.S. multinational corporation in the 1960s. More recent admirable efforts include pledging more than $570 million to increase Black and Hispanic representation at PepsiCo, within its partnerships and supply chain. The company has stated that it is “committed to helping dismantle systemic barriers in Black and Hispanic American communities.”[2]
PepsiCo has also said diversity, equity, and inclusion “is an imperative to our long-term success and continues to be a competitive advantage at PepsiCo.”[3]
PepsiCo has also mis stepped at times, with allegations of discriminatory hiring practices,[4] advertising low-nutrition products more heavily in communities of color[5], and encouraging a hostile work environment.[6] This included its advertisement featuring a wealthy White woman giving a police officer a Pepsi during a time when Black Lives Matter protestors were working to bring attention to police brutality against Black Americans. This ad, called “tone-deaf” by Marketing Week, led to extensive social media protests against the PepsiCo brand.[7]
PepsiCo launched a Multicultural Business and Equity Development organization[9] in 2022, but its President retired within a year[10] and announcements around replacement leadership were not made.
We urge the company to conduct a racial equity audit to examine its total impact and to support the longevity and popularity of its brand via a thoroughly developed understanding of its role in supporting racial equity efforts.