PepsiCo has not employed a third-party auditor to assess and further develop its racial equity strategy, claiming that the requested audit is unnecessary in part because of its work with Management Leadership for Tomorrow’s Racial Equity Certification Program. While this is valuable work, it is not a substitute for a racial equity audit. Recognizing this, more than 196 million shares supported a similar racial equity audit proposal in 2024.1

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 have called for companies to conduct racial equity audits. The best practices these organizations identified for completing these audits are:

1) Select an independent person or firm with civil rights and racial justice expertise and adequate resources to complete the audit.
2) 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.
3) Publish audit findings, recommendations, and progress reports with action plans with timelines to address identified issues.2

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 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.”3

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.”4

PepsiCo could benefit from undertaking the requested audit. In the past it has faced allegations of discriminatory hiring practices,5 advertising low-nutrition products more heavily in communities of color,6 and encouraging a hostile work environment.7 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 was called “tone-deaf” by Marketing Week and led to extensive social media protests against the PepsiCo brand.8