PepsiCo shareholders to weigh profits, people, and the environment

More great news for the human rights to water! For the past few months, UUSC's Environmental Justice Program has been working with NorthStar Asset Management, a socially responsible wealth-management firm here in Boston, on a shareholder resolution that requires PepsiCo to adopt a human-right-to-water policy for all of their domestic and international operations.

To give some indication of the company’s overuse and abuse of water resources, PepsiCo uses 2.5 liters of water for every liter of soda that it produces. Given that PepsiCo sells around 36 billion liters of soda in an average year, this means the beverage giant consumes over 63 million gallons of water every day.

In 2003, PepsiCo’s license to operate in Puthussery, in Kerala State, India, was revoked after the local community charged that PepsiCo’s bottling operations were committing “water piracy” by depleting groundwater sources in the area. In 2004, the Supreme Court of India ruled that both PepsiCo and Coca-Cola must label all cans and bottles with a consumer warning after tests showed their products contained unacceptable levels of residual pesticides.

UUSC and NorthStar Asset Management have begun a dialogue with PepsiCo about adopting a human-right-to-water policy. We believe this is an important way for the company to show its commitment to respecting the human rights of people in the communities in which they operate and create a mechanism for monitoring the impact of its operations on access to water.

After PepsiCo refused to adopt such a policy, we decided to submit a resolution to PepsiCo shareholders so they could decide what good business practice is when it comes to water use. PepsiCo challenged this resolution with the Securities and Exchange Commission, but UUSC and Northstar prevailed. We will soon be presenting and speaking in support of this resolution at the PepsiCo annual shareholders meeting in Texas. (If you own stock in PepsiCo, you can vote your proxy in favor of our shareholder resolution.)

This does not mean the resolution will be passed, but it does mean that thousands of PepsiCo shareholders will read about the human right to water when the resolution is proposed. They will begin to understand that investing in companies like PepsiCo that threaten people's access to safe, sufficient, and affordable water for daily needs will become increasingly contentious.

On Wednesday in Texas, we hope to show that respecting human rights is the right thing to do, and that good business practice can improve a company’s bottom line. There are strong arguments for a triple bottom line: profits, people, and the environment. If people feel good about your practices, they will feel good about consuming your products. For a beverage company like PepsiCo that relies on the same water resources as the communities around them, it would behoove them to ensure that they protect their most vital ingredient: water.