As a global food and beverage company and major agricultural buyer, PepsiCo?s supply chains expose it to significant human rights risks that are financially and operationally material. PepsiCo?s Supplier Code of Conduct applies only to tier 1 suppliers, though it pledged to extend these principles to all franchisees and joint ventures by 2025. [1] PepsiCo?s most recent Human Rights Assessment identified forced labor and poor employment conditions as salient risks in Latin America and Southeast Asia, across high-risk commodities such as cane sugar and palm oil. Migrant, contract, and women workers are particularly vulnerable. [2] Despite its policy commitment, PepsiCo has provided investors no evidence of oversight or remediation across high-risk franchisees, high-risk commodities and regions. The company participates in multi-stakeholder initiatives aimed at addressing human rights across value chains but has not reported their impact. [3] In 2024, reports documented labor rights abuses in India, [4] a growth market for PepsiCo. Some were linked to Varun Beverages, PepsiCo?s largest international franchised bottler, responsible for roughly 90 percent of PepsiCo?s beverage sales in India. A 2025 Bombay High Court ruling confirmed human rights violations among sugarcane cutters, underscoring systemic risks in PepsiCo?s supply chain. [5] In 2025, reports surfaced of labor rights abuses on Malaysian palm oil plantations supplying PepsiCo and others, including subminimum wages, unpaid overtime, and inadequate worker protections. [6] Investigations found risks in PepsiCo?s palm oil supply in Latin America, highlighting cross-commodity human rights concerns. [7] These systemic risks are material given PepsiCo?s expansion in high-risk regions. Despite pledging to limit exposure to Russia after the invasion of Ukraine, PepsiCo has expanded its presence , selling soft drink products under alternative brands, opening a new factory, and registering a trademark. The Ukrainian National Agency on Corruption Prevention designated PepsiCo an ?international sponsor of war.? [8] In 2024, its Africa, Middle East & South Asia division generated $6.2 billion net revenue, Latin America contributed $8.8 billion, and Russia contributed $4.5 billion. [9] Systemic human rights risks pose financial, operational, and reputational threats, [10] compounded by emerging global due diligence regulations that heighten legal and regulatory exposure. Shareholders require transparency to assess whether PepsiCo?s human rights oversight is robust and consistently enforced, enabling evaluation of how effectively the company manages material risks that could disrupt operations and diminish long-term value. [1] https://edge.sitecorecloud.io/pepsico-5v9wci20/media/Files/esg-topics/2024-esg-performance-metrics.pdf [2] https://edge.sitecorecloud.io/pepsico-5v9wci20/media/Files/esg-topics/2022-PepsiCo-Salient-Human-Rights-Issues-Update.pdf [3] https://www.nytimes.com/2024/07/30/world/asia/sugar-human-rights-bonsucro-india-hysterectomies.html [4] https://www.nytimes.com/2024/03/24/world/asia/india-sugar-cane-fields-child-labor-hysterectomies.html [5] https://lawtrend.in/bombay-high-court-orders-maharashtra-to-enhance-welfare-for-sugarcane-cutters/?utm_source=chatgpt.com [6] https://www.business-humanrights.org/en/latest-news/malaysia-indonesian-palm-oil-workers-endure-poor-conditions-incl-below-living-wages-wage-theft-lack-of-contracts-gender-based-wage-disparities-report-finds/ [7] https://www.thebureauinvestigates.com/stories/2024-04-18/snack-giant-pepsico-sourced-palm-oil-from-razed-indigenous-land [8] https://nazk.gov.ua/en/news/you-re-not-you-when-you-continue-to-work-in-the-russian-federation-the-nacp-added-pepsico-and-mars-to-the-list-of-international-sponsors-of-the-war/ [9] https://pepsico.gcs-web.com/static-files/c812dc04-26db-4e07-a1a0-c1719099571a [10] https://www.spglobal.com/en/research-insights/special-reports/look-forward/labor-a-critical-component-of-supply-chains-under-growing-pressure?utm_source=chatgpt.com