Business, Management

PepsiCo’s Stakeholders, CSR & ESG

Updated on Updated on by Roberta Greenspan
PepsiCo CSR, ESG, stakeholders, sustainability, corporate social responsibility programs, and corporate citizenship analysis and case study
The 2004 Jersey of Club Atlético Boca Juniors of Buenos Aires, Argentina, promoting the Pepsi brand. PepsiCo’s corporate social responsibility (CSR) and ESG strategy satisfies stakeholders’ interests for sustainability. (Photo: Public Domain)

PepsiCo’s strategy to address stakeholders’ interests is integrated into the company’s Global Citizenship policy, which serves as its primary strategy for corporate social responsibility (CSR) and environmental, social, and governance (ESG) goals for business sustainability and related concerns. Considering Archie B. Carroll’s model, this case of PepsiCo involves diverse stakeholders with interests and demands regarding the food and beverage business. These stakeholder interests change alongside market and industry factors, like the social and ecological trends noted in the PESTLE/PESTEL analysis of PepsiCo. The company’s CSR and ESG programs adapt to changes in the consumer goods industry and business environment.

PepsiCo’s ESG and CSR programs align with the interests of stakeholders. Variations among stakeholders and consumer goods markets are addressed through the company’s sustainability, green operations, business ethics, and corporate citizenship initiatives. These CSR and ESG programs reinforce the business and its brands against competitors, like The Coca-Cola Company, Unilever, and Keurig Dr Pepper. The resulting competitive challenges illustrated in the Five Forces analysis of PepsiCo are managed through the company’s competencies that benefit from CSR and ESG programs for stakeholders.

PepsiCo’s Stakeholders & Corresponding CSR & ESG Initiatives

PepsiCo’s corporate social responsibility strategies are supported based on how stakeholders impact the business. The company’s CSR and ESG prioritization of stakeholders is stated in its corporate beliefs and purpose of business. The following are PepsiCo’s major stakeholder groups, arranged according to the company’s prioritization:

  1. Consumers and customers (top priority)
  2. Communities
  3. Employees
  4. Investors
  5. Government (least priority)

Consumers and Customers. Consumers and customers have the highest priority in PepsiCo’s corporate social responsibility strategy. This stakeholder group determines the financial standing of the company in terms of revenues. Consumers and customers are interested in high quality and reasonably priced products. Customers in a business partnership with the food-and-beverage company are interested in stable and improving business performance. Based on the significance of these stakeholders, PepsiCo uses continuing innovation processes to improve its products, such as products under the Pepsi brand. For example, some of the company’s products now have less salt, less fat, and less sugar content to improve their effects on consumer health. PepsiCo calls these efforts “Human Sustainability.” These ESG and CSR efforts satisfy consumer-focused goals based on PepsiCo’s vision and mission for industry leadership and customer satisfaction.

Communities. Part of PepsiCo’s thrust in corporate social responsibility is to ensure that it always has a positive impact on society. As such, the company considers communities as a second-priority stakeholder group. Communities are significant stakeholders because they influence the consumers’ and employees’ perspectives about the consumer goods company. The interests of these stakeholders include corporate support for community development programs. The PepsiCo Foundation provides financial assistance for such programs. The Foundation invests in organizations and approaches, like Diplomas Now, which supports education and career development in city neighborhoods. Also, the firm expands recycling and waste management programs. These corporate social responsibility approaches are part of PepsiCo’s “Environmental Sustainability” policy.

Employees. PepsiCo believes that employees are significant determinants of the company’s long-term growth. This stakeholder group is interested in career development and fair compensation. To address such concerns, PepsiCo’s “Talent Sustainability” policy goal is “to provide a safe and inclusive workplace globally.” This goal highlights fairness and employee welfare in the company’s human resource management approaches. Additionally, PepsiCo’s work culture (business culture) promotes a work environment that supports CSR and ESG goals for this stakeholder group. Moreover, the design of PepsiCo’s corporate structure (business structure) ensures offices, departments, and divisions that facilitate these ESG and CSR goals for the benefit of employees.

Investors. As stakeholders, investors are interested in PepsiCo’s higher financial performance. Investors significantly affect the company through availability and cost of capital. PepsiCo believes that its focus on consumers/customers, communities, and employees contributes to optimal financial performance. As such, the company always aims to address the concerns of consumers, employees, and communities, while using financially sound strategies. Also, PepsiCo’s operations management implements measures and standards for efficiency and sustainability, which lead to cost-effectiveness and strong finances that satisfy CSR and ESG goals for this stakeholder group of investors.

Government. Governments are significant in terms of imposing rules and requirements on PepsiCo’s business. This stakeholder group is interested in ensuring that companies comply with regulations. PepsiCo’s global legal team and public relations team address issues related to governments. Furthermore, the company has policies for bottlers, distributors, and suppliers to ensure that they comply with government requirements. Thus, the interests of governments as stakeholders are included in PepsiCo’s corporate social responsibility strategy.

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