Religious Shareholders to Challenge PepsiCo To Report Effect of AIDS in Africa Operations

Coalition's Resolution Asks Company for Report on Business Impact of AIDS

Apr 24, 2003, 01:00 ET from MMA

    GOSHEN, Ind., April 24 /PRNewswire/ -- Concerned PepsiCo (NYSE:   PEP)
 shareholders today announced their sponsorship of a proxy resolution asking
 the soft drink industry giant to report on how it plans to deal with the
 business and employee impact of the AIDS pandemic in Africa.
     On March 4, 2003, the U.S. Securities and Exchange Commission rejected a
 PepsiCo effort to kill the proxy measure. The resolution was filed by MMA
 along with the Congregation of the Sisters of Charity of the Incarnate Word,
 School Sisters of Notre Dame Cooperative Investment Fund, Sisters of Mercy of
 the Americas, Sisters of St. Dominic of Caldwell New Jersey, and ASC
 Investment Group. The resolution will be voted on May 7, 2003, at the PepsiCo
 annual meeting in Plano, Texas.
     Mark Regier, stewardship investing services manager for MMA said, "Besides
 being a humanitarian issue, this also is a very real business issue for
 PepsiCo and its shareholders. The company has told us the spreading pandemic
 of AIDS in Africa is not material to their business. But shareholders don't
 know that for sure until research is done. We are asking for a report on how
 this pandemic will affect the company's business in Africa. The reality here
 is that other major companies in Africa have recognized the importance of this
 issue and are responding to shareholders' concerns by reporting on how they
 are dealing with it. At MMA, we are responsible as shareowners to call on
 PepsiCo to take the same action."
     Seamus Finn, director of Social Justice for the Missionary Oblates of Mary
 Immaculate U.S., and head of the AIDS Issue Group for the Interfaith Center
 for Corporate Responsibility, said:  "This is a perfect illustration of how
 doing the right thing from a moral standpoint is also the right thing from a
 business standpoint. These shareholders believe PepsiCo's globally visible
 brand and sales dependence on disposable income make the company highly
 susceptible to reduced sales resulting from either the AIDS pandemic itself or
 a backlash to the company's refusal to deal with this issue. PepsiCo may be
 well-positioned to help respond and contribute to the HIV/AIDS mitigation
     The proxy resolution submitted by the PepsiCo shareholders asks for an
 inexpensive study detailing the impact of AIDS on the company's business
 operations in Africa. The resolution states:
      Shareholders request the Board of Directors to report on: the effect of
      the health pandemic on the company's operations in Sub-Saharan Africa;
      the Company's response to the pandemic; and, that the report would be
      made available to shareholders by October 2003 (omitting proprietary
      information and at reasonable cost).
     Within the last two weeks, PepsiCo has added a new section, HIV/AIDS
 Initiatives, to its corporate Web site in response to shareholder concerns.
 The new section features information on its African business operations,
 employee programs, and charitable activities. "We thank and applaud PepsiCo
 for this response to shareholder concern on this issue," commented Regier. "We
 look forward to a thoughtful assessment of the overall business impact of the
 pandemic on the company's African operations. It is only from this perspective
 that we can judge the appropriateness or effectiveness of investments in
 employee and community programs. We hope this next critical step is yet to
 come and welcome the opportunity to assist the company in any way we can."
     While PepsiCo operations are smaller in Africa than other comparable
 corporations, PepsiCo has indicated operations in Africa are growing and that
 they are "in Africa for the long term." The United Nations, the World
 Health Organization and many business leaders have highlighted the pandemic as
 an issue for all participants in the Sub-Saharan economy.
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