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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