PepsiCo Faces Backlash Over DEI Cuts Amid Activist Pressure
PepsiCo is under scrutiny from civil rights leaders following reports that the company has scaled back its diversity, equity, and inclusion (DEI) initiatives. Civil rights activist Rev. Al Sharpton is leading calls for potential boycotts, signaling rising tensions between corporate America and racial justice advocates.
At the heart of the controversy is a July 2023 letter from activist investor Nelson Peltz to his firm Trian Partners, pressuring PepsiCo and Unilever to reevaluate their DEI strategies. The letter, which was later made public, suggested that companies should focus more on shareholder value, raising concerns that DEI efforts may hinder performance.
Although PepsiCo has not officially confirmed any reduction in DEI programs, Sharpton and other civil rights leaders are demanding transparency. They argue that such moves could mark a retreat from the racial equity commitments many companies made following the 2020 murder of George Floyd.
“If they think that we are just going to forget, they’ve got another thing coming,” Sharpton said, warning companies like PepsiCo not to reverse progress that was publicly championed just a few years ago. He hinted at possible boycotts if companies fail to clarify or recommit to their DEI pledges.
PepsiCo responded by stating it “remains committed to championing diversity, equity, and inclusion in the workplace, in the marketplace, and in the communities we serve.” However, activists are calling for detailed disclosures on current DEI investments and staffing to hold the company accountable.
The pushback comes amid broader Wall Street skepticism about DEI spending, especially from conservative-leaning investors urging companies to prioritize profitability over social initiatives. Some corporations have responded quietly by scaling back programs or not replacing outgoing DEI executives, raising alarms among advocacy groups.
For FMCG industry professionals, the PepsiCo case underscores the growing reputational risk associated with navigating DEI commitments. Beyond investor relations and shareholder return, brands must now consider the social and ethical implications of scaling back initiatives that resonate deeply with consumers and communities.
As expectations shift, transparency and authenticity around corporate values—including DEI—are becoming critical components of brand trust and long-term growth strategies.