PepsiCo Faces ESG Pressure as Shareholder Proposal Targets Plastic Packaging
PepsiCo is under renewed scrutiny from shareholders, as a proposal urges the beverage and snack giant to take stronger action on plastic pollution. The measure seeks a detailed report on how the company plans to reduce single-use plastic packaging, citing environmental risks, regulatory pressures, and reputational concerns that could impact long-term value.
The proposal, filed by Green Century Capital Management and supported by As You Sow, reflects growing investor concern over systemic ESG risks tied to plastic use. PepsiCo is one of the top plastic polluters globally, according to advocacy group Break Free From Plastic, which has ranked the company consistently in its top five polluters since 2018.
While PepsiCo has committed to making 100% of its packaging recyclable, compostable, biodegradable or reusable by 2025, critics argue that commitments have not translated into meaningful reductions. Currently, nearly 87% of PepsiCo’s beverage volume in plastic bottles is sold in non-reusable formats. Shareholders backing the proposal point out that this intensifies waste and emissions, especially where recycling infrastructure is inadequate.
The resolution emphasizes business risk, warning that mounting regulations worldwide on plastic usage, including bans and taxes, could disrupt operations and impose new costs. For FMCG brands with global footprints, extended producer responsibility (EPR) policies and plastic taxes in markets like the EU and Canada are already transforming packaging economics.
PepsiCo has recommended voting against the proposal, citing ongoing investments in material innovation and refillable infrastructure. Nevertheless, pressure from investors continues to build. In a similar 2022 vote, the same proposal received 28% shareholder support—an unusually high figure for an ESG resolution, indicating sustained demand for stronger action.
For FMCG leaders, the development highlights an industry-wide pivot. Companies beyond beverages—from household goods to personal care—face mounting calls for packaging transformation. Investors are increasingly insisting on quantitative roadmaps for waste reduction, not just targets.
With shareholder activism gaining momentum and regulatory developments advancing globally, ESG strategy linked to packaging sustainability is becoming not just good practice—but a critical business imperative for FMCG players.