View of PepsiCo’s Global headquarters building on the Donald M. Kendall Sculpture Gardens in Purchase, New York (Photo Credit: Peter Bond)…public domain link here)[/caption] Shows No Interest in Alternative, More Constructive, Approach to the Issue, Preferring Party Line of LGBT Activist Groups to the Position Held by a Majority of the Public in Opinion Polls
Pepsi Previously Declined an Activist Role on Another Issue that Would Have Helped the Poor in the Developing World and Helped Pepsi’s Bottom Line, But Has Jumped in With Both Feet on Controversial Issue That Risks Angering Half of Its Customer Base
New Bern, NC / Washington, D.C. – Pepsi CEO Indra Nooyi doubled-down on the company’s commitment to LGBT activism at the company’s shareholder meeting today.
Ms. Nooyi made it clear that activism on the LGBT issue is a priority for the company.
Ms. Nooyi has called on North Carolina to repeal a state law known as HB2 that itself repealed a Charlotte ordinance that said bathroom use in Charlotte cannot be designated by biological sex, and made harsh statements about the law.
The law is highly controversial, in part because business executives such as Pepsi’s Nooyi, entertainers such as Bruce Springsteen, and even foreign businesses such as Ontario’s Cirque du Soleil have made firm statements against the law that appear to question the morality of anyone holding a contrary opinion.
Yet the public, while divided about the law, has certainly not reached a consensus that the law should be repealed, let alone that its backers are immoral. A Time-Warner Cable News poll taken in April showed 51 percent of North Carolinians support the law’s provisions regarding restroom use, while 40 percent oppose it. Nationally, a CBS News poll about transgender restroom access policies generally, and not the North Carolina law specifically, found 59 percent preferred limiting restroom and locker room access to people of the same biological sex while 26 percent advocating letting people use the restroom or locker room of their choice.
“Ms. Nooyi appears to be comfortable casting her statements on the law as representative of Pepsi as a corporation, and likewise appears to be committed to continuing the company’s LGBT activism, but she has in the past turned down requests to involve the company in policy activism that has a more direct impact on Pepsi, is less controversial, and literally could save lives,” Justin Danhof said. “In 2014, I asked Ms. Nooyi if Pepsi would increase its educational activities about the life- and eyesight-saving benefits of genetically-modified organisms, or GMOs, in the Third World. Pepsi uses GMOs extensively, so making sure the public knows the truth is important to Pepsi’s bottom line, but this also is a huge humanitarian issue. Ms. Nooyi was very courteous when she spoke to me, but she made it clear that she thought it was more important for the federal government through agencies such as the FDA and think-tanks like the National Center for Public Policy Research to do most of the heavy lifting on GMO education. Proving the point further with real-life evidence, since 2014, we have not seen Pepsi take a strong lead on GMO education or policy, but Pepsi is all over the news on LGBT and bathroom-access issues.”
“So we see the priorities,” said Danhof. “When involvement in an issue can save lives and help Pepsi’s revenue stream, Pepsi has a little bit of interest in speaking out, but not very much. When another issue, one that at present is very important to the left, does not prevent premature death, reduce malnutrition and blindness in the developing world, does not involve Pepsi products, and has at least the potential of angering 51 percent of Pepsi’s customers, Pepsi is firmly committed to speaking out.”
“This is the picture of a company that has made the decision to put activism over profits, and LGBT activism over anti-poverty activism,” added Amy Ridenour, chairman of the National Center for Public Policy Research, “and it is clear it is Pepsi that is making the statements here, not its CEO speaking as an individual, which she has every right to do, and which is far less likely to anger Pepsi customers.”
“A clue to the strength of the company’s commitment to being part of the LGBT activist coalition can be found in Ms. Nooyi’s response when I offered the company a framework for promoting the company’s values in a constructive way, instead of driving them apart, as implying that people who hold a different view lack moral fiber quite predictably will tend to do,” said Danhof. “We suggested that Pepsi bring the different sides together to identify the areas of common ground, so action can be taken immediately in those areas, and to identify areas of discord, so a specific search for innovative solutions can immediately be undertaken. In the restroom case, for example, the most contentious issue – locker room access – might find a solution if big corporations donated money so the public schools could build private shower facilities, to name just one possible solution that seems doable yet does not drive Americans apart.”
“This is a far more productive approach than casting aspersions on 51 percent of the community, and far better for Pepsi, but I might as well have been talking to a brick wall,” Danhof continued. “A very courteous brick wall, and I do commend Ms. Nooyi for being willing to speak to me, as she has been willing to do on many occasions, and that is very much appreciated, but a brick wall nonetheless.”
Remarks made by Mr. Danhof publicly at the meeting, as prepared for delivery, are available here.
In part, Danhof said:
Liberal activists pressured Pepsi to denounce the [HB2] law. And you obliged. We suggest this was a missed opportunity to bring folks together and elevate Pepsi’s brand. Your decision to speak out so forcefully against the law pleased one contingency but angered another. And that anger is palpable. In reaction to HB2, Target announced that it would open its bathrooms to any and all-comers. Over a million Americans now claim to be boycotting the chain in protest. Pepsi does not want to be the next Target.
When approached to take a position on an issue, many companies see only a few options: say nothing, or choose one side or the other. I propose there is an alternative: bring people together.
When you denounced the law, you made Pepsi just another one of the many companies that jumped on a bandwagon. You weren’t leading on the issue. If instead, Pepsi had worked to bring both sides together, you would be viewed as a leader in the community, the state and indeed the nation. Pepsi holds a prominent role here in North Carolina. Why use that position to divide citizens against each other? Or, for that matter, some customers against the company?
I have with me today a one-page framework companies can use to approach contentious issues like this. It does this by focusing on solutions and can be applied to literally every issue. I’m hopeful the company will take a look at it. I think you will find it helps the company stand up for its values in a way that brings people together and increases the public’s appreciation for Pepsi as a company and as a brand.
The next time you are approached by a group of activists demanding that Pepsi sign a letter or denounce this or that, we simply suggest that you ask yourself, Ms. Nooyi, is there a way that I can bring both sides together and lead the community to solutions the public – and Pepsi’s customers – can get behind? Can I suggest to you that the paradigm I have suggested would help Pepsi be the community leader it clearly wants to be without making itself another Target?
“We hope Pepsi will reconsider,” concluded Ridenour. “And choose instead a path that brings people together.”
The National Center for Public Policy Research’s Free Enterprise Project is the nation’s preeminent free-market activist group focusing on shareholder activism and the confluence of big government and big business. In 2014-15, National Center representatives participated in 69 shareholder meetings advancing free-market ideals in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers’ rights and many other important public policy issues. Today’s Pepsi meeting marks its 8th shareholder meeting of 2016.
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