PepsiCo is one of the best known food and beverage companies in the world.
Between its major plastic pollution and links to Israel’s oppression of Palestine, should we be worried about its ethics?
Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.
Learn more about our company profiles →Our research identified multiple ethical issues with PepsiCo, including massive use of disposable plastic, court cases over alleged tax avoidance, and boycott calls against a subsidiary with operations in illegal Israeli settlements.
Below we outline some of these issues. To see the full detailed stories, and PepsiCo’s overall ethical rating, please sign in or subscribe.
A PepsiCo subsidiary faces widespread boycott calls over its links to Israel’s occupation of Palestine.
The company owns the SodaStream brand, which sells machines for making carbonated drinks. Until 2014, SodaStream’s main factory was in an illegal settlement in the West Bank called Ma’ale Adumim, which had been built on the remains of seven Palestinian villages.
Israeli groups have built and occupied hundreds of settlements on Palestinian land with the government’s support, forcibly displacing Palestinian populations. The settlements have been declared illegal by the United Nations, and are considered a key component of the state’s occupation. Companies in settlements often benefit from government tax breaks and cheap labour from Palestinians – who are not equality protected under Israeli labour laws.
SodaStream closed the factory in 2014, following global campaigning. The following year, however, it moved the factory to the Naqab desert beside Rahat, a planned township where Palestinian Bedouins have been forcibly evicted. Workers continued to report exploitation.
At the time, SodaStream refuted criticism of the company. “There’s no scandal,” CEO Daniel Birnbaum told members of the media. “It’s a legitimate factory [in the West Bank]. We’re not breaking any international law, but in the meantime we decided to build a new factory here in the Negev.”
The Boycott, Divestment and Sanctions (BDS) movement – a Palestinian-led campaign against companies linked to the Israeli state – calls for an ongoing boycott of SodaStream, which was purchased by PepsiCo in 2018.
PepsiCo scores extremely badly in Ethical Consumer’s packaging rating.
The company has consistently been named one of the world’s worst plastic polluters. In 2023, environmental non-profit Break Free From Plastic coordinated an audit of plastic pollution by over 8,000 volunteers in 41 countries, who collected plastic waste and categorised it by brand. The largest number of plastic items found were from PepsiCo or its subsidiaries, and the group noted that PepsiCo had been in the top four worst polluters every year in the six years since the audit began.
In November 2023, New York State sued PepsiCo for plastic pollution in the Buffalo River, which it said was contaminating the water and harming wildlife. PepsiCo won the dismissal of the case the following year, with the judge stating that it was individuals not the company that ignored laws prohibiting littering.
PepsiCo said that it was pleased with the decision, and "serious" about plastics reduction and effective recycling.
When we reviewed PepsiCo’s website and sustainability reporting, we found only limited evidence that the company was reducing packaging in its supply chain or its own operations. PepsiCo said, for example, that it was increasing the amount of recycled polyethylene terephthalate – a plastic that is made from recycled materials and therefore considered more eco-friendly than standard PET – for its products, but we considered this to be only a minimal step.
PepsiCo has taken some meaningful steps to cut emissions. For example, it has increased sourcing of renewable energy for its operations, cut emissions from refrigeration, and introduced what it calls regenerative farming in its agricultural supply chain.
In 2022, PepsiCo reported all of its emissions, including its supply chain emissions. The company had set a target to reduce emissions in line with vital international climate goals.
However, PepsiCo has also repeatedly been criticised for being one of the world’s largest users of plastic. Plastics is produced from fossil fuels – usually transformed from crude oil – making it a major and growing driver for their extraction.
PepsiCo owns a dairy business and uses animal products in a number of its products, such as eggs in its baked goods and flavourings in its crisp flavours. While the company states that these products account for a “small portion” of their overall business, as a major multinational conglomerate, it's likely to use large amounts of animal products overall.
The company has some animal welfare policies in place. For example, its Global Animal Welfare Policy includes a “commitment toward sourcing 100% cage-free eggs in the U.S. by the end of 2020 and global markets by the end of 2025”. It states that it will not use animal testing for its food and beverage ingredients “except when required by law to demonstrate safety or efficacy.”
Ethical Consumer, however, considered these policies to be weak – for example, by allowing animal testing in multiple circumstances. The company does not appear to require higher animal welfare standards, such as access to pasture for cattle or use of organic certification.
The policy was published in April 2020 and no update appeared to be available.
PepsiCo received a very poor score in Ethical Consumer’s animals rating overall.
PepsiCo has faced allegations of links to workers’ rights abuses.
In February 2023, for example, a New York Times investigation found that migrant children were working in factories across the United States. The children, mostly from Central America, were found to have been working long hours, overnight shifts, and in dangerous environments for factories making food for PepsiCo and other brands.
PepsiCo responded, “We are deeply concerned about the allegations of labor violations by one of our manufacturing partners. While we neither own or operate these facilities, we hold our suppliers to the highest standards and require compliance with all laws and regulations as well as with our Global Supplier Code of Conduct, which specifically prohibits the hiring of underage workers."
PepsiCo does have a workers’ rights policy, which bans discrimination and use of forced labour, among other requirements. However, the policy does not adequately limit the length of the working week or ensure the payment of a living wage.
PepsiCo scored poorly in Ethical Consumer’s workers’ rights rating overall.
PepsiCo owns multiple subsidies in tax havens including the British Virgin Islands and the Netherlands, which do not appear to be serving local populations.
PepsiCo has faced court cases in both Australia and the U.S. over its tax payments.
In 2021, for example, a court in Illinois ruled that PepsiCo should pay millions in penalties and back taxes for failure to pay income tax. As of February 2026, PepsiCo continued to challenge the decision in higher courts, denying the allegations.
This profile was written in February 2026 and most of the research was conducted in May 2024.
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