Soft drinks manufacturer PepsiCo has bowed to shareholder pressure to become the first publicly traded multinational corporation to create a policy in support of the human right to water.

PepsiCo had its water-use license revoked in Pudussery, India, in 2003 after claims that its bottling plants were depleting community groundwater. Under the CEO Water Mandate, a public-private initiative launched in 2007, companies that consume a lot of water have a responsibility to prioritise water resource management. The mandate is, however, voluntary. So when NorthStar Asset Management, a Boston-based investment management firm, discovered that it had PepsiCo shares in its portfolio, it submitted a shareowner proposal directing PepsiCo to create a policy articulating its commitment to the Human Right to Water.

The proposal, drafted with the help of water justice experts at the Unitarian Universalist Service Committee (UUSC), an international human rights organisation and later supported by Boston Common Asset Management, was successfully submitted for the 2008 proxy season.

After asking NorthStar to provide an example of the policy they would like to see adopted, PepsiCo agreed to adopt an official policy in support of the human right to water and to ensure that its activities preserve the water quality in the communities in which it operates.

See also:PepsiCo Marks World Water Day and Reaffirms Commitment to Responsible Water Stewardship, PepsiCo, 20 Mar 2009

Web sites:NorthStar Asset Assessment; Unitarian Universalist Service Committee; PepsiCo Guidelines in Support of the Human Right to Water

Source: Robert Kropp, SRI, 28 Apr 2009

Tags: policies & legislation, south asia, water quality