Coca-Cola and Pepsi to Face Shareholder Proposals Citing the Potential Health Harms From Continued Use of Non-Sugar Sweeteners in Diet Drinks

CONTACT:
Susana McDermott
Director of Communications
Interfaith Center on Corporate Responsibility (ICCR)
201-417-9060 (mobile)
smcdermott@iccr.org

NEW YORK, NY, THURSDAY, APRIL 18, 2024 – Investors members of the Interfaith Center on Corporate Responsibility (ICCR) today announced that Coca-Cola ($KO) and Pepsi ($PEP) -- two of the world’s largest beverage companies -- would face shareholder proposals questioning the companies’ continued use of non-sugar sweeteners (NSS) at their May 1st annual stockholder meetings.

The resolutions request that both companies issue third-party reports on their efforts to assess and mitigate the potential health harms associated with their use of non-sugar sweeteners. Several ICCR members have been engaging food and beverage companies around nutrition themes for several years in an effort to promote equitable access to nutrition. These engagements have centered on promoting product reformulations (reducing harmful ingredients and increasing beneficial ingredients), balanced menus, responsible marketing, and transparency around lobbying activities and influence on public policy.

Over the past ten years, the use of non-sugar sweeteners in diet and nutrition foods -- often marketed as ‘healthy’ and appealing to people searching for alternatives to sugar -- has come under increased scrutiny by the public health community. While sales of NSS have ballooned by over 700 percent, a study published in the Journal of Toxicology and Environmental Health in May 2023 found evidence casting doubt on the Food and Drug Administration’s (FDA) assertion that NSS are safe. Moreover, in July 2023, the WHO recommended “against the use of NSS to control body weight” noting that there “may be potential undesirable effects from long-term use of NSS, such as an increased risk of type 2 diabetes, cardiovascular diseases, and mortality in adults”.

Without stronger evidence that they aren’t linked to health harms over the long term, investors see the continued use of NSS in Coke and Pepsi products as creating systemic financial risks given the growing public health burden of managing these diet-related chronic diseases. Conducting an assessment of the type called for by the resolutions will bolster shareholder confidence that the companies are adequately managing those risks. According to Statistica, diet beverages accounted for 27.3% of total carbonated beverage sales in 2020 and Coke and Pepsi combined control over 70% of the carbonated beverage market.

A 12-ounce can of diet soda contains around 200 milligrams of aspartame, which is routinely used in Coke’s and PepsiCo’s low- and no-sugar beverages. The International Agency for Research on Cancer classified aspartame as “possibly carcinogenic to humans” in 2023. Aspartame was first approved for use in 1974 but the FDA ended up withdrawing its approval due to safety concerns only to reverse its decision in 1981 due to industry pressure.

Said Christina Dorett, Shareholder Advocacy manager, Seventh Generation Interfaith CRI, “More research is clearly needed to validate the degree of risk NSS pose. To accept the studies of one manufacturer of Aspartame as the basis of concluding that Aspartame is safe for human consumption -- despite the obvious conflicts of interest -- demonstrates the undue influence that the food and beverage industry holds over our regulatory bodies.”

Said Meg Jones Monteiro, Senior Director, Health Equity and Evaluation, “Conducting the requested assessment would assure shareholders that the companies are taking adequate steps to monitor the emerging science while mitigating any negative legal, financial, and reputational risks associated with its use of a product that is increasingly shown to not only lack any significant health benefits but to have potential health harms.”

Both Coca-Cola and Pepsi’s AGMS will be held on Wednesday, May 1. To see the full texts of these and other proposals visit our website: https://www.iccr.org/resolutions/

About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter/X (@iccronline), LinkedIn, and Facebook.