Beverage giants Coca-Cola (KO) and PepsiCo (PEP) are looking to comply with a recent executive order issued by the Trump administration on diversity, equity, and inclusion (DEI) programs, Bloomberg reported. This executive order, signed on January 20, banned DEI initiatives across government agencies and encouraged the private sector to follow suit.
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Both companies, which hold contracts to supply food and beverages to the U.S. government, will likely disclose any changes to their DEI programs in upcoming SEC filings.
These changes reflect a major shift for both companies, which have previously favored DEI initiatives. Coca-Cola had set goals for women’s leadership and aimed to mirror the U.S. population demographics within its workforce. Similarly, PepsiCo made significant investments to increase the representation of Black and Hispanic individuals within its organization and supply chain.
Growing Trend of DEI Initiatives Pullback
This move by Coca-Cola and PepsiCo comes amid a growing trend of companies scaling back their DEI programs in response to new government policies. Importantly, companies like Alphabet’s (GOOGL) Google, Meta Platforms (META), Amazon (AMZN), and Microsoft (MSFT) have already made changes to their DEI initiatives.
It is worth noting that the scrutiny over such initiatives extends beyond American companies. The Federal Communications Commission (FCC) is reportedly probing Comcast’s (CMCSA) DEI programs, due to concerns over potential violations of civil rights laws.
Which Is Better, PepsiCo or Coca-Cola?
According to the TipRanks Stock Comparison Tool, KO stock has a Strong Buy consensus rating, whereas PEP stock holds a Moderate Buy. Moreover, analysts project an upside potential of 8.3% for Coca-Cola stock and 14.9% for PepsiCo stock.
