McDonald’s and PepsiCo urged to cease operations in Russia by New York pension fund
The New York State Common Retirement Fund, one of the largest public pension funds in the United States, is urging McDonald’s, PepsiCo and others to consider suspending or ending their business operations in Russia in amid the country’s continued invasion of Ukraine.
The fund’s administrator, New York State Comptroller Thomas DiNapoli, has warned in a series of letters that companies that continue to operate in Russia and invest in Russian assets “face risks significant and growing legal, compliance, operational, human rights and personnel and reputational issues.”
“Suspending or ending McDonald’s business operations in Russia would address various investment risks associated with the Russian market and would play an important role in condemning Russia’s role in fundamentally undermining the international order that is vital to an economy. strong and healthy world,” DiNapoli wrote in a letter to McDonald’s CEO Chris Kempczinski, reviewed by FOX Business.
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The comptroller’s office estimates that the $280 billion fund has about $110.8 million in public investments, including direct stakes and mixed funds in Russian companies. The New York Common Retirement Fund’s stakes in McDonald’s and PepsiCo were valued at around $410 million and $501 million, respectively, at the end of 2021, according to its latest 13F filing.
McDonald’s has a total of 847 restaurants in Russia and 108 in Ukraine. The company has 84% of its sites in Russia and 100% of its sites in Ukraine. Russia and Ukraine combined accounted for about 2% of the company’s systemwide sales, about 9% of its revenue and less than 3% of its operating profit in 2021.
“Companies like McDonald’s and PepsiCo, which have a large footprint in Russia, need to consider whether doing business in Russia is worth the risk during this extraordinarily volatile time,” DiNapoli told FOX Business in a statement. “Russia’s unprovoked invasion of Ukraine and its highly unpredictable foreign policy pose a threat to the global economy. We encourage the companies in which we invest to carry out a risk analysis and determine what is in the best interest of their company and their shareholders.”
McDonald’s and PepsiCo did not immediately return requests for comment from FOX Business.
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In addition to McDonald’s and PepsiCo, letters were sent to Estee Lauder, Mondelez International, Fortinet Inc, Kimberly-Clark Corp., Bunge Limited, Coty Inc., Alnylam Pharmaceuticals and Trimble Inc. A spokesperson for the comptroller’s office said told FOX Business that it has not received any response from any of the companies at the time of publication.
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“Alnylam has no operations in Russia and only a very small intangible amount of product sales for our lifesaving drug for an ultra-rare genetic disease affecting pediatric patients comes from Russia,” the company said in a statement to FOXBusiness. “These drugs are exempt from penalties and we plan to continue to allow patients access to them.”
Estée Lauder said in a statement that it has suspended all business activity in Russia, including closing all stores it owns and operates and halting shipments to the country. Meanwhile, Fortinet ceased operations in Russia, including suspending sales, support and professional services, while Trimble ceased selling its products and services to Russia and Belarus.
Mondelez International, Kimberly-Clark Corp., Bunge Limited and Coty Inc. did not immediately return FOX Business’ requests for comment.