McDonald's, PepsiCo urged to cease Russia operations by NY pension fund

McDonald's, PepsiCo and others to consider pausing or ending business operations in Russia amid the country's ongoing invasion of Ukraine.The fund's trustee, New York State Comptroller Thomas DiNapoli, warned in a series of letters that companies who continue to operate in Russia and invest in Russian assets "face significant and growing legal, compliance, operational, human rights and personnel, and reputational risks." "Pausing or ending McDonald’s business operations in Russia would address various investment risks associated with the Russian market and play an important role in condemning Russia’s role in fundamentally undermining the international order that is vital to a strong and healthy global economy," DiNapoli wrote in a letter addressed to McDonald's CEO Chris Kempczinski reviewed by FOX Business.

The comptroller's office estimates that the $280 billion fund has about $110.8 million in public equity investments, including direct holdings and co-mingled funds in Russian companies.

The New York Common Retirement Fund's stakes in McDonald's and PepsiCo were valued at approximately $410 million and $501 million, respectively, as of the end of 2021, according to its latest 13F filing.McDonald's has a total of 847 restaurant locations in Russia and 108 locations in Ukraine.

The company owns 84% of its Russia locations and 100% of its Ukraine locations. Russia and Ukraine combined represented approximately 2% of the company's system-wide sales, roughly 9% of its revenue and less than 3% of its operating income 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.