Paid well for her involvement, the reality TV star is reportedly unable to comment on the controversy without the company's approval.
In the failed commercial, Kendall leaves a photo shoot to join a festive social demonstration.
The protesters cheer after she hands a can of Pepsi to a police officer, who takes a sip and smiles at his colleague. Though the scene seems to be set in the USA, filming actually took place in Bangkok.
The ad instantly sparked outrage in the form of tweets and memes as a "cynical attempt to capitalize on the current political discourse".
People took to social media to air their thoughts about the issue, with a lot of them accusing Jenner and Pepsi of cultural appropriation.
According to Pepsi, the only thing that the company would like to claim responsibility is for the message about peace, unity and tolerance they tried to transmit.
Pepsi also apologised to Jenner. She did, however, remove all her tweets related to the ad, and her mother Kris Jenner, who had congratulated her for the video, did the same. While Jenner allegedly had approval rights in her contract, the source maintained that she "relied on Pepsi to do their due diligence and trusted that it would be tasteful". "We did not intend to make light of any serious issue", Pepsi said in the Twitter image post as their way of apologizing for the controversy. It showed Kendall leaving a photo shoot to join a protest.
Color of Change highlighted the similarity between the shot, and a famous photograph of Black Lives Matter activist Lesha L. Evans, which was taken past year at a protest in Baton Rouge, Louisiana.
The ad fiasco had a negative effect on Wall Street, with Pepsi stocks closing down 0.12 percent Wednesday.