Giggs in British squad for London Games
Wales striker Craig Bellamy of Liverpool and Manchester City defender Micah Richards are the other two in an 18-man squad predominantly made up of Premier League players.
The omission of Los Angeles Galaxy midfielder David Beckham was purely a footballing decision, Pearce told reporters.
"I've got a vast amount of respect for David and what he's done for the bid process and bringing the Olympics here," said Pearce.
"But I've also got a duty of care to everybody within the squad to pick, in my mind, the best possible squad. The only relevance I really have is footballing terms.
"I know he had a real burning passion to be part of this squad [but] I don't think there's a manager around who picks on sentiment," added Pearce.
"With regards to ticket sales, merchandise, whatever... I'm a football man. I pick solely on football ability and my opinion and I have to back my opinion."
Pearce said no pressure was ever put on him to include 37-year-old former England captain Beckham for non-footballing reasons.
"I have to be comfortable when I get into my bed at night I've made decisions that are solely on footballing grounds," said the former Nottingham Forest and England defender.
"Nothing else. Not on personality, not on who I like as individuals. David would feature very, very highly on individuals I like.
"I sat down with the FA chairman [David Bernstein] sometime before Christmas... if at that stage he would have said to me certain individuals must be in your squad I probably would not have done the job," added Pearce.
"Right throughout the process I've had carte blanche to pick whatever players I deemed necessary. I take my profession very seriously."
Pearce ruled out a coaching role for Beckham at the Olympics but the British team's chef de mission Andy Hunt said the former Manchester United player had already been approached about being involved in another unspecified capacity.
"We would be delighted and honoured to have David involved in some way. That would be fantastic," said Hunt.
Britain's 18-man squad contains 13 Englishmen and five Welshmen, meaning there is no Scottish or Northern Irish representation.
"I'm not picking on personality, I'm not picking on ticket sales, I'm certainly not picking on nationality," said Pearce.
"I couldn't even tell you, if I'm being honest, how many players are from Wales or England. They are all Olympians now and that's the only way I view them.
"Whenever I have supported a GB member in the Olympics as an individual myself, I've never looked at their individual nationality," Pearce added.
"I've seen them as British participants and I hope that will be the case throughout our isles... whether it be football, athletics, whatever discipline it may be."
Hosts Britain open their first Olympic football campaign since 1960 when they meet Senegal at United's Old Trafford stadium on July 26.
Squad: Joe Allen (Swansea City), Craig Bellamy (Liverpool), Ryan Bertrand (Chelsea), Jack Butland (Birmingham City), Steven Caulker (Tottenham Hotspur), Tom Cleverley (Manchester United), Jack Cork (Southampton), Craig Dawson (West Bromwich Albion), Ryan Giggs (Manchester United), Aaron Ramsey (Arsenal), Micah Richards (Manchester City), Danny Rose (Tottenham Hotspur), Scott Sinclair (Swansea City), Marvin Sordell (Bolton Wanderers), Jason Steele (Middlesbrough), Daniel Sturridge (Chelsea), Neil Taylor (Swansea City), James Tomkins (West Ham United).