NYC-Led Investor Group Pans Starbucks’ Workers’ Rights Assessment

A group of investors led by New York City Comptroller Brad Lander and the city’s retirement systems said an independent analysis of Starbucks’ workers’ rights assessment raised concerns about a lack of worker input, board oversight, governance failures and ambiguity.

The group, which collectively owns nearly 2 million shares of Starbucks, includes the five New York City retirement systems, Trillium Asset Management, U.K.-based Pensions & Investment Research Consultants and the Shareholder Association for Research and Education. Landers said the analysis, conducted for the investors by independent assessor Thomas Mackall, a senior counsel to the United States Council for International Business and regional vice president of the International Organization of Employers, found no indication that Starbucks consulted its workers for input when conducting the workers’ rights assessment.

“If an assessment of how well a company is respecting its workers’ rights does not actually include input from workers, it is not assessing much,” Lander said in a release. “The Starbucks board needs to accept responsibility for the companies’ shortcomings and set a clear tone from the top that it will hold management accountable to its commitments to its workers’ freedom of association.”

Lander said the lack of worker input was among four main concerns the investor group has regarding the company’s assessment. The other concerns were that the assessment provided a limited review of Starbucks’ adherence to the international standards; that the letter to shareholders that accompanied the assessment indicates the board might try to weaken its commitment to international labor standards; and that the assessment does not absolve the company of any wrongdoing.

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The investor group’s statement also said that while Starbucks has committed to several international labor standards, the company’s assessment only measured its compliance with U.S. law.

“It is our firm belief that the company must have a commitment to uphold international standards and the required policies and practices to implement them,” the group said in a review of the Starbucks assessment. “We believe that the company’s financial prosperity rests in large measure on the well-being of its workers and the company’s respect for workers’ fundamental rights, including when they choose to organize a union.”

The group’s statement said it was “troubling” that Starbucks’ assessor “did not appropriately obtain worker input or analyze what may matter most, the actual experience of workers interested in joining a union who were affected by Starbucks’ approach to workers’ fundamental rights.” It added that Starbucks’ assessment did not examine the company’s strategy in its approach to union activity or its effect on Starbucks’ workers.

“We hope that the company enters 2024 with a genuine intention to turn the page and fully embrace its GHRS commitments,” the statement said. “We are eager to see a shift in Starbucks’ approach to its management and board oversight of fundamental workers’ rights.”

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Tags: Brad Lander, New York City Comptroller, New York City Employees' Retirement System (NYCERS), PIRC, Shareholder Association for Research and Education, Starbucks, Thomas Mackall, Trillium Asset Management, workers’ rights assessment

After the Lone Star State blacklisted the asset manager over a fossil fuels issue, the firm’s ESG-minded CEO offers big bucks to improve the state's power grid.

Amid the ongoing culture wars, BlackRock Inc. appears to have dialed back some red-state enmity over energy and is even doing new business in the epicenter of anti-ESG sentiment, Texas. Even if the Texas initiative is only a fraction of BlackRock’s business profile, that marks a contrast from its climate-reverencing image.

BlackRock has been a years-long backer of environmental, social and governance precepts, sponsoring several clean energy funds and in 2021 whittling down its exposure to oil and gas stocks nationwide by around 15% to $552 billion, per Standard & Poor’s.

So in 2022, Texas Comptroller Glenn Hegar barred state entities, such as pension funds, from investing with BlackRock and others Hegar accused of “boycotting” the oil and gas sector. Other states, such as Missouri, followed suit.

Since the Texas blacklisting, though, BlackRock CEO Larry Fink has made overtures to the state’s officialdom. He and the firm have repeatedly made the point that BlackRock continues to invest in fossil fuels and vowed even more for the sector in Texas.

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He met twice with Texas Lieutenant Governor Dan Patrick, who last week applauded BlackRock’s plan to help raise $10 billion in private investment to bolster the state’s troubled power grid. The power-grid fund, approved by a voter referendum last fall, would aid public utilities’ construction of new power plants, including natural gas plants—i.e., those that are fossil fuel-driven.

“I told the lieutenant governor about some of the work we’d done,” Fink told an energy investment conference in Houston, pointing to BlackRock’s fundraising efforts to re-build Maui’s power grid following 2023’s devastating wildfires in Hawaii.

Patrick replied in friendly fashion, telling the conference, “BlackRock has been a big investor in the fossil fuel industry, but it wasn’t the perception,” Patrick said. “I don’t know what I expected from the king of Wall Street, but we kind of hit it off immediately.”

Fink said Blackrock already has $125 billion invested in Texas-based energy companies, and it has been investing in Texas, generally, since his firm’s 1988 founding. Fink also has noted that he has ceased using the term “ESG,” as it has become politically “weaponized.”

It’s unclear how BlackRock’s total energy holdings have change over the past three years, but the company’s many exchange-traded funds offer all types of allocations. BlackRock, known for its ETFs, does have an energy offering, the iShares U.S. Energy ETF, one of its smallest (assets: $1.2 billion), almost entirely composed of fossil fuel companies and their service providers. Its largest fund, the iShares Core S&P 500, (assets $418.4 billion) has a traditional energy allocation matching that of the index, at 3.7%.