ESGFebruary 13, 2024

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

According to New York City Comptroller Brad Lander, a lack of worker input was among four main concerns with the evaluation.

Reported by Michael Katz

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.

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.”