On March 5, 2024, just days before Starbucks’ Annual General Meeting, a landmark event took place when Starbucks and Workers United (SBWU) announced that it was beginning discussions on a “foundational framework” to reach labour agreements with unionized workers and resolve ongoing litigation.
This announcement captured Wall Street’s attention given the far-reaching repercussions for retail labour rights across North America – and it is imperative to note that this agreement was the result of ongoing organizing not only from Starbucks workers but also from investors concerned about how the company’s actions around labour relations could impact long-term value at the company.
In 2023, 52% of Starbucks shareholders supported a proposal for an independent third-party workers’ rights assessment – a strong mandate that spoke to the level of investor concern around Starbucks’ lack of alignment with its own stated labour rights values.
For the 2024 ballot, the company’s investors were asked to consider three director candidates with extensive labour relations experience. These candidates were nominated by the Strategic Organizing Center (SOC) – the Brew a Better Starbucks campaign – the momentum of which contributed to Starbucks’ willingness to work with Workers United on the framework. In response to the agreement, the SOC withdrew its nominated candidates, allowing the company to focus on its renewed commitment to workers and shareholders.
“Investor concern with the board and management response to ongoing unionization efforts at Starbucks has been loud and clear, but last week’s joint announcement from the company and Workers United of a settlement framework was welcome news that we hope means a fundamental change in direction.”
– New York City Comptroller Brad Lander via Reuters
Workers’ rights in the investor stewardship spotlight
In 2023, a record number of shareholder resolutions were filed, with a substantial portion focusing on labour rights. This trend underscores the growing recognition among investors that upholding labour rights, including freedom of association and collective bargaining, is not only a requirement of international standards but also critical to the long-term performance and profitability of portfolio companies.
Last November, this growing awareness gave rise to the Labour Rights Investor Network (LRIN). Established as a global platform for investor education and advocacy, the LRIN has clear goals to promote a culture of respect for labour rights in investment portfolios and companies across all sectors. This includes equipping investors with the necessary information and tools to integrate labour rights into their stewardship practices while fostering an environment that encourages open dialogue between investors and trade unions.
Eight months on, the network has doubled the value of assets under management by its members to a total of $3.6 trillion and made significant progress toward achieving its goals. Members have had the unique opportunity to learn from workers, unions and experts about a diversity of topics including international standards that encompass their responsibility to uphold respect for workers’ rights, to addressing the global growth of anti-union practices.
Strengthening investor engagement
Although its primary focus is on education and knowledge building, the network has facilitated a space for investor-led working groups. These groups target common investment stewardship challenges, such as proactively managing labour-related risks and promoting worker-backed binding agreements within investee companies. They set clear deliverables that are then shared with the broader network, driving collective progress.
Looking ahead, the LRIN will introduce additional tools to strengthen investor engagement, including the development of country risk profiles focusing on trade union rights, drawing on data from the ITUC Global Rights Index and insights from global unions. In addition, the LRIN will produce sector-specific publications and events to explore current labour practices and their implications for investors.
As we witness the ongoing collaboration between investors, workers and their unions that has sparked change at companies once reluctant to respect their workers’ labour rights, the LRIN is a crucial space for advancing labour rights stewardship around the world. The ripple effect of this new space can catalyze an effective change in the effectiveness of investor efforts to foster the shared prosperity that workers, communities, companies and investors enjoy when labour rights are upheld in the investment chain.
