ESG Round-Up: 70 institutions urge Starbucks to rethink approach to unions

The latest developments in sustainable finance: EU Council agrees Carbon Border Adjustment Mechanism details; Temasek Trust collaborates on ‘SDG Investor Map’; BT Pension Scheme signs diversity charter.

More than 70 institutions, including BMO Global Asset Management and New York City’s Comptroller, have signed a letter urging Starbucks to rethink the way it deals with employee attempts to unionise. The $3.4 trillion investor group highlighted the coffee titan’s “comprehensive Global Human Rights Statement which espouses commitments to a wide variety of agreements”, but said its response to unionisation “ suggests a departure from international norms and standards as well as from its commitments to them”. Starbucks has denied recent accusations that it sacked staff in the US because of their attempts to encourage unionisation.

The EU Council reached an agreement yesterday on the details of a Carbon Border Adjustment Mechanism. The regulation will make it more expensive to import carbon-intensive products from countries with looser environmental rules, in a bid to level the playing field between EU companies subject to carbon prices and other jurisdictions without such costs. Cement, aluminium, fertiliser, electricity, iron and steel will be covered by the mechanism, which will run alongside the existing Emissions Trading System and will be run through a central EU registry. “It will gradually replace the existing EU mechanisms to address the risk of carbon leakage, in particular the free allowances of EU ETS allowances,” the Council said in a statement, adding that it expected imports of less than €150 – around a third of current consignments – to be excluded. No deal was reached on how to deal with exports as part of the agreement.

Singaporean state investor Temasek Trust has collaborated with the Government of Indonesia to launch an ‘SDG Investor Map’ outlining how the private sector can support the Sustainable Development Goals. The map, developed with UNDP Indonesia and SDG Impact, identifies 18 investment themes and business models aligned with Indonesia’s national sustainability policies. It focuses on education, healthcare, agriculture, renewables, financials and infrastructure. UNDP will work with Temasek Trust to engage investors with the map.

BT Pension Scheme Management (BTPSM), the UK’s largest corporate pension fund, has committed to hold its investment managers to account on diversity and inclusion. The fund has become the 20th member of the Asset Owner Diversity Charter, saying that “diversity and inclusion will form part of BTPSM’s manager selection and the scheme will monitor its managers’ efforts on an ongoing basis to encourage positive broader industry change”.

Just 25 percent of asset owners in the US and Europe have integrated ESG scoring into their investment manager selection processes and only 29 percent have requested existing managers present their ESG strategies to them, according to London-based ESG data firm GaiaLens. Its survey, which assessed responses from 200 of the largest asset owners split evenly between the US and Western Europe, also revealed that senior decision makers and CIOs at a third of US-based asset owners believe ESG adoption is negatively impacting returns today.