Unions leveraging ESG to influence employees and deplete U.S. retirement funds

ESG has impacted Starbucks workers, leading to significant changes in the company’s policies.

Prior to the annual meeting, labor unions nominated three new pro-union board members who were former Democratic officials. These nominations were successful in pressuring Starbucks to accept union demands.

As a result, Starbucks agreed to a collective-bargaining framework at unionized stores, prompting the unions to withdraw their board nominees.

This strategic move by the unions highlights the influence of labor unions under the umbrella of ESG.

While environmental and governance aspects of ESG investing have received attention, labor unions are leveraging the social and governance components to advance their agenda.

Union-backed initiatives aim to increase union membership, sometimes against the will of workers, which poses a threat to workers’ rights and investors’ financial interests.

The Biden administration’s support for unions has facilitated this trend, allowing investment managers to prioritize ESG over financial growth.

Union pension funds, along with other investment funds, now have the ability to vote for union priorities using investors’ money, pushing for measures that may not align with the interests of workers and shareholders.

By focusing on ESG principles, labor unions seek to gain more control over workers and influence companies to comply with union demands.

The implications of this strategy are concerning for both workers and investors, as it could potentially jeopardize retirement savings and shareholder value.

The priority for the next administration should be protecting the interests of workers and investors, rather than prioritizing special-interest goals.

F. Vincent Vernuccio is president of the Institute for the American Worker. Sam Adolphsen is policy director for the Foundation for Government Accountability.