SHARE and an international coalition of more than 20 investors representing over 3.5 trillion USD in assets under management is calling for more transparency from Amazon on how the company is living up to its commitment to respect workers’ rights and in particular freedom of association and collective bargaining.
Out of concern for the long-term risks that Amazon’s approach to labour rights represent, the group has filed a shareholder proposal to be voted on at Amazon’s AGM on May 22. The Proposal urges Amazon’s Board of Directors to assess how the company’s actions align with its human rights policy, which states that it “respect(s) freedom of association and our employees’ right to join, form, or not to join a labor union.” It also explicitly references the International Labour Organization (ILO) Declaration and core conventions, indicating that the company is well aware of what those obligations entail.
Despite that commitment, media reports on ongoing unionization efforts at the Company (including in the U.S., U.K., Canada and Europe) allege intimidation, retaliation and surveillance. In fact, since the publication of this policy, I haven’t seen evidence of how this commitment translates into tangible outcomes on the ground.
These allegations should make any shareholders nervous — particularly institutional investors with a long-term horizon in mind. First and foremost, labour rights are human rights. Secondly, it is a well-established investor expectation that companies must respect human rights wherever they operate, regardless of what local laws have to say. This is also what says the UN Guiding Principles on Business and Human Rights (UNGPs) — that is also referenced by Amazon in its Human Rights Policy. Beyond the ethical rationale of respecting human rights, institutional investors are wary of the underlying risks that companies’ failure to uphold decent work practices may represent to their investment portfolios. It is also worth noting that promoting decent work practices and especially freedom of association and collective bargaining rights leads to positive outcomesfor companies including lower turnover, higher productivity, better health and safety performance and more equity in the workplace amongst many other things.
If executed correctly, a third-party assessment should get to the bottom of workers’ allegations and clarify where Amazon has crossed the line between freedom of expression and freedom of association. It would also explain how the reported millions of dollars Amazon has spent in anti-union consultant firms are in the best interest of shareholders. All of which should ultimately serve the purpose of guiding the management approach and conduct related to freedom of association and collective bargaining and provide a clear framework of oversight for the board of directors.
In previous years, the proposal has received substantial support from investors which reflects investors’ concerns over poor human capital management performance and labour rights. This year’s proposal is brought by one of the largest coalitions to unite behind a labour rights proposal, and is backed by the two leading proxy advisory firms ISS and Glass Lewis. Major US public funds including the CalPERS, CalSTRS, Office of the New York City Comptroller, New York State Common Retirement Fund and large asset managers like Norges Bank Investment Management (NBIM) and Legal and General Investment Management (LGIM)have also pre-declared their intention to vote for the proposal at Wednesday’s annual general meeting (AGM).
In recent years, global investors have increasingly voted for better labour relations in an effort to mitigate related risks in their portfolios. Several US public companies have answered this call, with Starbucks and Apple completing their own assessments in recent months. Microsoft has even gone a step further, signing a neutrality agreement offering greater protection to workers. Amazon’s lack of action is concerning and indicative of a growing disconnect between the board and its shareholders.
Perhaps it is worth reminding Amazon’s board that a core part of its fiduciary duty includes to represent and protect shareholders interests — and that inevitably starts with listening to what its shareholders have to say.
SHARE, the Shareholder Association for Research and Education, is an award-winning Canadian non-profit organization that mobilizes investor capital to create a more sustainable, inclusive and productive economy. Learn more at https://share.ca.
