How retailers’ attitudes toward unionization clash with their ESG policies

A decade ago, more than 1,100 people died when Rana Plaza, an 8-story factory in Bangledesh, collapsed. Workers, noticing cracks in the structure for weeks, begged management not to be sent inside the building, but to no avail. Once it began to fail, it took less than 90 seconds for the building to crumble.

The incident, which union leaders called a “mass industrial homicide,” illuminated issues of fair labor practices and has been the impetus of a number of changes in the retail space. Global organizations took action to create safer working standards, and workplace resolutions now often show up in retailers’ environmental, social governance reports, which are becoming important to investors and other stakeholders.

More consumers and investors are beginning to see some retailers’ policies in the US as at odds with much of their ESG-based rhetoric around issues like collective bargaining, especially when their workers try to form a union, experts say. As the labor movement revives in the US, this contradiction is likely to become more glaring, and more companies will struggle to rationalize it, according to Alison Taylor, executive director of the Ethical Systems program at New York University’s Stern School of Business.

Amazon is just one example of a company whose stated human rights principles, including support of worker collective action, clash with its own treatment of labor organizers and its delineation of unions, in investor materials, as a potential business risk. At its most recent shareholder meeting, the e-commerce giant entertained a number of proposals favorable to its hourly workers, but only after the Securities & Exchange Commission ruled that they couldn’t be left off their proxy statement.

“As we have consistently stated, our employees have the choice of whether or not to join a union. They always have,” Amazon Spokesperson Kelly Nantel said in an emailed statement. “As a company, we don’t think unions are the best answer for our employees. Our focus remains on working directly with our team to continue making Amazon a great place to work.”

Nantel didn’t respond to questions immediately about why the company explicitly states support for international labor codes that include collective bargaining if it also sees it as an impediment to the company-worker relationship or to making a workplace great.

“So much of ESG is about win-win thinking, but unions are an area where companies still think the only possible outcome is win-lose,” NYU’s Taylor said by email. “THis knee-jerk response is disappointing, as the right to speak up, protest and organize is a fundamental civil right, and many of these companies make human rights commitments too.”

David Schilling, senior adviser at the Interfaith Center on Corporate Responsibility, sees a lot of contradictions between what many retailers say in their ESG reports and how they treat their own workers.

“Freedom of association and collective bargaining — these are basic human rights,” he said by phone. “The good news is that there’s a greater recognition of the responsibilities of companies and investors to really engage in a full range of human rights.”

Pro-worker rights, but anti-union?

Several major chains in the US in recent years have increased their starting pay, improved benefits like health care and family leave, and provided additional opportunities for advancement or education. Economists usually view such policy changes as a consequence of market forces, like low unemployment, though retailers tend to paint them as worker-friendly.

When Target announced in February that it would set a new starting wage range of $15 to $24 at its stores, supply chain facilities and corporate offices, for example, Chief Human Resources Officer Melissa Kremer said the company wants “all team members to be better off for working at Target.”


“So much of ESG is about win-win thinking, but unions are an area where companies still think the only possible outcome is win-lose.”

Alison Taylor

Executive Director, Ethical Systems, NYU Stern School of Business.


“Our team is at the heart of our strategy and success, and their energy and resilience keep us at the forefront of meeting the changing needs of our guests year after year,” Kremer said in a statement. “We continually listen to our team members to understand what’s most important to them, then use the feedback to make investments that meet their needs across different career and life stages.”

Might a retailer so dedicated to listening to its workers support their collective action?

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