Trillium-led investor group urges Starbucks to adopt neutral policy on union efforts.

• Trillium Asset Management and other investors are calling on Starbucks to establish a worldwide policy of neutrality regarding its employees' efforts to unionize.
• The workers who voted to join the union want Starbucks to negotiate fair and timely collective bargains with them.
• The group, with over $3.4 trillion in assets under management or advisement, states that it owns at least $1.2 billion in Starbucks stock.

Trillium Asset Management and other investors are calling on Starbucks to adopt a global policy of neutrality for all current and future attempts of its workers to organize. They also want Starbucks to reach "fair and timely" collective bargains with workers who vote to join the union.

A coalition of over 75 investors has written to Starbucks CEO Kevin Johnson and Chair Mellody Hobson, warning of reputational risk for the coffee giant due to the growing public support for unions.

The group, comprising Trillium, SOC Investment Group, Parnassus Investments, and New York City Comptroller Brad Lander, has sent a letter to Starbucks CEO ahead of the annual shareholder meeting on Wednesday. The letter, which is the second such letter sent by the group, states that it holds at least $1.2 billion in Starbucks stock and has more than $3.4 trillion in assets under management or advisement.

The letter raises concerns that Starbucks' response to union organizing activities deviates from international norms and standards, as well as its own commitments to them. Specifically, the letter highlights Starbucks' actions at stores that have organized after the Buffalo election, including alleged retaliatory termination of employees and continued captive audience meetings.

Starbucks did not immediately respond to request for comment.

Over 130 Starbucks stores in 26 states have requested unionization through the National Labor Relations Board, with seven stores holding elections and six of them voting in favor of the union. Five of these locations are in Buffalo, New York, where the unionization movement started last summer, and the other is in Mesa, Arizona.

The NLRB has rejected Starbucks' argument that marketwide votes are more appropriate than single-store counts for all workers to participate.

Starbucks Workers United has accused the company of retaliation and union-busting tactics, which the company has denied. The organizers claimed that Starbucks has cut workers' hours as retaliation and financial punishment for organizing or supporting the union, which the company also denied.

Jonas Kron, chief advocacy officer at Trillium, expressed concern that the company's efforts to improve its ESG profile and reputation may be putting it at risk, as he stated in an interview with CNBC.

Lander, the New York City comptroller, stated that the company must now decide whether to maintain a path of respect for their workers by allowing free and fair elections through adopting a policy of neutrality, or risk losing the goodwill they have built over the years if they do not take this action.

Starbucks' best interest for productivity and growth is to respect the union, according to the coalition's argument.

When workers' rights are protected, their interests are represented, and their needs are effectively communicated, both companies and workers benefit. The benefits may include lower turnover, more resilient and risk-tolerant operations, more effective feedback loops, higher employee satisfaction and productivity, and ultimately, higher quality and more innovative products and services, as stated in the letter by the investors.

Dieter Waizenegger, executive director of SOC Investment Group, stated on CNBC that customers have a choice, and SOC Investment Group will be the one. He emphasized the importance of maintaining a positive reputation as a people-oriented company and being a good partner to its partners.

Over 4% of Starbucks shares were closed Monday, resulting in a 32% decline year to date.