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30. 04. 2024

4 min read

ESG Challenges: A Closer Look at Amazon, Starbucks, and Disney in Q1 2024

Our 2024 ESG series continues with a look at how companies manage their ESG practices. Major S&P 500 companies such as Amazon, Starbucks, and Disney have been brought into the spotlight as they face key ESG-related challenges. 

These 3 companies have encountered the most significant adverse ESG-related events, or ‘contra’ events, in Q1 of 2024, highlighting the delicate balance between delivering shareholder value and ethical governance. Here is a recap of their significant contra-ESG events, marked by a detailed timeline:

Amazon’s Challenges: Surveillance, Migrant Worker Compensation, and Illegal Sales Probes

  • On January 23, 2024, Amazon was fined €32m by France’s CNIL for “excessive” worker surveillance in its warehouses. The company’s practices, including monitoring breaks and scanning speeds, raised significant privacy and autonomy concerns.
  • By February 23, 2024, Amazon compensated over 700 migrant workers in Saudi Arabia with $1.9 million after investigations revealed they were subjected to high recruitment fees and misleading employment terms.
  • On March 22, 2024, the Federal Communications Commission (FCC) launched an investigation into Amazon for allegedly selling illegal radio jammers by third-party sellers on its platform. These devices, capable of disrupting emergency communications, prompted a federal probe following an NBC News report.

Starbucks’ Reputational Hits: Deceptive Practices, Ethical Sourcing, and Discrimination Lawsuits

  • Starbucks started the year on a sour note with accusations on January 3, 2024, for using deceptive practices through its app. This prompted a consumer group to file a complaint about the alleged manipulation of user spending habits.
  • On January 10, 2024, the National Consumers League sued Starbucks for misleading claims about “100% ethically sourced” coffee and tea, pointing to child labour and human rights abuses at supplier farms.
  • On March 21, 2024, Starbucks was hit with a $5 million class-action lawsuit in California over extra charges for non-dairy milk options, challenging the company’s practices under the Americans with Disabilities Act and California civil rights law.

Disney’s Legal Troubles: Sexual Harassment, Retaliatory Lawsuits, and Worker Compensation

  • Disney encountered a serious allegation of sexual harassment and assault by a former executive, leading to a lawsuit filed on January 5, 2024, by a Disney employee seeking justice for the company’s alleged inaction and retaliation.
  • On February 1, 2024, Disney appealed the dismissal of its lawsuit against Governor Ron DeSantis, which centered on controlling the Walt Disney World’s district and claimed retaliation for Disney’s opposition to Florida’s controversial legislation.
  • March 7, 2024,  marked another lawsuit against Disney, alleging the underpayment of maintenance workers at its Disneyland Hotel in California. This lawsuit brings to light issues of incorrect overtime pay, lack of breaks, and demands for at least $1 million in back pay and benefits.

Conclusion

The first quarter of 2024 brought significant ESG challenges for Amazon, Starbucks, and Disney. Each company faced unique issues that highlighted the need for improved ethical governance and operational integrity:x

  • Amazon was scrutinized for excessive worker surveillance and other legal compliance issues.
  • Starbucks dealt with accusations related to deceptive marketing practices and ethical sourcing.
  • Disney faced legal troubles over workplace misconduct and wage disputes.

These events from early 2024 demonstrate that even well-established companies can struggle with the delicate balance of advancing business objectives while ensuring responsible ESG practices. This period has been pivotal for Amazon, Starbucks, and Disney, serving as a reminder of the ongoing need for corporations to reevaluate and strengthen their approach to ESG challenges.

In support of these challenges, Semantic Visions delivers an ESG-enriched data analytics solution that identifies areas of improvement and provides clients with the opportunity to address the root causes of ESG non-compliance. We utilize AI and ML technology to analyze data extracted from global news sources, correlating it against over 120 ESG event types and enriching it with advanced large language models for deeper insights. Our product offers:

  • Enriched Screening Dataset: Coverage of over 120 ESG risk event types related to thousands of tickerized companies over a five-year period.
  • Near Real-Time Data Access: Enriched data updates are provided hourly and are accessible through advanced data storage solutions.
  • ESG Score Dashboard: Delivers insights on significant trends, analyzes ESG trends, and benchmarks companies, industries, and countries.
  • Custom Reporting: Tailored reports designed to meet specific client requirements.

This solution enables effective real-time and historical data analysis in 12 languages, helping companies understand and meet ESG requirements. For more information, consider requesting a demo here.

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