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IMPORTANT INFORMATION
All data as at 31 December 2024, unless specified otherwise. This document is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. We strongly recommend you seek independent professional advice prior to investing. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. Any forward-looking statements are based on CCLA’s current opinions, expectations and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated. All names, logos and brands shown in this document are the property of their respective owners and do not imply endorsement. These have been used for the purposes of this document only. CCLA Investment Management Limited (a company registered in England and Wales with company number 2183088), whose registered address is One Angel Lane, London EC4R 3AB, is authorised and regulated by the Financial Conduct Authority.
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We monitor our equity holdings for involvement in significant sustainability-related controversies on an ongoing basis. Several investee companies were involved in severe human or labour rights controversies during 2024. Our approach to controversies recognises that things can go wrong, no matter how good a business is, and that rather than walk away, it is better to remain invested and push the company to improve.
KEY
No response
Discussions ongoing
Positive change
Met engagement target
Freedom of association and collective bargaining
Freedom of association and collective bargaining
Amazon
Consumer staples
CCLA has co-filed a shareholder proposal two years running at Amazon on the topic of freedom of association and collective bargaining, calling for the company to publish an independent report into the alignment of its practices with its own policies and human rights standards. See the voting section for details of this engagement.
Starbucks*
Consumer discretionary
In 2022–2023 we were part of a collaborative engagement with Starbucks regarding its practices on freedom of association and collective bargaining. A 2023 resolution on the issue passed and Starbucks published an independent report into its labour practices, which identified issues that needed to be addressed. In February 2024, Starbucks signed a recognition agreement with Workers United.
Human rights and labour standards
Human rights and labour standards
Coca-Cola Co and PepsiCo are significant buyers of sugar from Maharashtra in India. Following a series of New York Times articles in mid-2024 highlighting exploitative working conditions and bonded labour in the Indian sugar supply chain, we began engaging with these companies to push them to provide remedy and improve labour standards in this area.
Coca-Cola Co
Consumer staples
CCLA is lead investor for a collaborative engagement initiative on the topic of human rights and labour standards at Coca-Cola, supported by investors in the Interfaith Center on Corporate Responsibility’s Equitable Global Supply Chains group and members of the Council of Institutional Investors. Since the problem in Maharashtra came to light, we have been asking Coca-Cola to demonstrate leadership in tackling this deep-rooted and complex human rights issue. Discussions continued in 2024 and in December Coca-Cola has engaged constructively and launched several initiatives in India with a view to creating a more responsible sugar cane industry. Coca-Cola published a statement outlining the steps it has taken to address the issue.
Costco Wholesale*
Consumer staples
In June 2024, we wrote to Costco to raise concerns about allegations (first raised by the Outlaw Ocean Project) of forced labour, including the use of Uyghur forced labour in its seafood supply chain. Shortly after writing to the company, we sold our holdings in Costco and the engagement ceased.
McDonald’s
Consumer discretionary
In September 2024, BBC Panorama broadcast ‘Slavery on the high street’, a documentary uncovering how an organised crime group had trafficked vulnerable Czech nationals into the UK and forced them to work in McDonald’s restaurants in Cambridgeshire, while controlling their movement and taking their pay. Following the broadcast, CCLA wrote to McDonald’s, which responded to confirm that it has a human rights policy covering all franchisees and that it co-operated with the enforcement agencies. The response also stated that important lessons had been learned. Discussions continue.
Separately and since 2023, McDonald’s has been involved in reported allegations of widespread sexual harassment in UK retail stores. In July 2023, CCLA wrote to McDonald’s about the issue and its response, which we deemed to be inadequate. McDonald’s acknowledged the problem and issued an apology. It has since signed a legally binding agreement with the Equality and Human Rights Commission. In August 2024, McDonald’s additionally published a civil rights audit covering how the company is working to promote a diverse, equitable and inclusive workplace.
PepsiCo*
Consumer staples
Following the reports, we began engaging with PepsiCo to push them to provide remedy and improve labour standards in this area. Prior to the sale of our holding in PepsiCo, we were part of a collaborative engagement working group on the topic of human rights and labour standards with the company. A resolution on the issue has been filed by Mercy Investment Services for the 2025 season.
Semiconductors in Russian weaponry
Semiconductors in Russian weaponry
News emerged in 2023 that electronic chips manufactured by Western technology firms had been found in Russian weaponry linked to war crimes in Ukraine.
NVIDIA
Information technology
CCLA is engaging with NVIDIA in relation to its downstream human rights due diligence processes, following allegations that its semiconductor chips had been found in Russian weaponry. The majority of these chips are ‘dual use’ and ‘off the shelf’, meaning they can be designed for consumer use but reprogrammed to guide weaponry. CCLA and a group of investors met with NVIDIA several times during 2024. The company is now working with a human rights consultancy called Article One to undertake a human rights impact assessment that includes upstream and downstream risk.
NXP Semiconductors
Information technology
In September 2023, CCLA co-signed a letter sent on behalf of a group of investors by Cardano to raise concerns about allegations that semiconductor chips manufactured by Western technology firms had been found in Russian weaponry linked to war crimes in Ukraine. The company acknowledged the problem but argued that it is difficult to track dual-use technology. Discussions continue.
Severance pay
Severance pay
Nike*
Consumer staples
In late 2023, we wrote to Nike on behalf of 70 other investors to raise concerns about the lack of remedy for workers made redundant without severance pay at two supplier factories during the Covid-19 pandemic. Despite unions’ concerted efforts over three years, Nike is yet to support these workers. In 2024, we co-filed a resolution at the company requesting that it commission an independent study on the degree to which ‘binding agreements’ and ‘worker-driven responsibility measures’ might strengthen its supply chain labour rights programme in high-risk contexts in the future. See the next page for further details.
*Not held in CCLA portfolio(s) as at 31 December 2024.