Staying true to ESG
Starbucks Faces Controversy: CEO Work-Life Balance and Sustainability Concerns
Starbucks Coffee Company has made headlines twice this month with controversy around leadership and sustainability practices. The company's former CEO, Laxman Narasimhan, and his approach to work-life balance, as well as the recent appointment of Brian Niccol as the new CEO, have sparked debates on corporate consistency and transparency.
Former CEO's Work-Life Balance Stance:
In an interview for Fortune magazine, former CEO Laxman Narasimhan spoke about his approach to work-life balance. He reported clocking off at 6pm unless in exceptional circumstances- saying that most things cropping up after 6pm can ‘just wait for another day’. There has been controversy around whether this was an accurate reflection of the work/life balance of CEO of an S&P 500 company.
Leadership Transition and Sustainability Scrutiny:
A few weeks later it was announced he would be replaced by Brian Niccol, formerly of Chipotle and Taco Bell. Starbucks came under scrutiny when it was revealed Niccol would be given a commercial private jet to commute from California to Seattle - in apparent conflict with the company’s sustainability stance. It was also unclear whether he would have to abide by Starbucks’s three days per week on site hybrid working policy.
The Importance of Organisational Consistency:
While these examples may reflect PR mishandlings compounding the underlying issues, they highlight an important point. Consistency matters in organisations. How an organisation presents its working conditions and people policies impacts external perceptions as well as internal attitudes. Arguably, inconsistency, including greenwashing or wellbeing washing looks worse and is worse than suboptimal policies.
Navigating ESG and Organisational Realities:
In most workplaces, it is not realistic for ESG to be front and centre of organisational strategy at all times. What is realistic varies according to factors including organisational size, nature of the work and market forces. Here are some non ESG realities:
Productivity culture does exist in many companies and depends on people working over hours and being accessible, particularly at senior levels
Some companies doing innovative and important work have depended on CEOs flying between sites- one high profile example is Elon Musk leading SpaceX and Tesla at the same time
In some roles, remote work is not feasible and different working conditions may apply to different roles within the same organisation
Honest Communication is Essential:
It is not necessarily helpful to any internal or external audience to present an organisational image that is not true to form. What is paramount is communicating accurate working conditions, opportunities and compensation to the current and prospective workforce and other stakeholders. For those that have choice in how and where they work (and not everybody does), working conditions are full of tradeoffs. We need to get better at articulating this as a society. Some examples are:
Choosing to work as a contractor with lower job security for more flexibility
Taking a lower paid role which comes with training opportunities and progression
Working outside of contracted hours for a well compensated role
Wellbeing washing and greenwashing distort the relationship between work, health, societal impact and productivity. When it comes to work and health and other aspects of ESG more broadly, incentives generally align. Organisations leveraging this well will have a competitive edge.
In the context of high levels of economic inactivity in the UK and elsewhere particularly amongst younger workers, it is more important than ever that we communicate honestly about work. No organisation is perfect, no job is perfect, no working conditions are perfect. Maybe progress would look like more organisations and individuals taking ownership of where they are at and why. People who have a choice in how and where they work should be empowered to make trade offs that work best for them.
