It’s no secret that the corporate activist lobby has a complicated relationship with adding value to the corporations it targets. From battles over ESG retirement options to misleading racial pay gap reports, the push to politicize corporate practice and governance is only becoming stronger.
Now, ESG activists are setting their sights on a new enemy, the demise of which will surely result in a more climate-conscious, racially reconciled America.
Milk. No, that’s not a joke.
PETA is drawing up the troops against Starbucks, in a war it seems intent on fighting by supergluing its activists’ hands to cafe counters. In addition to such Selma-esque practices, however, the animal rights nonprofit is also taking the fight to Starbucks through corporate pathways. In a shareholder proposal submitted ahead of the coffee empire’s annual meeting Wednesday, PETA laid out the case against Starbucks in clear terms—perhaps too clear. “Consumers have soured on cow’s milk,” PETA wrote in the proposal. “Personal health and environmental concerns are… driving people away from dairy.”
The corporate practice in question? Starbucks upcharges for vegan milk. According to a PETA petition that amassed more than 150,000 signatures, “Customers shouldn’t have to pay more for choosing a healthy, animal- and environmentally friendly option.” But it’s not just health and animal rights that PETA brings to the table. The real costs of Starbucks’ dairy alternatives are… racial inequality and climate change. Or so they say.
“Most people of color suffer from some form of lactose intolerance,” the proposal continues. “Parents have already begun talking with their children about issues like racism and the climate catastrophe… we should also anticipate a growing backlash against companies that penalize individuals for who they are or for standing up for the planet.”
The one minor piece of information that doesn’t make it into PETA’s analysis? Cow’s milk is significantly cheaper than plant-based alternatives. As noted by notoriously not-conservative outlet Mother Jones, “Even though plant-based milks are generally much less resource-intensive, they’re often more expensive.” What brand do they use as an example? Starbucks. Plant-based alternatives can’t currently compete with the heavily efficient dairy production and supply chains—as our firm Bowyer Research noted in their opposition to PETA’s proposal—it’s a competition between a centuries-old industry titan and a relative newcomer that less than a quarter of Americans use at all. Thankfully, Starbucks shareholders recognized this and voted overwhelmingly against the proposal, including clients of our proxy guidelines, but the fight’s hardly over with the failure of one asinine proposal. Why does the ESG lobby feel the compulsion to ignore basic reality in its quest to reach corporate utopia?
The answer’s every bit as philosophical as it is economic. The ESG lobby knows their demands will hurt businesses—they just don’t care. Under the rules of corporate activism, Starbucks’ responsibility to its shareholders comes second to its obligation to harmful demands cloaked in cultural buzzwords. ESG activists are asking Starbucks to absorb the cost of more expensive products for no other reason than its own conception of corporate responsibility: boards answer to their ESG masters, but not to their own shareholders. That’s why Bowyer Research is waging war on this anti-business agenda—the ESG lobby’s conception of the market is simply wrong, and it’s time to stand up and say no more.
The activist lobby would like nothing more than to put an end to the idea of boards working for shareholders. As PETA demonstrates, they want that loyalty for themselves, while offering nothing to shareholders in return—the kind of dysfunctional marriage between ignorance and arrogance that leaves a bad taste in any serious investor’s mouth.
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March 14, 2024 at 08:48AM
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